This writ petition calls in question the validity of the letter dated 30-12-1980 (Annexure C) of respondent No. 1 and the letter dated 7-2-1981 (Annexure A), whereby, the Deputy Commissioner, Lahore, advised the petitioner to remit the amount of Rs 1,85000 in the Treasury under Head "Revenue Deposit Provincial" within 15 days failing which the same was threatened to be recovered as arrears of land revenue, on the ground that as a result of lack of care in identification of customers and verification of the title of the payees, the amount was fraudulently withdrawn by a fictitious person.
2. The facts relevant for the disposal of the writ petition may be briefly stated. It came to the notice of the Punjab Government in 1973, that fraudulent drawal of money from Government accounts were facilitated because the commercial banks did not exercise due care in opening account and identifying the payees. Accordingly, all the Head Offices of the commercial banks were requested vide Circular dated 26-1-1973 the Finance Department of the Government of Punjab (Annexure B) to issue instructions to all -their branches to be very careful in identification of customers at the time of opening of accounts and in verification of the title of the payees while collecting payments on bills/vouchers etc. From Government Treasuries. They were further warned that the Government of the Punjab will be constrained to hold the Bank concerned responsible for making good the loss in case of a fraudulent payment taking place as a result of lack of care in this regard. It has,. Been frankly conceded before me by Mian Bashir Ahmed, learned counsel for the petitioner, as well as by Mr. Ziaullah Qureshi, the Senior Vice-President/Zonal Chief of the petitioner-Bank that the instructions (Annexure B) were duly acted upon by the petitioner-Bank.
3. The petitioner-Bank has also issued general instructions for opening of accounts in its Manual of Deposit Accounts. The relevant instructions read thus :- "32. Introduction of Account.-Introduction shall be obtained from a respectable party known to the Bank while accepting the account of a new account holder on the strength of its introduction, the Branch Manager shall satisfy himself that -
(a) the signature of the introducer is genuine ;
(b) the introducer is a reliable party of good means and well known to the Branch ; and
(c) the introducer personally knows the account holder whose account he has introduced.
33. Introduction by staff other than Officers holding power of attorney prohibited.-No other staff member except the Officers holding power of attorney shall 'introduce any account, after having ensured that the account holder is personally known to them, and has signed the AOF in their presence.
41. Verification of introducer's signature.-The signature of the introducer shall be verified by the Officer-in-Charge Deposits Depart--ment/Cancellation Officer in case of big Branches.
196. Manager to sign in full on specimen signature cards.-All Specimen Signature Cards shall bear the full signature of the Manager/Second Officer/Deposits incharge and the "Signature Admitted" stomp affixed near the specimen signature of the account-holder.
44. Approval of Manager.-(a) The Manager's approval shall be obtained on the Account Opening Form. In case of big Branches, the Officer---in-Charge, Deposits Department may also approve the Account Opening Form.
(b) (i) The signature on the Specimen Signature Card must be blocked in red ink by the initials of the Account Opening Officer at both the ends of the signature. The blocking will be a protection against tampering with the signature.
(ii) The Specimen Signature Card must be kept up-to-date and balanced periodically to ascertain that no card is missing.
(iii) As soon as a continuous variation is noticed in the specimen signature of a client, his fresh signatures are to be obtained on his Account Opening Form and specimen signature cards by the Manager only. It is to be carefully noted that the Manager only has to admit fresh signature under his signatures.
58. Authentication of the signature of . Account-holder.-The signature of the account-holder shall be authenticated by the Manager/Officer Incharge Deposits Department by signing across the stamp "Signature Admitted" on the Account Opening Form and Specimen Signature Cards.
59. Authentication of the Account in the Ledger.-The opening of the account and issue of Cheque Books in the Ledger shall be authenticated by the Manager/Second Officer/Officer Incharge, Deposits Depart--ment by signing across the Title of the Account and in the Cheque Series Cage.
Account Opened & Closed Register shall also be initialled by him.
61. Letter of thanks to Introducer.-A letter of thanks by registered post shall be invariably sent to the introducer on the form appended to the Account Opening Form and to the account-holder on Form Dep. 372.
62. Checking of Account Opening Form.-All new accounts that are opened during the day, shall be personally checked by the Manager/ Second Officer and of Officer Incharge Deposits Department in case of big Branches, at the close of business each day.
63. The Officer, checking the new account shall particularly see the introductions, the amount with which the account is opened, whether the account is opened with cash of cheque, nature of business of party and other particulars such as the Cheque Book Requisition Form, the Partnership Deed (if any) and Resolution in case of Limited Companies.
188. New Accounts.-No new account shall be opened unless :-
(a) Proper introduction has been obtained.
(b) The Account Opening Form is complete in all respects in presence of an officer of the Bank with temporary and permanent addresses of the applicant.
(c) An initial deposit has been made in cash. (Accounts with Cheques may be opened only with the permission of the Manager, when the party is respectable and/or otherwise known to him).
(d) Enquiries have been made from the Ledger Keeper that no other account exists in a similar name.
189. Proper Introduction.-Cheque Books to new account-holders shall only be issued when -
(a) They have provided proper introduction to the Bank about the correctness of their names, addresses and occupations.
(b) The Account Opening Form is verified by the Deposits Incharge and his initials have been obtained on the Account Opening Form and Cheque Book Requisition Slip.
(c) The Cheque Book Number is recorded on the Ledger Folios of the account-holder and the Cheque Books Issued Register.
194. Entry of account in account opened and closed Register.-All accounts opened and closed during the day, shall be entered in the "Accounts Opened and Closed Register" and the actual number of the Current Deposit and Saving Bank running accounts shall be worked out.
201-A. Important precautionary measures regarding operations in new accounts.-All new accounts shall remain under active supervision for three months from date of opening. Proper enquiries are to be made by Manager keeping in view the transactions made and balances retained in new accounts where heavy credits are received in Clearing/ Transfer/Transfer Delivery.
Wherever possible, the collecting/paying branches shall establish immediate contact with the drawer of such credits. In case of heavy credits in newly opened accounts through Transfer/Deliver, collecting branches should alert the paying branches to make through enquiries before payment."
4. It has been admitted before me by the learned counsel for the petitioner as well as the Bank officials present in the Court that all banks including the petitioner-Bank who receive Government money from the counter of State Bank of Pakistan/National Bank of Pakistan against cheques/ vouchers, follow the following procedure while making the endorsement on vouches etc :-
(i) Received payment.-This endorsement is axed on cheques/vouchers made out in the name of Bank. Sometimes, the instrument is made out as Bank A/C Mr./M/s. . In both cases the Bank gives receipt of amount on behalf of the beneficiary who must be an account holder and who can be produced, if so required ;
(ii) Payee's signatures verified.-This endorsement means that the payee is a customer of the Bank and that his signatures are verified from the record available with the Bank and that he can be produced if so required ;
(iii) Payee's account will be credited on realisation.-The endorsement means that the payee's account will only be credited after when the instrument is cleared by the issuing authority. It also insists that only the payee's account will be credited and no body else's account can be credited.
Again the payee being an account holder can be produced if so required ;
(iv) Disbursement guaranteed.-This endorsement is affixed only on instruments belonging to very well known customers of the Bank. It indemnifies against all wrong payments. Any wrong payment against such instruments can be claimed back from the Bank.
(v) Branch endorsement confirmed by main Branch of Bank.-Specimen signature of all the Pakistan Branches of the Bank are not available with the Treasury Office/State Bank of Pakistan/National Bank of Pakistan. So in order to facilitate the work for these institutions only a few specimen signatures of officers posted in Main Branch of the Bank, also working as Collecting office are provided to them. The main Branch after thorough check-up verified the endorsement of the other branch. One of the endorsements discussed above ran be affixed and the responsibility of the above can be pin-pointed in the light of the foregoing."
5. According to the averments made in writ petition, Account No. 3596 was opened on 31-5-1978 with the petitioner-Bank by some one representing himself to be Liaquat Abbasi with cash deposit of Rs. 500 which account was introduced by Mr. Muhammad Ashraf, Cash Deposit Incharge of the petitioner-Bank on the recommendation of one Tariq Rana, Munshi of Mr. Iqbal Riaz an account holder of the petitioner-Bank. This account was maintained and operated by Liaquat Abbasi. He deposited a Treasury Voucher of Rs. 1,85,000 in his aforesaid account for clearing purposes on 25- 6-1978 which was in turn sent by the petitioner-Bank to the Treasury Office, Lahore, for the realization. The Treasury Office, Lahore District, released the amount in favour of Liaquat Abbasi account holder after endorsing the Voucher. Thereafter, the State Bank of Pakistan, Lahore, credited the disputed amount which was accordingly disbursed in the account of Liaquat Abbasi. Lie withdrew this amount through various cheques during the period between 25-6-1978 to 11-7.1978.
The payments of these cheques were collected through Maqsood Ahmad, Muhammad Azim, Muhammad Islam and Liaquat Abbasi the account holder. It is further stated in the writ petition that on 29th of September, 1980, the Sub-Inspector, Police Station, Krishan Nagar, approached the petitioner-Bank for the original Bank's record regarding Account No. 3596 favouring Liaquat Abbasi ; who, informed the petitioner-Bank that the Government cheque issued for the disputed amount in the name of Liaquat Abbasi was fraudulently procured and got paid by some one with the connivance of a gang of forgers. It is also stated in the writ petition that the petitioner-Bank came to know that the amount, in dispute, was deposited originally by one Mr. Abdur Rehman Abbasi in the Lahore Treasury under the head "Revenue Deposit Provincial" by the order of respondent No. 3 as Security vide a Deposit No. 26084 dated 30-3-1978, till the final decision in the suit A. R. Abbasi v.
Government of the Punjab. Later, the said Abdur Rehman Abbasi died and voucher of this amount was fraudulently procured by someone representing himself as Liaquat Abbasi being Special Attorney of the latter. The voucher was deposited with the petitioner-Bank as stated above for the collection of the disputed amount. It is also stated in the writ petition that a case F. I. R. No. 436/80 dated 30-7-1980 under section 409/471/468/420/419 has been registered by the respondent No. 3 with the Police Station, Anarkali, and the petitioner-Bank believes that the culprits have been apprehended by the Police including the subordinates of the respondent No. 3 and some one from the Treasury Office. In this background, the petitioner-Bank was directed by respondent No. 2 to remit the amount of Rs. 1,85,000 in the Lahore Treasury.
6. The recovery of the amount, in question, as arrears of land revenue has been challenged by the petitioner on various grounds including that the impugned order was passed in violation of the principles of natural justice and without giving show-cause notice to the petitioner-Bank to explain its position with regard to the alleged lack of care in the realization of the disputed amount. ,
7. During the pendency of the writ petition, the Deputy Commissioner expressed his willingness to discuss the question of petitioner's liability with a Representative of the petitioner before taking any action for the recovery of tae disputed amount. This proposal was accepted by the learned counsel for the petitioner as is apparent from the interim order dated 3-3-1981 of this Court which reads thus;- "Mr. M. Saleern Sahgal, Advocate for the petitioner.
Mr. Riaz Ahmad, Advocate-General for respondents.
Report and parawise comments have been filed. Learned Advocate---General has stated that respondent No. 2 is prepared to discuss the question of petitioner's liability with a respresentative of the petitioner before taking any action for the recovery of the amount, in question for which some time may be allowed and the case be adjourned. Learned counsel for the petitioner accepts the proposal of the learned Advocate-General. The case accordingly stands adjourned and shall be fixed at the request of either of the parties."
In consequence, the second respondent, in the first instance, entrusted the matter for enquiry into the whole affair to the Assistant Commissioner, who after recording the statement of the Manager of the petitioner-Bank, submitted his report to the District Magistrate/Deputy Commissioner. The latter reconsidered the matter and after hearing the arguments of the learned counsel for the parties at length and perusing the record, gave a finding of fact that the amount drawn from the Treasury was not disbursed to the genuine person by the petitioner-Bank and as such the Government was entitled to recover the same as arrears of land revenue under section 3(1) of the West Pakistan Government Dues Recovery Ordinance, 1962 (herein--after called the Ordinance) read with Notification No. 7321-65/3589-LRV, dated 12-11-1965. It was further held that the petitioner-Bank failed to observe the instructions contained in its Deposit Manual for opening of the new accounts. The concluding para. Of his order, in question, reads thus :- "After considering the arguments of the parties, it has been observed that no doubt, that the fraud was initiated by the Ahlmad and Reader of the civil Court concerned, but it could not be finalised unless Muhammad Ashraf, Bank Officer of the United Bank Ltd., Azam Cloth Market Branch, Lahore had not made major contribution towards its completion. The account in the name of Liaquat Abbasi was opened on his introduction. All the endorsements on the treasury voucher were made by the Bank authorities. The Treasury Officer could not refuse to enface the voucher in the presence of all these valid endorsements. The Bank authorities did not observe the instructions contained in Deposit Manual for opening of the accounts and all the necessary endorsements were also made on the treasury voucher. In my view the United Bank Ltd., Azam Cloth Market Branch, Lahore is fully responsible for unauthorised payment of Rs. 1,85,000 to unconcerned persons and is, therefore, liable to make repayment of this amount. There is no illegality in the letter dated 30-12-1980 issued by the Finance Department as well as in the notice dated 7-2-1981 issued by the Deputy Commissioner, Lahore. If the Bank authorities failed to remit the amount of Rs. 1,85,000 into the treasury, then this amount can be recovered as arrears of land revenue by the District Collector."
8. It has been argued by Mian Bashir Ahmad, learned counsel for the petitioner that the amount, in dispute, was not recoverabe as arrears of land revenue under the Ordinance. The submission of the learned counsel is that two conditions precedent must be fulfilled before initiating the proceedings under the Ordinance. There must be a person froth whom any dues are recoverable by Government and including a person who is responsible as surety for the payment of any such dues ; and secondly, there must be a notification by the Government declaring that any dues or class of dues recoverable by Government shall be recoverable from any such person as if dues were arrears of land revenue. It is respectfully submitted by the learned counsel for the petitioner- Bank that "dues" are those which are determined and established by a competent Court- of law. It is further submitted that in the instant case, there is no determination by a civil Court of competent jurisdiction as to whether any amount is recoverable by the Government from the petitioner-Bank arid, therefore, the amount, in question, could not be recovered from the petitioner under the Ordinance, on the basis of the Notification No. 7321-65/3589-LRV, dated 12-11-1965 whereunder all classes of ascertained dues payable to Government have been made recoverable as arrears of land revenue. In this connection reliance was placed on Province of West Pakistan v. Muhammad Ayub Khuhro PLD 1967 Kar. 673, Zakria A. Bawany v. City Deputy Collector, Karachi and two others (1), Constructions, Ltd., Karachi v. Executive Engineer, Indus Bridge Division, West Pakistan P. W. D., Thatta and another (2), Government of West Pakistan and others v. Abdul Majid and another (3) and Abdul Latif v. The Government of West Pakistan and others (4).
9. There is no cavil with the proposition of law advanced by learned counsel for the petitioner that the claim of the Government can be recovered as arrears of land revenue under the Ordinance, only when the claim is converted into established dues after determination in accordance with law or justice. In the instant case, however, no exception can be taken to the impugned demand on the ground that the claim against the petitioner-Bank Bank has not been assessed or adjudicated by a Court of competent jurisdiction, in that the petitioner-Bank itself consented to participate in the proceedings before respondent No. 2 for determination of its liability and having done so, the petitioner-Bank is estopped by its conduct to reagitate this question. The rule laid down in the precedent cases is clearly distinguishable, as in those cases. The amount was sought to be recovered as arrears of land revenue by violating the principles of natural justice. In the present case, petitioner has been afforded an adequate opportunity before determination of the dues recoverable from him by respondent No. 2 and, therefore, in view of the ratio laid down in Haji Mahboob Alam v. Province of the Punjab through Collector, Sargodha and another (5), no exception can be taken to the determination of liability by the Deputy Commissioner. Mahboob Alam's case was that of a Commission Agent appointed by the Deputy Director of Agriculture, Sargodha, for the sale of chemical fertilizer and seeds on behalf of the Provincial Government. He failed to deposit the sale proceeds with the Government, in consequence thereof, he was declared "defaulter" under subsection (2) of section 3 of the Ordinance. The amount due became recoverable as land revenue under the Revenue Recovery Act, 1890 (Act 1 of 1890). The Commission Agent denied his liability alleging that he had paid the entire amount against receipts but no receipts were produced by him. He was arrested for detention in the prison. The writ petition as well as Letter Patent Appeal filed by him was dismissed by the High Court. Subsequently, the suit for a declaration and permanent injunction filed by him was also dismissed on a preliminary objection that it was not competent unless he deposited the amount claimed under protest as required by section 4 of Revenue Recovery Act, 1890. The Commis--sion Agent filed a petition for leave to appeal in the Supreme Court. The learned counsel for the petitioner in that case basing himself on the ratio laid down in Abdul Latif's case, Abdul Hamid Khan's case (6) and Muhammad Ayyub Khuhro's case took up the plea that there was "no proper determination of the sum due from the petitioner". The contention was repelled by the Supreme Court. It is held:-
(1) PLD 1975 Kar. 1008 (2) PLD 1975 Kar. 1059
(3) PLD 1963 Kar. 653 (4) P L 13,1962 SC 384
(5) 1973 SCMR 415(6) PLD 1969 Pesh. 324 "In the instant case the facts are radically different. From the copy of the judgment in the writ petition filed by the petitioner herein prior to the institution of the suit, it appeared that the position taken by the peti--tioner was that he bad paid the entire amount to the Agriculture Assistant against receipts duly executed by him and therefore he was not "a defaulter" within the meaning of the 1962 Ordinance. Upon this plea the learned Judges of the Division Bench adjourned the case more than once to enable the petitioner to produce the receipts which he secured from the Agriculture Assistant. This he failed to do, although the case was adjourned a number of times.
From the examination of the record which was summoned by the learned Judges of the Division Bench from the Assistant Director, Agriculture it also transpired that numerous notices were issued to petitioner before his liability for the sum outstanding against him was determined. Not only that he even appeared in response to one of such notices. Therefore the learned Judges of the Division Bench observed that it was "factually incorrect that the petitioner was not given an opportunity to show cause by the Deputy Director, Agriculture". This in our opinion clearly distinguishes the instant case from the rule laid down in the precedent cases."
10. The next submission of the learned counsel for the petitioner-Bank. Is that jurisdiction cannot be conferred on respondent No. 2 with consent of the parties and that the petitioner merely agreed to discuss the question of liability with respondent No. 2 and not for "proper determination o his liability". He further submitted that under Article 4(2)(a) of the Constitution of the Islamic Republic of Pakistan, no person can be deprived of his property without backing of law. Reference was made to Article 26 of the Constitution and Balck's Law Dictionary to show that money is also a. Property within the contemplation of the said Article. Similarly person has also been defined under Article 260 which includes a body corporate which the petitioner is. Therefore, the submission of the learned counsel for the petitioner is that there must be some valid contemporaneous law under which a person can be deprived of his property. It was respectfully submitted that there was no legal order by which the petitioner could .Be deprived of the amount, in dispute. It is further contended that under Article 4(2)(c) of the Constitution, no person shall be compelled to do which the law does not require him to do. Respectful submission of the learned counsel for the petitioner is that the law does not require him to deposit the disputed amount in terms of the impugned order which has no legal sanctity. Mian Bashir Ahmad, learned counsel for. The petitioner further submits that objection to the competence of the Deputy Commissioner to pass the impugned order was duly raised by the petitioner-Bank viae an application dated 1-6-1981, 'in which it was prayed that the Deputy Commissioner should in the first instant decide "Whether the learned Deputy Commissioner has the jurisdiction in the matter to take cognizance and lable the amount in question as Land Revenue; whether an enquiry could be instituted in terms of the High Court order dated 3-3-1981; whether the learned Deputy Commissioner could delegate another officer in terms of the order passed by the Hon'able Lahore High Court, Lahore."
It is submitted that failure to adjudicate the preliminary submissions made by the petitioner has resulted in grave miscarriage of justice and rendered the impugned proceedings coram non judice. `I am afraid, the application of the petitioner itself was misconceived, in that, in terms of the order dated 3-3-1981 of this Court, the petitioner-Bank has acquiesced to the determina--tion of its lialoty by-'the Deputy Commissioner. This being so, the failure of, the Deputy Commissioner to decide the preliminary submissions has not rendered any injustice to the petitioner. Additionally, the Deputy Commis--sioner had not passed a mechanical order on the basis of the report of the Assistant Commissioner but has passed the impugned order after applying his independent mind and hearing at length the learned counsel for the parties and perusing the record. This being so, no exception can be taken to the impugned order on this score. There is ample authority on the proposi--tion of law that a writ even against a void order may be refused where a party is estopped by his conduct to challenge it. Reference may be made to S. Sharif Ahmad Hashmi and another v. Chairman, Screening Committee. Lahore and another (1) and Nawab Syed Raunaq Ali v.
Chief Settlement Commissioner and others (2). The effect of acceptance of offer made by respondent No. 2 by the petitioner was that the former was authorised to make proper determination of the sum due from the petitioner and, therefore, having submitted to the jurisdiction of respondent No. 2, the petitioner cannot be permitted to turn round and question his jurisdiction. This rule of law is well settled. It has been conceded before me by Syed Kausar Bashir, the Manager of the petitioner-Bank that no protest was lodged by him or his counsel at the time of recording the former's evidence before the Assistant Commissioner on 19-5-1981. This being so, I am of the view that the objection raised by the petitioner regarding the jurisdiction of the Deputy Commissioner/Assistant Commissioner in holding j the inquiry and recording his statement is deemed to have been waived by his conduct. Reference may be made to Nawab Khan and others v. Waris Iqbal and others (3), Sher Muhammad and another v. Munir Ahmad and another (4), Amanullah Khan v. Chotey Khan (5) and Sh. Bashir Ahmad v. Rahim-ud-Din and another (6).
11. The next submission of the learned counsel for the petitioner is that the reliance placed by respondent No. 2 in coming to the decision on a circular of the Provincial Government has no legal sanctity in the eye of law after promulgation of the Banks (Nationalization) Act, 1974 (Act XIX of 1974). Section 2 of this Act makes the provision of this enact--ment override alt other laws. Under sections 5, 9 and 11, the whole control and management of the Banks vest in the Central Government., The Provincial Government does-'not come into play so .Far. As the Banks are concerned. The precise submission of the learned counsel for the petitioner is that the impugned demand was bad in law, as it was based upon a circular which could not be legally taken into consideration by respondent No. 2. This argument has no force, in that, after providing an opportunity of being heard to the petitioner, and in view of the documentary evidence before him, respondent No. 2 arrived at an independent. Finding of fact that the petitioner-Bank was responsible for making good the loss to the Government as a result of lack of care in identification of customers and in verification of the title of the payee. It -has been frankly conceded before me _ by the learned counsel for the petitioner that the instructions contained in' circular (Annexure B) were duly honoured and acted upon by the' petitioner-Bank. This being so, the circular, in question, attained the status of an agreement which was duly saved under section 16 of the Act, which inter alia stipulates- (1)1978SCMR367(2)PLD1973SC236
(3) PLD 1976 SC 394(4) 1978 SCMR 167 (5)1978SCMR 14(6)1970SCMR90
(b) all contracts, deeds, agreements, powers of attorney, other than those in favour of a person vacating his office under this Act, grant of legal representation and other instruments of whatever kind subsisting or having effect immediately before the commencing day to which a Bank is a party or which are in favour of a Bank shall be of as full force and effect against or in favour of a Bank as they were immediately before the commencing day."
In the fact of the clear provisions of section 16, it is difficult to accept the view that as a result of nationalization of banks, the circular, in question, became redundant or overridden by virtue .Of section 2 of the Act. The instructions, in question, are not inconsistent with any of the provisions of the Act and, therefore, the provisions of section 2 are not applicable in regard thereto. Reference.
May be made to Darab Shah B. Dalai v. Messrs Muslim Commercial Bank td. (1).
12. The learned counsel for the petitioner further submits that the proceedings of respondent No. 2 and his order are mala fide He is trying to shield his own treasury staff which directly works under him. He himself has admitted that without the active connivance of the staff o the Civil Judge, this fraud could not have been committed. The argument is devoid of any force. The allegations of mala fide must be pleaded wit particularity. There is presumption of regularity to all official acts.
The onus lies heavily on the person who alleges mala fide. The petitioner has failed to discharge the onus in the light of the test laid down in Federation of Pakistan v. Saeed Ahmad Khan (2).
13. The next submission of Mian Bashir Ahmad is that the petitioner is protected under sections 131 and 131-A of the Negotiable Instruments Act, 1881 (Act XXVI of 1881) as the Bank account was opened bona fide and according to the established practice in banking. This contention is also, untenable. The protection under the aforesaid provisions is available only when a banker acts in good faith and without negligence. In the instant case, the account was opened by the petitioner- Bank without any proper enquiry and in clear violation -of the instructions contained in its own Manual of Deposit for opening of new accounts. The onus of proving good faith and absence of negligence as contemplated by section 131 is on the Banker claiming protection under the Negotiable Instruments Act, but no attempt has been made on behalf of the petitioner that it acted in good faith and without 'negligence. In any event, negligence is a question of fact. This disputed question of fact cannot be enquired into in the exercise of constitutional jurisdiction of this Court.
Reference may be made to Brahma Shum Shere Bahadur and another v. Chartered Bank of India, Australia & China and others (3), where Bose J. Relying on the rule laid in Matheissen v. London & County Bank (4), and observations in Paget-Banking, 5th Edn. (1947), pages 229-230 and cases in footnote (g) at page 230), held: "But the section affords protection to the banker if the banker has received payment in good faith and without negligence, otherwise the Bank which receives payment on a forged cheque or a cheque to which the customer has no title or only defective title is liable in action for conversion to the true owner."
(1) PLD 1977 SC 457 (2) PLD 1974 SC 151 . (3) AIR 1956 Cal. 399 (4) (1879) 5 C P D 7(S)
(1924) 1 K B 775(D)
14. It is next contended by the learned counsel for the petitioner that it is understood that' the Police apprehended the catlprits who have committed the fraud and it is yet to be established by the Court from whom the recovery is to be made, and, therefore, the disputed amount cannot be recovered as arrears of land revenue till the final decision of the criminal Court to whom the case may be ultimately entrusted. The contention has no force. The impugned demand cannot be assailed merely because the matter is pending investigation with the Police or sub judice before the criminal Court. The findings of the criminal Court cannot be treated as conclusive by another Court, tribunal or body. Each has a duty to make up its own min independently, justly, fairly and in accordance with law upon the materi4q placed before it. This being so, the decision of respondent No. 2 would not in any way affect the findings of criminal Court to whom the case will be entrusted for trial.
15. Learned counsel for the petitioner has further argued that the Bank cannot be burdened with.
The liability for wrongful and fraudulent acts of its staff, in that, Muhammad Ashraf unauthorisedly opened the account of Liaquat Abbasi without knowledge and approval of the Bank Manager and the mere fact that the petitioner-Bank undertook that the payment will be credited to the account of the payee", would not ipso facto hold the Bank responsible for the unauthorised act of Muhammad Ashraf. It was further submitted that stamping were routine matter and did not advance the case of respondent in any manner and no adverse inference could be drawn against the Bank on that account. Reliance was placed on the passage at page 543 of Winfield on Tort (Ninth Edition). :, It reads :- "If the servant's fraudulent conduct did not fall within the scope of his authority, actual or ostensible, ' then the master will not be liable, and in applying this rule it must be borne in mind that the mere fact the servant's position in his master's service created the opportunity for tort is not sufficient.
What is required is that the plaintiff should have reasonably regarded the servant as having been appointed by the defendant to perform that class of acts the dishonest performance of which caused his loss. If this requirement is met, but not other--wise, the servant's fraud will be found to have been committed within the course of his employment and his master will accordingly be liable."
The aforesaid passage is of no avail to the petitioner-Bank in view of my discussion in the preceding paragraphs, rather it goes against the petitioner.
16. Be that as it may, even if it were assumed that the petitioner-Bank had acted innocently, the Bank must suffer as it could have prevented the loss by exercising due care and caution. The dictum laid down in The Official Assignee of the High Court of West Pakistan and others v. The Lloyd's Bank Ltd., Karachi and others PLD1969SC301is attracted to the facts of the present case. The relevant observation at page 308 reads thus :-.
"In fact, it is in the interest of every Bank and commercial institution itself to set up within itself a trained cell in which such orders as are received from the Courts and the sources of their receipt or delivery are examined and carefully and expeditiously processed to ensure on the one hand the quick implementation of the orders, and, on the other to defeat any sharp practices that may be indulged in this behalf. 1 feel constrained to say that in the present case the respon--dent-Bank has acted recklessly and unwarily in giving effect to the Court's orders without taking note of certain obvious factors which should have put the Bank on an inquiry, to ascertain about the genuineness of the letter.
Apart from this, I think this is one of those cases wherein, even if it were assumed that the Bank has acted innocently, there is another innocent party involved in the transaction whose interest has to be put into the balance and safeguarded. In such cases, one that could prevent the loss must suffer. The rule of equity which applied as between the two innocent persons, in such cases that the one who could prevent the loss must suffer and not the other who was powerless to do so. (See observation of Lord James of Hereford in Ruben and another v. Flngell Consolidated and others and Paget's Law of Banking, page 366). While the Bank in this case could prevent the loss by a ,little more care and caution, the appellant who was completely in the dark as to how the transaction went through the Bank, could do nothing in the matter."
17. It is next contended that the petitioner-Bank has no vicarious liability in respect of any negligent act committed by the servant of the Bank in the course of his employment. The argument is based on the observation of Mc.Nair, J. In Harvey v. O'Dell Ltd. (1958) 2 Q B 78as reported at page 44 in Winfield on Tort, where it was held, "that a servant's implied undertaking to exercise reasonable care extended only to those acts which he was specifically employed to do". The above-quoted observations are of no avail to the petitioner-Bank in view of the instructions contained in Annexure `B' whereunder the petitioner was responsible for making good the loss in case of fraudulent payment taking place as a result of lack of care in that regard.
18. Learned Advocate-General has made very short but impressive submissions. He respectfully submits that petitioner. Is estopped by his conduct to seek equitable relief in writ jurisdiction. He further submits that the rule of fairplay and justice has been duly followed by respondent No. 2 and that in terms of the notification, in question, the amount, in dispute, being ascertained dues are lawfully recoverable from the petitioner---Bank in pursuance of the impugned order. The learned Advocate-General further submits that not only the Deposit Manual was violated but the endorsement made on the reverse and on the front of the voucher established the liability of the Bank. He emphasized that the endorsement on the refund voucher on its front and back side as indicated at page 5 of the order of the Deputy Commissioner, leave no doubt that the petitioner Bank was favouring . And helping the depositor and took the responsibility that the amount will be received by the person in whose favour the voucher was so issued. There appears to be great force in the submissions of the learned Advocate-General.
In view of the above, the petition fails and hereby dismissed with no order as to costs.
Finally I thank Mian Bashir Ahmad for ably assisting the Court with thoroughness. I also express my appreciation for Sh. Riaz Ahmad, the learned Advocate-General for assisting the Court with clarity and precision.