1. ' The plaintiff had appointed Khyber Express Limited, as its agent and the defendant No.1 has been its exclusive banker in Peshawar for several years. The plaintiff alleges that to the knowledge of the defendant No.1 Khyber Express Limited was authorised to sell air tickets on credit and the average monthly sale of the tickets by its agent at the relevant time was approximately Rs.40,000 to Rs.50,000. On .30th April, 1968 Khyber Express Limited hereinafter referred as the "agent" delivered to the plaintiff a cheque dated 30th April, 1968 drawn on the United Bank Limited the defendant No.2 for Rs.1,84,956.46. The plaintiff deposited this cheque with the defendant No.1 on 1-5-1968 who presented this cheque to the defendant No.2 for collection on or about 30th May, 1968. The agent issued and delivered two cheques in favour of the plaintiff both dated 15-5-1968 for Rs.1,63,076.64 and Rs.16,671.30 drawn on the defendant No.2 which were presented to the defendant No.1 on 16-5- 1968 for collection. The defendant No.1 presented these cheques to defendant No.2 on 30th May, 1968. It is alleged that on 12-6-1968 for the first time the defendant No.1 informed the plaintiff that all the three cheques have been dishonoured. According to the plaintiff the defendant No.1 negligently, male fide and in collusion with the agent failed to present the cheques for collection in the normal course of business and wrongfully withheld them till 30th May, 1968. As a result of male fide and wilful delay and negligence on the part of the defendant No.1 in presenting the same to the defendant No.2 for collection in the normal course, the same were dishonoured and the plaintiff has suffered a loss of Rs.3,64,704.40 which it is entitled to claim from the defendant No.l. In the alternative the plaintiff has claimed that if the cheque for Rs.1,84,956.46, dated 30th April, 1968 would have been presented for clearance in the normal course of business without delay or negligence and the same would have been dishonoured, the plaintiff would have forthwith stopped credit facility which it had extended to the agent. As the defendant No.1 informed about the dishonour on 12-6-1968 the plaintiff allowed the agent to avail the credit facility whereby the plaintiff suffered a loss of Rs.96,197.22. In paragraph 12 of the plaint it has been pleaded that on or about 16-5-1968 the defendant No.1 had in its account approximately Rs.45,000. This seems to be a mistake and perhaps the plaintiff means that the agent had Rs.45,000 in its account. It is claimed that had the defendant No.1 presented the cheque in the normal course and the notice of dishonour would have been communicated in time, the plaintiff would have recovered Rs.45,000 from defendant No.2. The plaintiff has thus claimed Rs.3,64,704.40 and alternatively Rs.1,41,197.22. No relief has been claimed against the defendant No.2. which has been added as a pro forma party.
2. ' The defendant No.1 filed its written statement admitting that the plaintiff is its valuable customer but it was denied that it was known to the defendant No.1 that the agent has been allowed credit facility by the plaintiff. According to the defendant No. 1 the plaintiff submitted for collection with the defendant No.1 Peshawar Cantonment Branch seven cheques including three cheques in suit. It has been admitted that the first cheque of Rs.1,84,956 was lodged for encashment on 1-5-1968 while the other cheques were lodged on 16-5-1968 with the United Bank Limited, Lahore. The collection proceeds obtained at Lahore were to be credited to the plaintiff's account at Peshawar Cantonment Branch, of the defendant No.l. Out of these seven cheques two cheques of Rs.15,582 and Rs.7,496.45 were paid on 30th May, 1968, and other 5 cheques including the three cheques in suit were returned with the endorsement "effects not yet cleared. May be presented on 3-6-1968". It is averred that these cheques were presented on 3-6-1968, but the cheques in suit were dishonoured with the remark "not arranged for". These memos of dishonour were sent to the defendant No.1 which forwarded the three unpaid cheques alongwith the memo of dishonour to the plaintiff on 12-6-1968. The defendant No.1 has denied that for the first time the information about dishonour was conveyed to the plaintiff on 12-6-1968. The defendant No.1 supplied statement of account to the plaintiff periodically and as none of these statements showed the amount of the said three cheques credited, it amounted to sufficient notice to the plaintiff that the defendant No.1 has not been able to obtain payment. The allegation of negligence and mala fide has been denied.
3. It has been stated that the defendant No.1 as collecting banker acted in good faith and with reasonable care and is not liable for the damages claimed by the plaintiff. It has been denied that the plaintiff has suffered any loss. The defendant No.1 also pleaded that the Court has no jurisdiction to try the suit. With the consent of the parties the issues were framed on 8-11-1971, and issue relating to the jurisdiction was heard as preliminary issue. By my judgment dated 12-1-1982 it has been decided in the affirmative. When the matter came up for final hearing, with the consent of the parties, the issues were reframed as follows : - "(1) Whether the defendant No.1 has acted negligently mala fide and collusively and failed to collect in the normal course of business? If so is the defendant No.1 liable for the amount of three dishonoured cheques or any of them?
(2) Whether the plaintiffs over-traded with the Khyber Express Ltd. without assessing its financial position and with negligence and without reasonable care and caution? If so its effect?
(3) Whether the plaintiff has suffered any loss? If so he is entitled to recover damages and/or alternatively to the cheque amount?
(4) Whether the Court has jurisdiction in the matter?
(5) What should the decree be?"
4. ' As issue No.4 relating to the jurisdiction has been disposed of in the affirmative the parties lead evidence on the remaining issues and my findings are as follows:- ' ISSUE NO.1.--To establish the negligence, mala fide and collusion of the defendant No.1 the plaintiff has relied on the oral and documentary evidence produced by the parties. The admitted fact is that the defendant No.1 is the banker of the plaintiff for collection of cheques. The duties of the defendant No.1 in the present case are that of the collecting bank. In order to determine whether the defendant No.1 has discharged its duty properly, it is necessary to first state certain facts. From the evidence of the parties certain material facts are not at all disputed. It is an admitted position that first cheque Exh.6 dated 30th April, 1968 for Rs.1,84,956 was lodged with the defendant No.1 for presentment and collection on 1st May, 1968. As the cheque was drawn on 'United Bank Limited, Lahore, the defendant No.1 despatched this cheque on 7-5-1968 to its branch at Lahore. The cheque was presented for encashment and collection to the defendant No.2 on 30th May, 1968, but it was not encashed on that date. The second cheque Exh.7 dated 15-5-1968 for Rs.1,63,076.64 and the third cheque Exh.8 dated 15-5-1968 for Rs.16,671 were deposited with the defendant No.1 on 16- 5-1968. The defendant No.1 despatched these cheques on 17-5-1968 to Lahore, but the same were presented for encashment and collection on 30th May, 1968. Therefore, all the three cheques on presentation on 30-5-1968 were dishonoured. The memo of dishonour which has been produced in evidence reads as follows:- "The effects not cleared.May be presented again on Monday."
5. ' The defendant No.1 presented all the three cheques again on 6-6-1968 when they were dishonoured with a note "not arranged for". The defendant No.1 by its memo dated 12-6-1968 Exh.9 returned the cheques alongwith the memos of dishonour to the plaintiff which was received by it on 13-6-1968. On these undisputed facts, the question for consideration is whether the defendant No.1 has acted negligently in performance of its duties as a collecting banker.
6. ' Mr.Liaquat Merchant the learned counsel for the plaintiff has . contended that the defendant No.1 has been negligent at three stages viz. (1) it did not immediately present the cheque for collection,
(2) after the cheque was first dishonoured on 30-5-1968 it did not inform the plaintiff and represented without the authority of the plaintiff and (3) finally after the dishonour on 6-6-1968, the plaintiff was not immediately informed.
7. 'The bankers in general, which includes even the collecting banks, owe a duty towards their customers. They have to act bona fide, without negligence, and in good faith. Sections 73 and 84 of the Negotiable Instruments Act clearly imply that cheque should be presented within reasonable time of its issue. Delay or negligence in presentment is fraught with serious consequences, because if the drawer suffers any loss or injury due to such omission or negligence on the part of the holder, the drawer is discharged to the extent of such loss. The cheques are generally intended to be presented or paid immediately to avoid any contramand of payment by the drawer, the revocation of the authority of the banker to pay due to the death or insolvency of the drawer or overdrawing in his account by the customer. Section 84 imposes an obligation to present the cheque within a reasonable time of its issue and further provides that reasonable time can be determined by taking into consideration the nature of instrument, the usage of trade and of bankers and the facts of the case. Therefore, in order to determine whether the defendant No.1 has acted negligently the nature of the documents, the practice and usage of trade and of bankers should first be ascertained.
8. ' Mr. Liaquat Merchant, the learned counsel has referred to Halsbury's Laws of England, Vol. III, Fourth Edition para. 100 at page 75 where the duties of a collecting banker have been summed up by the learned author as follows:- "Duties of collecting banker--In collecting cheques and other instruments for a customer a banker acts basically as mere agent or conduit pipe to receive payment of the cheques from the banker on whom they are drawn and to hold the proceeds at the disposal of his customer.
9. ' The character in which a banker receives a cheque is a matter of fact in each case, he may be a mere collecting agent, or he may take as a holder for value or in due course.
10. ' As agent for collection he is bound to exercise diligence in the presentation of the cheque for payment. He fulfils his duty if, when the cheque is drawn on a bank in the same place, he presents it the day after receipt, or, when on a bank in another place, he, either presents it or forwards it on the day following receipt. The forwarding may be to another branch or to an agent of the bank, who has the same time after receipt in which to present. A non-clearing bank may so utilise a clearing bank. But in any case the bank which has received the cheque from its customer remains liable to him for default of its agent. Presentation through a recognised clearing house is equivalent to presentment to the bank on which the cheque is drawn.
11. Presentment by post is sufficient,Presentment by post is sufficient, and it would appear that when a bank forwards a cheque by post to the bank on which it is drawn the latter receives it as agent for presentment to itself, and in that capacity can hold it till the day after receipt.
12. ' Where a cheque drawn by one customer of a bank is received from another customer, it is a question of fact whether it was presented for payment or paid in for collection. If the latter, the bank has the usual time of an agent for giving notice of dishonour, but must pay in preference to a debt due to itself from the drawing customer.
13. ' If a banker fails to present a cheque within a reasonable time after it reaches him, he is liable to his customer for loss arising from the delay. The indorsers, if any, are discharged if presentation is not made within reasonable time after indorsement. Where a cheque is not presented within a reasonable time of its issue, the drawer is discharged to the extent of any actual damage he may have suffered by the failure to pay the cheque of the bank on which the cheque was drawn."
14. ' Reference has been made to Alexander v. Burchfied 1842 Man & G 1061; Rickford v. Ridge (1810) 2 Campb 537, Forman v. Bank of England (1902) 18 TLR 339 and Hare v. Henty 142 English Reports (Reprint) 374.
15. ' In Hare v. Henty an action was brought against the defendants bankers at Worthing in Sussex by a customer for alleged negligence in omitting to present in due time a cheque drawn by a bank at Lewes in the same County, where the customer sustained a loss. In this case the plaintiff deposited the cheque in his account with the defendant bank on Friday morning the 8th of July, and the defendant sent the cheque by Friday's post to its correspondent in London for presentment at the County Clearing house on Saturday to the correspondents of Lewes Bank. Accordingly the cheque was so presented and sent on by post of Saturday to the bank at Lewes where it arrived on Sunday (practically on Monday) and the payment was refused there being no funds, but if it had arrived on Saturday, it would have been paid. Confirming the decision in Rickford v. Ridge it has observed that "if there had been no country clearing house, the defendant receiving the cheque on Friday, would be bound to send it by Saturday passed to their agent at Lewes to present; and that agent would be bound to present it not later than Monday. On Monday the cheque was presented; and so the presentment was in time, within the rule."
16. ' In Rickford's case the bankers discounted the cheque on noon of 13th of June. On 14th June the bankers sent it to their London agent for presentment. The agent received it on 14th and sent it for presentment on 15th, when payment was refused. Notice of dishonour was given on 16th. Action was brought to recover the money paid in discounting. It was held that the cheque was presented in time. The bank receiving the cheque on 13th was not bound it to send it till the 14th. The agent receiving it on 14th was not bound to present it before 15th on which date it was done. This Rule according to Hare v. Hanty "establishes the general rule in all cases as between parties to the cheque". It was further observed that "the rule applies not only between the parties to the cheque but as between bankers and the customers unless circumstances exist from which a contract or duty on the part of banker to present earlier, or to defer presentment to a later period can be inferred".
17. ' The rule laid down in Rickford's case was followed in Prideaux v. Criddle 1869 L R 4 Q B 455. The learned counsel for the plaintiff then referred to Corps Juris Secundum Vol. 9 page 492 where it has been observed as follows:- "The Collecting bank must exercise due diligence in presenting an item for .payment.
18. ' As has been noted in sub-division "a" of this section, the bank must exercise due care and diligence in making prompt presentment and demand for payment. There is no lack of diligence where the bank acts on the day after it receives the item, or sooner, and, where a cheque is received on Saturday, presentation on the following Monday is within a reasonable time. A failure to present a cheque on the day following its receipt or, if such a day is a holiday, on the following day is negligence."
19. ' Reference has been made to Paget's Law of Banking, Ninth Edition page 372 where the same Rule has been followed.
20. 'From these authorities it is clear that the bank owes a duty towards its customer to act diligently, without negligence and in good faith. From sufficiently long time the rule has developed and as indicated in the aforestated authorities, for more than a century it has become universally accepted practice and usage that if the cheque is lodged for collection, the bank must send it for presentment, if not the same day the next working day. Such presentment on the next day will not amount to a negligence. It seems that most of the advanced countries where similar banking system and practice as in our country is prevalent have adopted a rule that if the cheque is presented through a clearing house, the rule of clearing houses governed the presentment and collection. However, in the absence of any usage or practice to the contrary a bank cannot be charged of negligence if the presentment is made the next day of the receipt of the cheque lodged with it for collection. It can hold till the day after receipt. When a cheque is drawn on a bank in another place, the banker can forward it on the day following the receipt. In the present case the defendant No.1 received the first cheque for presentment on 1-5-1968 and despatched it on 30th May, 1968, therefore, there was a clear violation of the general rule and practice adopted by the bankers in despatching and presenting the cheque. Likewise the two cheques despatched on 17-5- 1968 were not presented till 30th May, 1968. There is a clear negligence by the defendant No.1 in not presenting the cheque from the date of the receipt of the cheques at Lahore till 30-5-1968.
21. ' Mr. Mansoorul Arfin the learned counsel for the defendant No.1 has contended that during the past, the defendant No.1 has been encashing the cheques deposited by the plaintiff within a period of 20 to 28 days, and no objection was raised by the plaintiff. He, therefore, contended that the defendant No.1 has presented within a reasonable time, according to the practice prevalent between the parties. The learned counsel contended that the determination of reasonable time is a question of fact which is to be determined in each case separately. It is true that the question what is a reasonable time is a question of fact, but it has to be considered in relation to the nature of the document and the banking practice. It is not the dealing between aparticular customer and a banker which constitutes a practice for determination of such question. The banking practice which is universally and generally recognised and adopted by the bankers has to be taken into consideration. It is the practice of the careful bankers in general which is to be looked into for determining the question what is a reasonable time as required by section 84 of the Negotiable Instruments Act. The practice between a banker and a particular customer is completely irrelevant for the purposes of determining this question unless it is established that such dealings amount to contract or terms and conditions of the account opened with the bank. Section 84, subsection (2) provides that in determining what is a reasonable time, the nature of instrument, usage of trade and of bankers and the facts of the case have to be taken into consideration. The facts of the case will not determine the usage of trade or the practice of the banker. No doubt from the evidence of the defendant No.1 it seems that the respondent No.1 has been collecting the cheques during a period of 20 to 28 days but in none of these transactions it has been pointed out that at any time in the past any cheque deposited by the plaintiff was dishonoured. The plaintiff has not objected to the delay in collecting the cheques in the past, but it does not mean that such concession by the plaintiff amounted to an entitlement to the defendant No.1 to continue to encash and present the cheque within three or four weeks time. The defendant No.1 has been negligent from the very beginning though not taken note of by the plaintiff. It is not the case of the defendant No.1 that such dealings were in terms of contract. Therefore, in forwarding the first cheque and presenting all the cheques for encashment, the defendant No.1 has been negligent in discharge of its duties as a banker. This does not end the matter. It is alleged that after the cheque was dishonoured on 30th May, 1968 the defendant No.1 instead of informing the plaintiff immediately advised it after representing it on 6-6-1968 when it was again dishonoured. The defendant No.1, therefore, firstly, did not inform about the first dishonour and secondly, when it was dishonoured for the second time on 6-6-1968 it did not inform till 12th June, 1968. Therefore, on both the accounts the plaintiff has charged the defendant No.1 of negligence.
22. ' Mr. Mansoorul Arfin the learned counsel for the defendant has contended that the defendant No.1 has acted reasonably and in good faith in not informing the plaintiff of the first dishonour.
23. According to the learned counsel as the defendant No.2 had asked the defendant No.1 to represent the cheques on Monday, it did not return back the cheques the next day and represented it in the hope that the same will be encashed. It has also been contended that no sooner it was dis - honoured the plaintiff was informed. First, I will examine the facts. Muhammad Asghar the Manager of the defendant No.1 at Peshawar has stated in his examination-in--chief that:- "The two occasions on which these cheques were sent to the United Bank Limited are 30th May, 1968 and 6th June, 1968."
24. ' Again he stated:- "It was presented to the United Bank Limited for collection on the 30-5-1968 and 6-6-1968. I see the endorsement on the cheque return slip returning memo, relating to Exhs. 6, 7 and 8. They are Exhs.
25. 10, 12 and 13. They disclosed that on the day of presentation that is to say 30-5-1968 the effect of the draft was not cleared. There was an advice that they should be presented again on 6-6-1968. I see the Exhs.11 and 14 relating to these cheques which show that on 6-6-1968 when they were represented the effects of the drawer were not cleared."
26. ' The witness was partly cross-examined on 8-9-1983 when tne matter was adjourned for further cross-examination which was held on 26-10-1983. On that date in the cross-examination he stated as follows:- "The cheque Exh.6 was returned back to National Bank of Pakistan at Lahore, on 30th May, 1968 with a request to represent it on 3-6-1968. Accordingly, the cheque was represented by National Bank Lahore to United Bank Lahore on 3-6-1968 but it was returned dishonoured on 6-6-1968."
27. ' This is a clear misstatement on the part of the witness as on Exh.6 there is a stamp of National Bark of Pakistan Lahore showing clearing on 6-6-1968. It also bears similar stamp of National Bank of Pakistan dated 30-5-1968 when the cheque was first presented.
28. ' Mr.Mansoorul Arifin the learned counsel has contended that in Exh.20 the plaintiff has admitted to have received the information on 3-6-1968. In my opinion this is a mistake on the part of the plaintiff in typing the date as 3-6-1968 instead of 13-6-1968 when this information was received by the letter of the defendant No.1 dated 12-6-1968 Exh.9. It now seems clear that when the defendant's witness was first examined on 8-9-1983 he mentioned the date of presentation as 6- 6-1968, but when he was again cross-examined on 26-10-1983 he seems to have a breathing time during which after realising the mistake committed by the plaintiff in Exh.20 he changed his statement saying that presentment was made on 3-6-1968. Except this statement and Exh.20 which does not speak of presentment on 3-6-1968 there is nothing on record to show that the defendant No.1 presented these cheques again on 3-6-1968. To my mind the second statement by D.W.1 in cross-examination was made with the intention to cover up the delay in representing the cheque. The memo. of dishonour issued by the defendant No.2 on 30th May, 1968 required that the cheque may be presented again on Monday. 30th May fell on Thursday, therefore, on Monday it would have been 3-6-1968. The defendant's witness, therefore, to cover the delay in presentation on 6-6-1968 instead of 3-6-1968 changed his statement. This was a clear, crude and dishonest attempt to improve the case by the defendant No.1. In fact in cross-examination he stated that "National Bank informed P.I.A. about the dishonour of Exh.6 on 12-6-1968." There is nothing to suggest that P.I.A. was informed of dishonour on 3-6-1968, or before 12-6-1968. Even in Exh.9 the letter of defendant No.1 dated 12-6-1968 informing P.I.A of the dishonour, there is no such suggestion. It bears an endorsement showing receipt by P.I.A. on 13-6-1968. The statement of this witness in examination-in-chief read with Exhs. 6, 9 to 14 clearly establishes that the cheques were represented on 6-6-1968 and not on 3-6-1968 and information was conveyed to the plaintiff on 12- 6-1968. Now in these facts it has to be seen whether the defendant No.1 has acted negligently in not informing the plaintiff immediately after dishonour. In Paget's Law of Banking, Ninth Edition at page 375 while dealing with bankers duty to give notice of dishonour it has been observed that: "Where the parties reside in different places, the notice mus be sent off on the day after the dishonour of the bill, if there be a post at a convenient hour on that day and if there be n such post on that day then by the next post thereafter."
29. ' The learned counsel for the plaintiff referred to Davar's Law and Practice of Banking, Fourth Edition 242 and Practice and Law of Banking by Shelton & Fidler, Eleventh Edition page 186 where it has been observed that if the bank dishonours the cheque the banker must inform what has happened. Therefore, the well-established practice is that if the cheque is dishonoured the collecting bank is bound to inform immediately, but not later than the next working day after the dishonour of the cheque. This rule seems to be a rule of wisdom and convenience which must be enforced with more rigidity and strictness, as in the present days the local and international businesses are mostly dependents upon the banks and their advices. Further because the developed means of communication have made it easier to convey notices and advicesi immediately and without loss of time.
30. ' Mr. Mansoorul Arfin the learned counsel for the defendant No.1 contended that as the first memo. of dishonour required the cheque to be represented, therefore, it should not be deemed to be a dishonour and actually the cheque was dishonoured on 6-6-1968 and not on 30-5-1968. The learned counsel has referred to Silchar Bank Ltd. v. Pioneer Bank Ltd. and others AIR 1951 Assam 127.
31. In this case A drew a cheque on B in favour of C on 20th March, 1945. C presented it to B for payment on 21-3-1945, but it was returned with endorsement that it would be honoured after collection of assets of the drawer. C then negotiated the cheque with plaintiff bank and received full payment. The plaintiff bank then presented the cheque to B, but it was dis honoured on 26-5- 1945 on the ground that payment has been stopped by the drawer. The plaintiff thereupon for recovering the amount of dishonoured cheque sued A and C. It was held that the endorsement on 21-3-1945 did not amount to dishonour of the cheque within section 92 of the Negotiable Instruments Act, and, therefore, the plaintiff was the holder in due course when the cheque was dishonoured on 26-5-1945. With respect I am unable to agree with the view regarding dishonou as expressed in this judgment. Section 92 provides that when a promis sory note, bill of exchange or cheque is duly presented for paymen and payment is refused it amounts to dishonour by non- payment. A cheque is to be encashed on presentment, and therefore, if no paymen is made on the date of presentment it is dishonoured on that date. I the bank asks to present the cheque after few days, it does not mean that dishonour has been wiped out. Therefore, in cases of cheques even in terms of section 92 dishonour will be complete if it is not paid when it is presented for payment.
32. ' The learned counsel for the defendant No.1 further contended that the defendant No.1 was regularly sending weekly statement of account to the plaintiff which did not show that cheque has been honoured, and therefore, it was a sufficient notice of dishonour. Although according to the conditions for opening the account weekly statement was to be provided there is nothing on record to show that such statements were sent to the plaintiff. In fact the plaintiff has categorically denied that weekly statements were sent and asserted that only monthly statements were sent by the defendant No.1. The defendant No.1 has not produced any documentary evidence to establish its assertion and relied on the statement of its witnes D.W.1 who has stated earlier has made misstatement. No copy of the weekly statement has been filed. In the circumstances, I am not inclined to believe the statement of D.W.1. The defendant No.1 as collecting banker was duty bound to inform the plaintiff about the dishonour without loss of time till the next working day after the date of dishonour. Even if the cheque was returned for representation, it being a dishonour should have been conveyed to the plaintiff instead of keeping quiet for about six days. It can be noticed from the documents on record that on 30-5-1968 defendant No.2 had asked the Lahore branch of the defendant No.1 to present the cheques on Monday i.e. 3-6-1968, but it was presented on 6-6- 1968. Here the defendant No.1 has been negligent in the discharge of its duties and no explanation for such delay has been given. The defendant No.1 therefore has been negligent in the, discharge of its duties as banker and my finding is that the defendant No.1 has acted negligently and failed to act in the normal course of business. The plaintiff has not pressed the second part of the issue namely that such act was due to male fide and collusion with the agent. So far the liability to the extent of the amount of 3 cheques is concerned, the same has not been pressed. However, the alternative claim of damages will be dealt with under issue No.3.
33. ' ISSUE NO.2.--The learned counsel for the defendant has contended that the plaintiff had allowed its agent to draw cheques on a bank having its office at Lahore and credit facility given to him was not reasonable. He has further contended that even after the receipt of information on 3-6-1968 the plaintiff continued to give credit facility and, therefore, it did so at its own risk, and has been overtrading with the agent. These contentions have no force. So far the knowledge of the plaintiff is concerned, it has already been dealt with under issue No.1 where it has been held that the plaintiff came to know about the dishonour on 13-6-1968. Immediately thereafter credit facilities were withdrawn. So far acceptance of cheque in respect of Lahore Bank is concerned it cannot be termed as negligence. It is a common practice that cheques drawn on banks which have their offices in other cities are usually accepted. This does not cast adverse reflection on the conduct of the plaintiff. Issue is decided in the negative.
34. ' ISSUE NO.
3. Having decided that the defehdant No.1 has failed to discharge its duty according to law, practice and usage of trade, the question arises whether the defendant is liable to pay damages and whether the plaintiff has suffered any damage. According to Paget "if the collecting banker fails to present the cheque within the allotted time after it reaches him he is liable to his customer for the loss arising from the delay." A banker may be liable to pay the value of cheque, if due to its negligence or delay in presentment, the drawer who had sufficient funds but during the delayed period, withdrawn it or stopped payment. But this is not the case here, nor the plaintiff has claimed on this basis during argument. The claim of the plaintiff as pressed is that as it was not informed of dishonour during 16-5-1968 to 13-6-1968 it allowed credit facilities to the agent and in this way the plaintiff has suffered a loss of Rs.96,197.22. To substantiate its claim the plaintiff has produced statement of sale by the agent showing sale of tickets from 1-5-1968 to 12-6-1968. According to the learned counsel for the plaintiff during this period the plaintiff has allowed crdit facility of Rs.93,325.14. This calculation is entirely on the basis of the statements said to have been prepared by the agent which were produced on record subject to the objection of the learned counsel for the defendant that they were not proved. The statement of the plaintiff's witness is also based on this document. The learned counsel for the plaintiff has also referred to Exh.16, which is a photo copy of the account of Khyber Express Ltd., with the plaintiff. Its supporting documents viz. deposit slip, counterfoils and cheques have not been produced, as according to the plaintiff they have been destroyed. Exh.19 is also a statement of outstanding balance of agent as in June, 1981, but no supporting document has been produced. The question, therefore, arises whether the plaintiff has proved its claim for damages.
35. ' Mr.Mansoorul Arfin has contended that entries in the agent's statement of account which has not been signed even by the agent cannot prove the claim. Nor the photo copy of the ledger can be a proof of the outstanding claim. It is well-settled that production of an account book does not by itself establish the entries made therein. The entries have to be proved properly by producing its supporting documents particularly when correctness of such entries has been challenged.
36. Reference can be made to Sri Sri Raja Lakshmi Narayan Jew and others v. The Province of East Pakistan 1969 SC MR 898. In' Firm Ahmed Din Allah Ditta v. Sardar Partab Singh and others AIR 1939 Lah. 438 it was held that no presumption can be attached to the correctness of the entries in the `bahis'. It is also well-settled that no person can be charged with liability on the basis of entries in the account books, Reliance can be placed on Asia African Co. Ltd. v. Ch.Mukhtar Ahmed PLD 1968 Kar. 37 and Banwari Lal v. Mst. Hussaini and another AIR 1939 Lah.
455. The plaintiff has, therefore, failed to establish the damages suffered by it. Therefore, although the defendant No.1 has been negligent in the discharge of its duties, the suit is dismissed, as the plaintiff has failed to prove the damages suffered by it. The parties to bear their own costs.