1. This suit has been filed by the plaintiffs for recovery of Rs.2,50,000 from the defendants and for declaration against defendants Nos. 2, 3, 4 and 5 that they are not fit for service of defendant No. 1.
2. The facts of the case as alleged in the plaint are that plaintiff No.1 deposited on 15-1-1978 an amount of Rs. 30,000 in his saving A/c No. 661 in Shahrah-e-Liaquat Branch of the defendant No.1 (hereinafter referred to as the said Branch) and another sum of Rs. 1,20,000 in the saving account No. 456 of his wife, the plaintiff No. 2, under paying-in-slips No. 888025 and 888026 respectively.
3. Having not received the statement of their said accounts the plaintiff No.1 went to the said Branch on 21-9-1978 and obtained the balances of the said accounts when he found that the aforesaid deposits were not credited to the respective accounts. The plaintiff informed the manager of the said branch and also wrote letters to the defendant No.2 and getting no response approached the banking control department of the State Bank of Pakistan through letter dated 30-10-1978 whereupon meeting between the plaintiffs and representatives of the defendant bank was arranged by an officer of the State Bank of Pakistan. It is alleged that in the meeting the officers of the defendant bank promised to reimburse the amount to the plaintiffs but later refused. It is also alleged that defendants Nos. 2, 3, 4 and 5 were directly involved in the case and they dishonestly refused to pay plaintiffs' money on baseless grounds. Having failed in their endeavour to persuade the defendants pay the money the plaintiffs filed the present suit claiming the aforesaid amount of Rs.1,50,000 said to have been deposited in their respective accounts as also a sum of Rs.1,00,000 by way of damages and declaration to the effect that defendants Nos. 2, 3, 4 and 5 are unfit for service of defendant No. 1.
4. In the written statement filed on behalf of the defendants, apart from serval preliminary objections, bank's liability in respect of the said amounts in plaintiffs' accounts was disputed on several grounds including, that counter--foils of paying-in-slips on which the claim was based, bore the signature of one Qaseemuddin who was not manager of the said branch at the time the deposit was alleged to have been made and was obtained in collusion with him. It was also averred in the written statement that the said Qaseemuddin who was once a manager of the said branch had been transferred from there in October, 1977, much before the said deposits were allegedly made on 15-1-1978. The allegations against the other defendants were also denied.
5. The following issues were adopted initially: "(1) Whether the defendant No.1 did not receive the cash amount of Rs.30,000 in plaintiff S.BA./C No. 661?
(2) Whether the defendant did not receive the amount of Rs.1,20,000 (rupees one lac and twenty thousand) in the account of plaintiff No.2, S.BA/C No. 456?
(3) Whether the defendants Nos. 2, 3, 4 and 5 all or any of them are guilty of misconduct and fraud as alleged?
(4) Whether the defendants Nos. 2, 3, 4 and 5 all or any of them are fit for banking services?
(5) Whether the defendants are guilty of neglect, want of proper supervision and improper discharge of their duties?
(6) What reliefs are the plaintiffs entitled to"?
6. Later the following additional issues were also added: "(1) Whether suit is bad for non-joinder of party?
(2) Whether the suit is bad for misjoinder of party?
7. (3)Whether the plaintiff's conduct amounts to waiver of the claim in the suit?
(4) Whether the alleged two deposit slips showing Rs.30,000 and Rs.1,20,000 have not been executed in proper manner and binding on the defendant? .
(5) `Whether the manager had no authority to sign the deposit slips and whether it is the official character of manager of a branch to receive cash and sign the same within the scope of his authority?
(6) Whether the plaintiff has acted in collusive manner with Mr. Qaseemuddin Khan the ex- manager of the branch?
(7) Whether the plaintiff's suit is an attempt to foist false claim on the bank and cause wrongful loss to the bank?"
8. It may be mentioned that by order dated 20-8-1985 passed in Suit No.1167/78 this suit was consolidated with Suits Nos.1167/78 and 1170/78 and to some extent the evidence recorded was common in all the three suits. However, as the facts of the present suit are substantially different from those of the other two suits, this is being taken up separately. Written arguments were filed on behalf of the plaintiffs as well as the defendants and despite opportunities having been given to the parties no oral submission was made.
9. It would be appropriate to take up first the three legal issues from the additional issues. With regard to issue No.1 of the additional issues, it has been contended by the defendants' counsel that the suit is bad for non joinder of the said Oaseemuddin Khan, ex-manager of the said branch who had signed the disputed counterfoils of paying-in-slips. According to the counsel the said Qaseemuddin Khan was neither manager of the said branch at that time nor authorised to receive money or issue receipts. The disputed receipts i.e. Counterfoils of the paying-in-slips, were issued by Qaseemuddin in collusion with the plaintiffs. It has been alleged that apparently the said Qaseemuddin Khan owed money to the plaintiff and instead of paying the same, he issued the counterfoils Exhs. 5 and 6 of the defendant bank. The submission is that the said Oaseemuddin Khan had signed the two counterfoils in his personal capacity, contrary to the interest of the defendant bank, and, therefore, any liability thereunder would be personal liability of Qaseemuddin Khan, who, as such, was a necessary party in the suit. As the plaintiff failed to join Qaseemuddin as a defendant the suit is liable to be dismissed for non-joinder of necessary party. In this regard reference has been made to the following cases: (1) Gul Muhammad and another v. Mir Zaman and another (PLD 1954 Lahore 406), (2) Mst. Salma Abbasi and another v. Ahmed Suleman and 2 others (1981 CLC 462), (3) Siraj Din and others v. Additional District Judge, Okara, and others (1986 CLC 975).
10. In the first case, it has been observed that necessary party is that in whose absence an effective decree cannot be passed at all. In the second case, the relevant observation referred to is that in the absence of necessary party no effective decree can be passed. In the last case, where ejectment proceedings had been filed against the sub-tenant without impleading the tenant it was held that the tenant was a necessary party.
11. None of the aforesaid case is applicable to the present case. I am unable to agree with the defendants' counsel that the said Oaseemuddin was a necessary party in this suit or that the issues cannot effectually and completely be disposed of in his absence. The plaintiff in each suit is clearly claiming the amount alleged to have been deposited with the bank and the case of the plaintiff is that notwithstanding the misappropriation by its officers and employees the defendant bank is still liable to make good all amounts paid to it by its customers. It is not the case of the plaintiffs that they paid the money to Qaseemuddin Khan in his personal capacity. Their simple case is that the money was handed over for deposit in their accounts and if any employee of the bank misappropriates the same it is a matter between the bank and the employee. The effect of not joining the said Qaseemuddin Khan as party in the suit would, of course, be that if plaintiffs fail to establish their case against the bank they would not be in a position to claim the money from Oaseemuddin Khan. Issue No.1 of the additional issue is, therefore, decided in the negative.
12. As to issue No.2 of the additional issues the submission of the defendants' counsel is that by reason of impleading defendants Nos.2 to 5 as party in the suit the suit is liable to be dismissed for misjoinder. This contention too is devoid of any force. As is apparent from the plaint, reliefs have been sought against defendants Nos. 2 to 5 and, therefore, they had to be added as parties. In case plaintiffs fail to make out any case against these defendants the reliefs against them would not be granted, but that by itself would not defeat the suit against defendant No. 1 if plaintiffs' case against that defendant is established. This issue too is, therefore, decided in the negative.
13. For the third issue of the additional issues, the argument is that the said two amounts were alleged to have been deposited in the bank on 15-1-1978 but the complaint was made by the plaintiffs on 23-9-1978. It is argued that this delay in lodging the complaint was deliberate, as, one Ghulam Muhammed who succeeded in Qaseemuddin Khan as manager of the said Branch, was fully aware of the irregularities of the said Qaseemuddin Khan. Later, however, when another manager had been appointed in the said Branch the plaintiff took up the case of the alleged deposit as the new manager had no direct knowledge of these irregularities. Such conduct of the plaintiffs, it is submitted, amounts to waiver. The contention is misconceived. The plaintiffs have explained that the plaintiffs did not receive statement of account for the relevant period and the discrepancy came to their knowledge only when the balance in the two accounts was obtained by plaintiff No.1 on 21-9-1978. Thereafter, the plaintiffs took up their claims not only with the defendants but also with the State Bank of Pakistan. It is not disputed that the suit itself is well within the period of limitation. This issue is accordingly decided in the negative.
14. Issues Nos. 1 and 2 of the original issues and 4 and 5 of the additional issues are inter-linked and may, therefore, be taken up together.
15. On these issues the contention on behalf of the plaintiff is that on 15-1-1978 the plaintiff No.1 deposited Rs.30,000 in his account No. SB-661 in the said Branch and another amount of Rs.1,2p,000 in account No. SB-456 of his wife, the plaintiff No.2, in the same branch. Reference has been made to the deposition of plaintiff No.1, where he stated that, after completing the paying-in-slip "the cash amount along with the paying-in-slip were tendered to the cashier in presence of the bank manager Qaseemuddin who had in the meantime called me in his cabin. The cashier brought back the pay-in-slips after checking the amount and putting the bank stamp thereon and the bank manager then signed them and returned the counterfoils of the pay-in-slips to me." Photo copies of the counterfoils of the said two paying-in-slips are Exhs.5 and 6. It has been submitted that bank's contentions that the said Qaseemuddin Khan had been transferred from the said branch in November, 1977, or that he was not authorised to sign paying-in-slips, have not only been denied by the plaintiff No.1 in his deposition, but these allegations also stand refuted by other evidence, documentary and oral, produced on behalf of the plaintiffs as well as the defendants.
16. Plaintiffs' witness Anwarul Hasan, who too is an account holder in the same branch produced as Exhs. 8/1 and 8/2 the paying-in-slip books containing counterfoils of paying-in-slips signed by the said Oaseemuddin Khan showing deposits made on ' 16-11-1977, 3-12-1977 and 4-12-1977. This witness also stated that he saw Qaseemuddin in the said branch up to February, 1978. Another account holder Wazir Muhammad produced as Exh. 7/1 counterfoil of paying-in-slip bearing signature of Qaseemuddin Khan showing deposit made on 28-11-1977 and Exh.7/2 being the statement of account showing the amount of Exh. 7/1 having been credited to his account.
17. Reference has also been made to several other documents and deposition of witnesses examined by the parties. Accordingly it has been submitted that defendants' allegation that the said Qaseemuddin Khan had been transferred from the said branch in October or November, 1977 or that the paying-in-slips signed by him were of no legal effect have been thoroughly disproved and it has been established that the said amount of Rs. 30,000 and Rs. 1,20,000 had been deposited in the respective accounts of the plaintiffs on 15-1-1978 which amounts the defendant bank is liable to pay.
18. The defendant bank has denied its liability on several grounds. It is contended that on 15-1-1978 when the said two amounts of Rs. 30,000 and Rs.1,20,000 are alleged to have been deposited in the accounts of plaintiffs Nos.1 and 2 on paying-in-slips, Exhs. 5 and 6, under the signature of Qaseemuddin Khan, the said Qaseemuddin Khan was no longer manager of the said branch having already been transferred from there on 8-11-1977 to another branch. In this regard reference has been made to the depositions of several witnesses. Attaur Rehman (D.W.2) who then was working as an officer in the said branch has deposed that, Qaseemuddin was manager of the branch up to first week of November, 1977 and was transferred on 7-11-1977 and thereafter one Ghulam Muhammad took over as manager of the said branch. Ghulam Muhammad (D.W.4) stated that he was transferred to the said branch on 1-9-1977 and on 8-11-1977 he took full charge of the said branch. He produced two copies of transfer order as Exh.D/42 and Exh.D/43. It is stated that as Oaseemuddin was not handing over charge a fresh order dated 8-11-1979 (Exh.D/44) was issued. Abdul Khalique (D.W.3) who was cashier in the said branch deposed that Qaseemuddin had been transferred and he went away in the first week of November, 1977 and thereafter Mr. Ghulam Muhammad only used to sit in manager's cabin.
19. It has been submitted that the manager of a branch is not authorised to accept cash deposits.
20. Under Chapter II of Part III at pages 31 and 32 of the Bank Manual (Exh.D/67) the receipt of cash is the exclusive function of the cashier who must sign the paying-in-slips along with one of the authorised officer of the bank, but in this case admittedly the alleged paying-in-slips were neither signed by the cashier'nor by the concerned authorised officer and these bear the signature of Qaseemuddin only. Reference has also been made to the officer's power of attorney, a copy of which is Exh.D/68, under which, it is submitted, that the acts of receiving cash deposits, signing of receipts, giving of valid discharges, etc. Have to be performed jointly with another attorney and not by a single attorney. For this reason too paying-in-slips signed by the manager alone would not bind the defendant back.
21. The further contention is that the rubber stamp affixed on the two paying-in-slips, Exhs.5 and 6, were not that of the said branch. Abdul Khalique (D.W.3) who was working as the receiving cashier at the said branch stated in his cross-examination that, the rubber stamps dimly visible on Exhs.5 and 6 were not of that Branch. It has been contended that the reason why the said two counterfoils of paying-in-slips (Exhs.5 and 6) were not signed by the cashier or the authorised officer was that the same never went to them and forged stamp was put thereon.
22. One of the main defence raised by the defendants is that the said Qaseemuddin Khan once a manager of the said branch was no longer manager thereof on 15-1-1978 when the disputed amounts were allegedly deposited, having already been transferred therefrom in October, 1977.
23. This is the stand taken by the defendants in their joint written statement filed on 15-9-1979. At the evidence stage, however, the defendants took the stand that Qaseemuddin Khan was transferred from the said branch on 8-11-1977, but, the first office order about Oaseemuddin Khan's transfer from the said branch, produced as Exh.D/43, bears the date 1-9-1977.
24. In his examination-in-chief the plaintiff No. 1 stated that: "I had myself filled in the pay-in-slips for the above amounts, and after completing them the cash amount along with the pay-in-slips were tendered to the cashier in presence of the bank manager Qaseemuddin who had in the meantime called me in his cabin. The cashier brought back the pay- in-slips after checking the amount and putting the bank stamp thereon and the bank manager then signed them and returned the counterfoils of the pay-in-slips to me."
25. At one place, during cross-examination it was suggested to this witness that; "Q. It is put to you that Qaseemuddin had been transferred from Shahrah--e-Liaquat Branch of United Bank Limited in October, 1977 and thereafter he was never posted at Shahrah-e-Liaquat Branch of defendant bank?" and his reply was; "A. This is false. I had seen Qaseemuddin in the branch till March, 1978. I had seen him sitting as manager in the chair when I had been going to the branch till March, 1978."
26. Admittedly, some amounts had been deposited by the plaintiff in his account and that of his wife on 14-1-1978, i.e. a day before the disputed amounts had been deposited. With reference to the deposit made on 14-1-1978 the following questions and answers were recorded in the cross- examination: Q .At what time did you deposit this amount on 14 .1978?
27. A. Do not remember the exact time but it would be around noon?
28. Q. Did you meet the manager Oaseemuddin on 14-1-1978 when you had gone to deposit these amounts?
29. A. No. At that time I had deposited the amounts at the cash counter. I may, however, add that I had met the manager Qasimuddin earlier in themnrnina on 14-1-1978. This was in connection with the release of a mortgaged property of my wife. Mortgage of this property belonging to my wife was in favour of the bank and Qasimuddin as manager of the branch along with a legal officer of the bank had gone with me for the purposes of registration of the documents. In that connection I had met manager Qasimuddin in the morning but I had not seen him again when I had gone to deposit the above amounts around noon on 14-1-1978.
30. Later, in the cross-examination the witness stated: "I had mentioned earlier in answer to a question about the mortgaged loan. The property belonged to my wife and the loan had been taken from this branch of United Bank Limited. The loan was taken in the name of my wife." -- From the above, it would be seen that the case of the bank initially was that Qaseemuddin Khan had teen transferred from the said branch in October, 1978 but plaintiff No. 1's statement that Oasimuddin had signed certain papers as manager of the bank on 14-1-1978 does not appear to have been effectively challenged or rebutted. The property papers alleged to have been signed by Qasimuddin on 14-1-1978 before the registrar have not signed these papers and the statement of the witness was false.
31. The plaintiff examined one Anwarul Hasan a businessman who too had his office in the same building as that of the plaintiff and maintained his business account in the same branch of the defendant bank. He deposed that: "When I used to go personally for deposit of money Oaseemuddin used to call me in his cabin and there he used to sign the pay-in-slips." He produced as Exh.8/1, paying-in-slips book in which under paying-in-slip No.320767 certain amount had been deposited in the said Branch on 16-11-1977. The counterfoil of this paying-in-slip bears the signature of Qaseemuddin. Two other counterfoils of paying-in-slip dated 1-12-1977 were also produced by this witness showing deposits in his account in the said branch and these too bear the signature of Qaseemuddin. This witness stated that he saw Qaseemuddin in the said branch up to February 1978. The bank failed to controvert these documents. Plaintiffs' witness Wazir Muhammad produced his paying-in-slips book as Exh.7/1 and the statement of account as Exh.7/2. The counterfoil of the paying-in-slip produced by this witness also bears the signature of Qaseemuddin and shows that deposit in his account in the said branch was made on 28-11-1977 and the statement of account (Exh.7/2) shows that the amount deposited under Exh.7/1 was duly credited to the account of the witness. The above evidence, oral and documentary, disproves bank's conteption that Qaseemuddin had been transferred from the said branch in the first week of November, 1977, much less in October or September of that year.
32. The shifting stand of the bank with regard to the date of transfer of Qaseemuddin from the said branch makes it necessary to undertake close scrutiny of the evidence on the point. Reference has already been made to office order dated 1-9-1977. (Exh.D/43) regarding transfer of some officers including Qaseemuddin. Another document concerning Oaseemuddin's transfer is Exh.D/44. This is a photo copy of an unsigned copy of letter dated 8-11-1977 addressed to Qaseemuddin which reads as follows: "We understand that since you have handed over charge of the branch to Mr. Ghulam Muhammad.
33. You are, therefore, advised -to report to the undersigned immediately on receipt of this letter. This is in partial modification of our office order dated 1-9-77."
34. In this document there is no mention as to when, if at all, charge was handed over by Oaseemuddin. The letter, even if written then, was written on the assumption that charge had been handed over, which assumption as would appear from other evidence, was not correct. In this regard a reference may be made to the evidence of some of the defence witnesses. Attaur Rehman, D.W.2, in his examination-in-chief deposed that: "Mr. Qaseemuddin was manager of the branch up to first week of November, 1977. After Qaseemuddin the next manager of the Shahrah-e-Liaquat Branch of United Bank Limited was Mr. Ghulam Muhammad."
35. In his cross-examination the witness stated "Now I am Manager in Bhimpura Branch of UBL. Before I took over there was handing over and taking over charge. Whenever an officer is transferred there is handing over/taking over charge.
36. This is the rule in the bank. Transfer orders of Mr. Qaseemuddin were issued when he was transferred and his function came to an end and Mr. Ghulam Muhammad told the branch that he has been transferred to the branch. Transfer order was issued on 1-11-1977 and handing over and taking over was completed on 7-11-1977."
37. It would be interesting to note that no document witnessing the handing over/taking over of charge in respect of Mr. Qaseemuddin and his successor was produced. Similarly, the transfer order dated 1-11-1977 referred to by his witness was also not produced. This witness has further stated in his cross-examination that: "So long as Mr. Qaseemuddin was manager, a name plate containing his name used to remain on his table... This name plate remained till 7-11-1977. After handing over the charge of Shahrah-e--- Liaquat Branch he went to the Campbell Street Branch of the bank After taking over the charge of the branch, Mr. Ghulam Muhammad occupied the manager's table and his name plate was placed on the table."
38. According to the witness Qaseemuddin after handing over charge went to the Campbell Street Branch. But this is not what the letter, Exh.D/44, says. If that letter is to be believed Qaseemuddin had to report to the Second Vice-President of the bank. The statement of the witness about the placing of Ghulam Muhammad's name plate on manager's table is also contrary to the deposition of the said Ghulam Muhammad. This witness has admitted the deposit of Rs.35,000 in the account of Wazir Sons on 28-11-1977 under paying---in-slip Exh.7/1, bearing the signature of the said Qaseemuddin.
39. Abdul Khalique the then chief cashier of the said branch was examined as D.W.3. He has deposed: "I do not know when Mr. Qaseemuddin handed over the charge. I do not know when he received transfer orders but I know that he was transferred. No body told me that Oaseemuddin had been transferred but when I initialled my presence in the attendance register I noticed that Qaseemuddin had not initialled his presence and from this I concluded that Qaseemuddin had been transferred. I could not have made this inference just from one day but I drew the inference after about 5 or 6 days."
40. Here again the attendance register on which the said Qaseemuddin used to sign along with other staff members and which was undoubtedly in the possession of the bank and one of the basic document to establish the date of Qaseemuddin's transfer, was not produced to show the exact date up to which he remained as manager of the said Branch. This witness admits the genuineness of the counterfoil of the paying-in-slip No. 950926 dated 28-11-1977 (Exh.7/1) signed only by Qaseemuddin. He also admits that under this an amount of Rs.35,000 was deposited with the bank.
41. The next witness Syed Ateeq Ahmed Hashmi (D.W. 5) has also, during his cross-examination, admitted documents showing that much after 8-11-1977 Qaseemuddin was still in the said Branch.
42. In his cross-examination the witness has stated: "I see photostat of a certificate dated 24-12-1977 signed by Mr. Qaseemuddin Khan, the ex- manager of Shahrah-e-Liaquat Branch of UBL and indemnity Bond dated 12-6-1979 signed by Mrs. Noor Jehan Begum and I say that they are correct. These photostats are exhibited as Exhs. Nos.
43. D/86 and D/87. Exh.D/86 is a certificate in respect of three FDRs and admittedly bears the signature of Mr. Qaseemuddin who signed this as Manager, UBL and the date put on this certificate under his sianatnre is 2d-12-1977. The witness .Also admittedQaseemuddin's signature on Exhs.D/85 and D/90, being photo copies of FDRs dated 19-11-1977, 19-11-1977 and 1-12-1977 respectively.
44. This witness admitted the paying-in-slips dated 15-11-1977 and 1-12-197'7 (Exhs.8/1 and 8/2), both bearing the signature of Qaseemuddin. On this point reference may also be made to the evidence of Muhammad Khaliq (D.W. 6). In his examination-in-chief he stated: `I see document marked X' which is a pay-in-slip dated 30-11-1977 showing deposit of pay order for Rs.1,55,000 deposited in Account No.1785-C/A in the name of K.G. Traders which is the name of my firm. I see document marked `Y' which is a bearer cheque for Rs.1,55,000 dated 30-11-1977 issued by M/s. K.G. Traders signed by me. The beneficiary of the said pay order for Rs.1,55,000 was Mr.G.R.
45. Munshi and should ' have been deposited in the account of Mr.G.R. Munshi, Mr. Qaseemuddin the then Manager of UBL Shahrah-e---Liaquat Branch asked me to issue a cheque for Rs.1,55,000 to him as the amount had been wrongly deposited by him in my account'."
46. The above statement would show that on 30-11-1977 Qaseemuddin was manager of the said branch as on that date cheque was issued by the witness at the request of Qaseemuddin who was "the then manager" of the said branch. Later, though the witness has tried to change his above statement, perhaps to please the bank for whom he was working as a clearing agent, by saying that, "I do not remember exactly whether Qaseemuddin was then manager," his earlier statement appears to be correct as it also finds support from Exh.D/55, which is a letter dated 1-3-1979 written by this witness to defendant No. 5. The relevant part of the letter reads: "-------and I had duly informed them that this is one of the bunglings committed by Mr. Qaseemuddin Khan who happened to be the manager of this branch at that time."
47. And that: "Any way since the said amount was wrongfully deposited in my account by Mr. Qaseemuddin Khan, I expressed my intention to write to the bank clarifying my position and disassociating myself from the said bungling. However, Mr. Qaseemuddin Khan being the personwhom I had to address such a letter advised me "
48. The written statement in the suit was filed on 15-9-1979, much after the dismissal of Qaseemuddin on 7-12-1978, as such there is no reason to doubt that at the time of filing written statement the defendants were aware of the exact date of Qaseemuddin's transfer, yet the date given in the written statement could not be substantiated and the defendants had to abandon that for new dates which too stood disaproved. In these circumstances it could justifiably be presumed that the date of the alleged transfer mentioned in the written statement was just a random date in a bid to give the defendants a ground of defence and had correct position been disclosed perhaps such defence would not have been available.
49. From the evidence it appears that the date of Qaseemuddin's transfer from the said branch could have easily .Been established by two documents, namely, the prescribed form executed at the time of handing-over and taking over of charge and the muster roll. It has come in evidence that a formal handing-over and taking-over charge was necessary when one officer took over from another and this had to be dons on the prescribed form, but, this was not produced in respect of Oaseemuddin. Ghulam Muhammad who allegedly took charge from Oaseemuddin merely stated that, "there was no `Likhat Parhat' (written record) of my taking charge from Qaseemuddin". In the face of the evidence on record and the fact that Qaseemuddin was manager incharge of a branch of a bank and not of an ordinary commercial unit, Ghulam Muhammad's statement is difficult to believe. As regards muster roll, it is apparent from the statements of defendants' witnesses that muster roll was maintained at the said branch which used to be signed by Qaseemuddin too.
50. These two documents -- handing-over/taking-over certificate and the muster roll -- were both in the power and possession of the defendant bank but have been withheld from the Court giving rise to the presumption that had these been produced these would not have supported the case of the defendant.
51. For the reasons discussed above, in my view, the defendants have failed to substantiate their case that Qaseemuddin had been transferred from the said branch before 15-1-1978 when the disputed deposits were made. They have neither been able to establish that Qaseemuddin had been transferred in October, 1977, as averred in the written statement nor in September, 1977 as mentioned in Exh.D/43 nor. Even on 8-11-1977 as mentioned in Exh.D/44 anti stated by defendants' witnesses.
52. The second point urged on behalf of the defendants is that the manager was not authorized to accept cash deposits. It has been contended that it was the function of the cashier to receive cash payments and to sign the paying-in-slips along with his immediate officer as provided under Chapter II, Part III of Bank Manual (Exh.D/67), as such Qaseemuddin even in his capacity of manager had no authority to accept the deposits and/or to issue the disputed counterfoils of the paying-in-slips under his single signature and, therefore, these counterfoils neither bind the bank nor make it in any way liable for the fraudulent act of Oaseemuddin falling outside the scope of his authority. In support of his contention that, the defendant bank was not bound by or liable for such acts of the former manager, Qaseemuddin, as fell outside the scope of his authority, the defendants' counsel has placed reliance on the following cases:
(1) Govind Narayan Kakade v. Rangnath Gopal Bajopadhye (AIR 1930 Bank Ltd. (Kamal Mansur Alain, J)
(2) Elizabeth Throne v. Heard & March (1895 AC 495).
(3) Russo-Chinese Bank v: Li Yau Sam (1910 AC 174).
53. (4)Cheshire v. Bailey (1905) 1 KB 237)).
(5) Messrs A.M. Angarwall & Company v. Nomanbhai and 2 others (1988 CLC 839).
54. In the Bombay case it was observed that where the directors have been wilfully shutting their eyes to the acts of the agents or managing agents, and recklessly sanctioning acts of such agents, consciously and truly aiding misfeasance, misappropriation and falsification of balance-sheets and the state of affair continues over a series of years, the directors are guilty of wilful misconduct and are liable to pay compensation.
55. In the second case it was held that in committing and concealing the fraud the solicitor was not acting as the respondents' agent and the action against the respondent was barred by Statute of Limitation and Trustees Act.
56. As to the third case, the facts were that, in accordance with the custom in China, that European business houses desirous of doing business with native customers engaged on terms of written agreement, Chinese intermediary commonly known as compradore, who was conversant with the European as well as Chinese language for the purpose of rendering communication possible between the parties, the respondent engaged a compradore and paid to him money at the Hong Kong branch for telegraphic transfer to his nominee at Shanghai. The compradore, to the knowledge of the respondent, had no authority without the express approval of the bank manager to receive the money or to fix the rate of exchange or other terms on which the transfer was to be effected: In the above circumstances, in an action by the respondent to recover from the appellant bank money paid to the compradore, it was held that the bank was not liable for compradore's misappropriation.
57. The facts of the fourth case were that the plaintiff, a wholesale silversmith, hired from the defendant a carriage and coachman for driving the plaintiffs traveller about London with samples of plaintiff's ware to be shown to customers. In the course of business, occasions arose when the traveller left the carriage with samples in it, in charge of coachman. On one such occasion, the coachman drove the carriage to a place where a great portion of the samples in it was stolen. In an action brought by the plaintiff against the defendant to recover the value of stolen goods it was held, that the defendant was not responsible in respect of the criminal act of his servant, the same not having been done within the scope of his employment.
58. In the last case it was observed that, "the defendant No.3 have not denied that the defendant No.2 was their manager, nor they have produced any evidence to show what were the duties of a branch manager pr that he was not authorized to deal with fixed deposit receipts and overdraft accounts and that this lack of authority was widely known to all the customers dealing with the bank. In the absence of such evidence it can safely be concluded that a bank manager is entitled to deal with the overdraft facilities granted to the customers. Therefore, when the defendant No. 2 received fixed deposit receipts from the plaintiff and adjusted them in the account of Moazzam Impex he was acting in the discharge of his duties in the normal course of business. In such situation it is well settled that the employer is liable to the loss suffered by any party due to misconduct of an employee acting within the scope of his authority."
59. It was further observed that: "From these authorities it is well settled that the liability of a bank for the misconduct of its employees or manager depends upon the extent of authority which the employee may be expected to have. In this regard if there is any lack of authority, which is known to the plaintiff then the bank can dispute its liability. Where the employee acting in the normal course of business acts dishonestly or fraudulently thereby causing loss to the customers, the bank will be liable to compensate them."
60. For the reasons mentioned hereunder none of these authorities would help the defendants. As mentioned above, defendants' counsel has relied upon Chapter II of Part III of the Bank Manual (Exh.D.67) to show cashier's authority to the exclusion of the manager, to receive cash deposit and sign paying-in-slips along with the officer-in-charge. However, the counsel overlooked the provisions of Chapter II of Part II at page 15 of the same Manual (Exh.D/67) under which the unit manager alone is vested with these authorities. Paras.11 and 12 of this Chapter are as follows: "11. All paying-in-slips (Dep. 352 and Dep. 353) or other Cash Vouchers received from the depositors shall be immediately entered in the Cash Receiving Book, giving the serial number of the transaction on the counterfoil and the paying-in-slip/voucher.
12. After receiving the cash and putting it in the drawer, the Unit Manager shall affix the "Received Cash" stamp on the paying-in-slip and counterfoil/voucher and sign in full. The paying-in- slips/vouchers shall be retained in a file with him."
61. There is no explanation as to why the above-quoted provisions would not be attracted to cases of deposits made by the customers.
62. Be that as it may, a customer coming to deposit money is not supposed to be aware of the rules prescribed by the Bank or to know who are the persons authorised to accept cash deposits or whether the paying-in-slips has to be signed by one or more persons. It may be pointed out that D.W.3, Abdul Khalique, the then cashier in the said branch admitted in his cross---examination that: "No signboard of `cashier' was affixed 'on the outside of the cabin. There was no display of any direction as to how money was to be deposited in the bank". But even if the procedure had been displayed I do not think the bank could be absolved of its liability in the circumstances like that of the present case, as a mere display of the procedure would be no guarantee of its being in the knowledge of the customers, for, neither all the customers of the bank are expected to be literate nor expected to read and properly understand the legal implications of a displayed material.
63. It cannot also be expected of a customer that ors reaching the bank he would first demand the concerned officer to show him the rules prevailing in the bank with regard to deposit of money, then to ask for the power of attorney giving authority to the persons at the counter to receive money and after acquainting himself of all these to tender money. A person working as a manager of a branch is supposed to be incharge of that branch sitting above all others in the branch and, therefore, it would be reasonable for a customer to assume that other members of the staff derive authority through him in his capacity as the head of the branch. It would be incomprehensible for a layman that while a clerk of the branch was authorized to accept money the manager was not. For a layman handing over of cash deposit to the manager of a branch would appear much safer and desirable than to a clerk.
64. Almost all the defence witnesses have stated that the cashier is the authorized person to receive cash deposit and to sign the paying-in-slips along with his immediate officer but none has produced any formal authorization for this purpose in favour of the cashier or such officer. To show that Qaseemuddin as manager was not authorized to sign counterfoils of paying-in-slips singly reliance has also been placed on the copy of Power of Attorney, Exh.D/68, issued to D.W.
5. As is apparent from Exh.D/68, it relates to officers generally and was executed on 23-5-1970. Of course, manager of a branch would fall in the category of officers but every officer would not fall in the category of manager. Manager with much more responsibilities as incharge of branch would not necessarily be having same powers/authorities as any other officer. Every officer, high or low, senior or junior, cannot be expected to enjoy similar powers/authorities, irrespective of the nature of his duties. As such I am unable to accept that Qaseemuddin as manager and incharge of the said branch had the same powers/authorities as given to D.W.5 way back in 1970, when perhaps he was still a junior officer, more so when this has not even been stated by D.W.5 while producing the said document. Accordingly, it is not possible to accept defendants' proposition that Exh.D/68 applied to Qaseemuddin and as such he could not have singly received the cash deposit or issued receipt in the form of counterfoil of paying-- in-slips, as, under Exh.D/68 such authority had to be exercised jointly with another attorney. Qaseemuddin's authorities and powers as manager could have been best proved by the power of attorney granted to him. But even otherwise to expect of a customer to know the details of powers and functions of each employee or to interpret the powers- of-attorney issued in favour of the officer is rather far-fetched. All these are matters of internal administration of the bank and it is the responsibility of, the bank to see that unauthorised persons do not accept deposits from the customers.
65. It has too come on record that the disputed paying-in-slips were not the only paying-in-slips signed by Qaseemuddin singly. Paying-in-slip pertaining to deposits made by other customers too were signed by Qaseemuddin alone and these deposits were credited to the accounts of the respective customers. One such paying-in-slip is Exh.7/1 and three other are, contained in the paying-in-slips books Exhs.8/1 and 8/2. There is nothing on record to suggest that any objection was ever raised by any one in the bank about Qaseemuddin unauthorizedly signing the paying-in- slips alone.
66. In the circumstances of the present case, where according to the plaintiff, he was known to the manager who took him in his enclosure where the money was delivered to the cashier who took away money, brought back the paying-in-slips which were duly signed by the manager and handed over to the plaintiff, I do not see how can the bank be absolved of its liability on the ground that the manager had no authority to accept the amount or to sign the paying-in-slips. If the amount was misappropriated by the manager or for that matter by any other officer of the bank the bank would still be liable to make good the loss in so far as the customer is concerned. It is entirely the concern of the bank to have honest officers and staff to eliminate chances of dishonesty and misappropriation. As such, I am unable to agree with the defendant's counsel that paying-in-slips having not been signed by the cashier and the alleged authorised officer would not make the bank liable for the amount.
67. Defendants' counsel contention that the rubber stamp affixed on the paying-in-slips, Exhs. 5 and 6, is not that of the defendant bank is based on the deposition of bank's cashier, Abdul Khaliq (D.W.3) who during his cross---examination stated that the rubber stamp affixed on the two paying-in- slips Exhs.5 and 6 is not that of the bank. This is, however, contrary to the case of the defendant as set up in the written statement. In para. 4 of the written statement it is averred: "In any case he has no authority whatsoever to sign for this branch. The ex-manager also arranged himself to put in the bank's cash stamp on the counterfoil but there is no record of any type available with the bank showing the corresponding vouchers." The statement of the cashier is also not only supported by other defence witnesses, but, this witness too in his examination-in-chief on an earlier date had made no such allegations while referring to these very stamps. It may be mentioned that the originals of Exhs.5 and 6 werenot produced as these were stated to be with the FIA and on the photo copy hardly any impression of the rubber stamp is visible. In the circumstances the above statement of D.W. 3 would appear to be an after--thought and a deliberate lie to please the bank.
68. Had the said rubber stamp not been that of the defendant bank this would have undoubtedly beep pointed out at the very initial stage when the defendants had opportunity of examining the same on the originals of Exhs.5 and 6.
69. It has also been argued on behalf of the defendant that the issuance of the said counterfoil of paying-in-slips (Exhs.5 and 6) showing deposits of Rs.30,000 and Rs.1,20,000 respectively were the result of collusiork between the plaintiffs, the said Qaseemuddin and G.R. Munshi. In this regard reference has been made to plaintiff No.1's statement about a pay order for Rs.1,55,000 issued in favour of G.R. Munshi but not deposited in that account. It has been argued that the said pay order was deposited in. The account of K.G. Traders of which one Muhammad Khalid, who was the brother-in-law of plaintiff No. 1, was the proprietor and an equivalent money from that account was subsequently deposited in the account of G.R. Munshi. It has, therefore, been submitted that, as held in the case of Sita Ram v. Radha BAi and others, reported in AIR 1968 SC 534 and certain other cases, referred to by the counsel, the bank would not be liable on the principle that, "the Courts will refuse to enforce an illegal agreement at the instance of a person who is himself a party to an illegality or fraud" as expressed in the mom, "in pari delicto potior est conditio defendentis". The submission has no force, for, there does not appear to be any evidence to support the contention that the plaintiffs were party to any fraud of the said Qaseemuddin or had knowledge of his r misdeeds. On the contrary, it would seem that either other officers and employees were glove in hand with Oaseemuddin in his illegaI activities or were so incompetent as not to have noticed what was going on in the bank under their nose."
70. The instance of the pay order amount of Rs.1,55,000 having wrongly been deposited in another account, has really no relevance vis-a-vis plaintiff's conduct. Plaintiff had referred to the said instance on the basis of information from G.R. Munshi and only to show the prevailing corruption in the said branch and to that extent he has succeeded. May be, the statement with regard to the filing of suit by G.R. Munshi against the bank for recovery of the said amount was not correct but from bank's own admitted evidence glaring irregularities have come on record; such as, the amount of the said pay order was wrongly deposited in the account of K.G. Traders, that an equivalent sum was transferred from K.G. Trader's account to the account of Q.R. Munshi to cover up the illegality and that in respect of the same pay order two paying-in--slips had been issued one being Exh. 15/10 and the other marked `X'. Merely because the plaintiff No. 1 happened to be a relative of some of the other account holders in the said branch or was acquainted to or even distant relation of the then manager of the branch it cannot be presumed that the issuance of the counterfoils of two paying-in-slips (Exhs.5 and 6) showing deposit of a total amount of Rs.1,50,000 was without consideration or the result of collusion. According to defendants' own, witnesses Qaseemuddin was a thoroughly dishonest man and earlier too he had misappropriated customers money. One such instance was that of M. Ibrahim & Sons who had lodged a claim of Rs.10,20,510 against the bank. As such presumption, if any, would be that Qaseemuddin had misappropriated the amount deposited by the plaintiff., In support of defendants' contention that the disputed amount had actually not been deposited by the plaintiff No. 1, reference has been made to the two cheques, Exhs. 15/4 and 15/5, issued by the said plaintiff to Ibrahim & Company on 15-1-1978 (date of the disputed deposits) and to plaintiffs cross--examination where he stated that: "On the same date Bashir Ahmad of S.M. Ibrahim & Sons, who was known to me, requested for a loan of Rs.2,00,000 in connection with some transaction which he was entering into. I told him that I could only give him Rs.1,50,000. I carried signed blank cheques of my wife and accordingly I gave a cheque of Rs.30,000 drawn on my account and a cheque of Rs.1,20,000 drawn on my wife's account to the said Bashir Ahmad but I made the cheques account payee in the name of S.M. Ibrahim & Sons." It has been contended that plaintiffs' above statement that, "I could only give ' him Rs.1,50,000" was the correct statement of fact as there was only about that much of money in his account and that of his wife which was deposited a day earlier on 14-1-1978. It has been submitted that had the plaintiffs deposited the disputed amounts on 15-1-1978 they would have had over three lacs of rupees in their account and could have easily given two lacs of rupees to Bashir Ahmad. The argument is wholly misconceived. The plaintiff No.1 has only stated that he told Bashir Ahmed that, "I could only give him Rs.1,50,000" and has not said that he had only Rs.1,50,000 in the accounts. There would be so many reasons for not paying more than Rs.1,50,000 to Bashir Ahmed, such as, the plaintiff had issued some cheques earlier too. Or for some reason did not want to give more than Rs.1,50,000 at the time.
71. A paying-in-slip is the only evidence which an account holder has in proof of his having deposited the money and this cannot be lightly ignored. Where a paying-in-slip bears the signature of a responsible officer, like manager, of the bank the presumption would be that the amount mentioned in the paying-in-slip has been deposited with the bank and very strong evidence would be required to dislodge such presumption. In the present case, the evidence produced by the defendant is inconsistent and unconvincing.
72. In view of the above discussion, my finding on issues Nos.1 and 2 is that on 15-1-1978 the plaintiff No. 1 had deposited Rs.30,000 and Rs.1,20,000 respectively in his and plaintiff No. 2's account Nos. 661 and 456 maintained at the said branch. On issue No. 4 of the additional issues my finding is that the said two paying-in-slips evidencing deposit of Rs.30,000 and Rs.1,20,000 in the plaintiffs' said accounts are binding on tile defendant bank and it is immaterial, ; in the circumstances of the case, as to whether or not these were executed in I the manner prescribed by bank's internal rules.
73. As regards issue No. 5 of the additional issues, it has not been established that the manager had no authority to receive cash deposit or to sign deposit slips, and, in any case the plaintiffs or for that matter the customers generally were not aware of any such limitation on the authority of the manager.
74. The above discussion covers issues Nos. 6 and 7 of the additional issues too and these issues are decided in the negative.
75. In so far as issues Nos. 3, 4 and 5, of the original issues are concerned, only general allegations have been made against defendants 2 to 5 and though it seems that attempt to deprive the plaintiffs of their money had been made by some employees of the defendant bank, there is not enough evidence to give a finding of misconduct against any particular person. Similarly, while neglect, want of proper supervision and improper discharge of duties are borne out from the various instances brought out in the course of evidence but again there is no evidence to pinpoint as to who amongst the defendants 2 to 5 or other employees of the bank can be held responsible for these. In so far as the fitness of defendants 2 to 5 for banking service is concerned, that is a matter to be determined by the defendant bank.
76. As to issue No. 6 of the original issues, my finding is that for the I foregoing reasons plaintiffs are entitled to recover from the defendant No. 1 bank and the defendant No. 1 is liable to ,pay to the plaintiffs Nos.1 and 2 the sum of Rs.30,000 and Rs.1,20,000 respectively which amounts were deposited in their respective accounts in the said branch. Regarding plaintiffs' claim of Rs.1,00,000 for damages the same cannot be granted as no evidence has been produced in support thereof.
77. In the result, the suit is decreed against defendant No. 1 and in favour of plaintiffs Nos.1 and 2 for Rs.30,000 and Rs.1,20,000 respectively with interest thereon at 14% per annum from the date of filing of the suit till realization with proportionate costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.