N MOHAMED HUSSAIN Vs. CHARTERED BANK MADRAS

JUDGEMENT

(1.) THE plaintiff is the appellant. The appeal arises out of a suit for recovery of rupees twelve lakhs as damages for the alleged loss sustained by the plaintiff in his business, social position, credit and reputation by reason of the wrongful action of the first defendant in dishonouring the cheques drawn by him on the first defendant-Bank. The case of the plaintiff is that he was a leading merchant in hides and skins in Madras with an average annual turnover of nearly five lakhs of rupees, that he possessed a very valuable, well-mechanised tannery at vaniyambadi, that he had built up a reputation for his goods both in Indian and abroad, that he was a customer of the first defendant-bank with whom he had an overdraft account, that an amount of 13,599-8s. was lying to his credit in the first defendant's head office in London, that in or about February 1948, the plaintiff requested the first defendant to get back the said amount from the had office at London to its branch office at Karachi, that he was desirous of purchasing hides and skins at Karachi where at that time they were selling at a rate much lower than that prevailing in Madras, that in view of the difficulty in transacting the business at Karachi the plaintiff instructed the first defendant to get back the money from Karachi and credit the same to his account at Madras, that the first defendant instead of transferring the said amount from Karachi to Madras, kept the same under fixed deposit, that the first defendant's branch at Karachi was keeping the deposit letter with them that as the plaintiff's business was going on well and the first defendant was co-operating with the plaintiff, the plaintiff did not press for the transfer of the moneys from Karachi branch to the Madras branch of the first defendant Bank, but believed in the first defendant's representation of certain difficulties in having the amount transferred, that in 1955 the first defendant agreed to give an overdraft for the plaintiff's business to the extent of 31/2 lakhs of rupees on the plaintiff's immoveable properties and that in pursuance of the said agreement the title deeds of the immoveable properties of the plaintiff were deposited with the first defendant, that subsequently on 26-111956 the first defendant agreed to give a further overdraft of Rs. 21/2 lakhs on the security of the plaintiff's existing and future stock-in-trade consisting of hides and skins and machinery, that the plaintiff operated on the overdraft account in pursuance of the aforesaid agreements and the overdrawing in the said account was below the agreed limit of six lakhs of rupees; that late in 1957 and early in 1958 the first defendant in breach of the aforesaid agreement commenced dishonouring the cheques drawn by the plaintiff on the said overdraft account without any notice to the plaintiff, that at the time when the first defendant started dishonouring the plaintiff's cheques, the first defendant had a sum of nearly two lakhs of rupees under its control in its branch at Karachi, that even when the account has not reached the agreed limits the first defendant wrongfully dishonoured the plaintiff's cheques and that in so doing the first defendant committed breach of the agreement with the plaintiff, that by reason of the dishonouring of the cheques drawn by the dishonouring of the cheques drawn by the plaintiff grievous injury resulted to the plaintiff's reputation and trade, that the first defendant neglected to get the amount standing to his credit in Karachi branch of the first defendant transferred, that the action of the first defendant resulted in the crash of the business of the plaintiff and led to his insolvency. The plaintiff, therefore, estimated the damages suffered by him at twelve lakhs of rupees from the first defendant.

(2.) THE first defendant filed a written statement denying every one of the allegations made in the plaint. The first defendant denied that they ever acted as the agent of the plaintiff in respect of the amount transferred to the Karachi branch of the first defendant-bank from its Head Office at London, that it merely obliged the plaintiff to open the current account at the Karachi branch, that the current account only at the request of the plaintiff and that the request for re-transfer of the amount to the Madras branch was made only in June, 1958. The first defendant's main defence is that they allowed overdraft facility only to the extent of Rs. 2,50,000 though the limit was mentioned as Rs. 3,50,000, with the additional facility of Rs. one lakh given to the plaintiff on the security of the immoveable property which facility was withdrawn by the first defendant and the overdraft was reduced to Rs. 2,50,000, that the cheques dishonoured exceeded the limit of Rs. 2,50,000 and consequently no amount could be claimed by way of damages for dishonouring the cheques in excess of the said limit. The first defendant further denied that the insolvency of the plaintiff was due to any wrongful act on their part and that the plaintiff is not entitled to any damages for the loss of reputation etc. as they acted strictly in accordance with their obligation under the overdraft agreement and that the plaintiff is not entitled to any of the reliefs claimed.

(3.) THE trial Judge recorded the statement that the learned advocate for the plaintiff mainly argued the case only on the footing that the overdraft was for Rs. 3,50,000 and not Rs. 6,00,000, as pleaded in the plaint. The trial Judge rejected the plaintiff's contention that the overdraft limit was Rs. 3,50,000, but held that the overdraft granted to the plaintiff was limited to Rs. 2,50,000, on the security of the plaintiff's existing and future stock-in-trade. The trial Judge also further found that the dishonour of the plaintiff's cheques by the first defendant-Bank was on account of the plaintiff's exceeding his overdraft limit of Rs. 2,50,000 during the relevant period, viz. , 1957-58. Regarding the fixed deposit at Karachi the learned Judge found that the plaintiff would not on the facts of the case have asked the first defendant to bring the money to Madras till 14-6-1958 and that the first defendant was not guilty of negligence in not repatriating the amount before july, 1959. The learned Judge also found that the first defendant was under no legal obligation to take into account the funds in Karachi while dishonouring the cheques drawn by the plaintiff, that the funds of the plaintiff with the Chartered bank at Karachi cannot be deemed to be available to the plaintiff at any time at madras. The learned Judge further found that the bankruptcy of the plaintiff was caused due to his own negligence and not to the dishonouring of the cheques by the first defendant-Bank and that the plaintiff is not entitled to claim damages under any of the heads, namely, loss of reputation, credit and social position. In the result, the suit was dismissed. The plaintiff filed O. S. Ap. No. 52 of 1964 to this court.