N MOHAMED HUSSAIN SAHIB Vs. CHARTERED BANK MADRAS

JUDGEMENT

(1.) SUIT in forma pauperis to recover rupees twelve lakhs as damages from the first defendant with future interest and costs.

(2.) THE plaintiff was a leading merchant in hides and skins in Madras with an average annual turnover of nearly rupees fifty lakhs. He possessed a very valuable, well-mechanised tannery at Vaniyambadi, and he had built up a reputation for his goods both in India and outside. He was a customer of the first defendant and he had an overdraft account with the Bank. The plaintiff had 13, 599-8s to his credit in the Head Office of the first defendant Bank in London and he requested the first defendant to get the amount from the Head Office. The amount was admittedly transferred to the branch office of the Chartered Bank at karachi by the first defendant on the instructions of the plaintiff. The plaintiff's case is that be trusted the integrity and business skill of the first defendant and constituted it as his agent with reference to his dealings with the said moneys and that the first defendant failed in the discharge of its duty in omitting to get the money transferred to Madras in spite of his several instructions from 1949 onwards. The plaintiff's complaint is that he was to even informed till the middle of 1958 about the transfer of the amount in the Karachi branch to Fixed Deposit and that neither the pass book and cheque book, nor the receipts for the subsequent fixed Deposits were given to him. The further complaint of the plaintiff is that though the first defendant took a letter from him on 20-6-1958 undertaking to get the transfer of the moneys from the Karachi branch immediately, it wilfully neglected to perform its duty and did not even intimate to him about the availability of the aforesaid moneys at Karachi on 19-5-1959 till it sent the letter on 4-7-1959. The main case of the plaintiff is that in 1955 the first defendant agreed to give an overdraft for his business to the extent of Rs. 2,50,000 on 2611-1956 on the security of the existing and future stock-in-trade of hides and skins and machinery, and that in breach of the said agreements the first defendant capriciously dishonoured cheques drawn by the plaintiff towards the end of 1957 and early in 1958. The plaintiff's case is that on account of the said acts his customers filed suits and obtained attachments before judgment and he was finally adjudicated insolvent in I. P. No. 28 of 1959. Though the plaintiff originally claimed seventy five lakhs of rupees as damages for the loss suffered by him in his business, position, credit and reputation, he subsequently amended the plaint by confining his claim for damages to rupees twelve lakhs for his reputation credit and social position above.

(3.) THE first defendant has traversed every one of the allegations in the plaint and its case is that it did not act as the agent of the plaintiff in respect of the amount transferred to the Karachi branch of the bank, that it merely obliged the plaintiff to open a current account was converted into a fixed deposit account only at the request of the plaintiff. Madras branch was made only in June 1958 and that there wee difficulties in obtaining such transfer of the amount. The first defendant's case is that after the end of 1955 the plaintiff was allowed overdraft facility to the extent of Rs. 3,50,000 solely on the security of stocks held by the plaintiff in madras and Vaniyambadi, that on 29-12-1955 security of immovable properties by deposit of title deeds was given by the plaintiff only in order to persuade the Bank to refrain from taking action for the recovery of the overdraft amount on account of the income-tax enquiry, that on 26-11-1956 the overdraft facility was reduced to Rupees 2,50,000 as admitted by the plaintiff in his letters and that the cheques were dishonoured as the plaintiff exceeded denied that the insolvency or loss sustained by the plaintiff was due to any wrongful act on its part. The first defendant therefore repudiated the claim for damages and claimed that the suit should be dismissed with compensatory costs.