UNITED BANK OF INDIA LTD Vs. MUHAMMAD SHAMSUDDIN

JUDGEMENT

(1.) Defendant No. 4 is the appellant. The appeal arises out of a suit for recovery of Rs. 19025/-with interest thereon, which was brought by the plaintiff on the allegations that he was induced by false representations made by two employees of the appellant bank to part with that money in pursuance of a contract to enter into partnership with defendant No. 1, who was carrying on business in yarns and was a customer of the appellant bank. His further case was that on the 14th April, 1948 defendant No. 3, who was the Accountant of the Bank, Game to the cycle shop owned by the plaintiff in the company of defendant No. 1 and represented to him (plaintiff) that defendant No. 1 was an honest man and he had a overdraft account with the Bank to the tune of rupees one lac in connection with his yarn business and that it would be profitable for the plaintiff to enter into partnership with him in that business and further, that the money and goods already deposited and to be deposited afterwards in defendant No. 1's account with the Bank would be operated upon, only on the joint signatures of the plaintiff and defendant No. 1. On these assurances, which the plaintiff believed to be true, he parted with Rs. 500/- that day by way of cheque drawn in favour of defendant No. 1, at the instance of defendant No. 3, the accountant. On the next day, the plaintiff with two of his friends went to the Bank and there found defendant No. 1 in the room where defendant No. 3, the accountant, was sitting. There, on the dictation given by defendant No. 3, three agreements of partnership were written and they were signed by both the plaintiff and defendant No, 1. One copy was made over to the plaintiff, another to defendant No. 1 and the third was given to defendant No. 8. The case of the plaintiff originally was that the writing of the agreements was done on the table on which defendant No. 2, the Manager of the Bank used to sit and also in his presence- This was obviously done to bring in both defendant No. 2 and defendant No. 3 associated with the representations made to the plaintiff. On the same day, that is, 15-4-1948, when the agreements were written in the Bank room, a letter was given, by defendant No. 1 containing instructions that his account in the Bank standing in the name of Bihar Industrial Mills will be operated by both the plaintiff and defendant No. 1 jointly from that day. This letter was left with defendants 2 and 3. On the following day, that is, 16-41948, the plaintiff sent a letter, a carbon copy of which has been marked as Exhibit 3 in the case, to the Bank giving notice about the joint operation of the account of defendant No. 1 and holding out threat therein that the Bank would be liable if any withdrawal of goods or money in respect of that account was allowed on the defendant No. 1's ' signature alone. The plaintiff's case further was that he Came to know, later on, that all the goods and money had been allowed to be withdrawn by defendant No. 1 by the Bank, through the collusion and connivance of defendants 2 and 3. Finding himself in a helpless condition, the plaintiff instituted a criminal case against all the three defendants, but that ended in conviction of the defendants 1 and 3 and at the first instance, the criminal case against defendant No. 2 ended in his discharge and later, on the second occasion, by his acquittal. Thereafter the present suit was instituted for recovery of the money.

(2.) Two written statements were filed, one by defendant No. 2 and the other by the Bank, defendant No. 4, both denying the liability. The trial court framed several issues of which three were important, for the purpose of this appeal. They were issue Nos, 5, 6 and 9: "5. Did the defendants Nos. 2 and 3 enter into a conspiracy with the defendant No. 1 and they by false representations induced the plaintiff to inter into partnership with defendant No. 1 as alleged. If so, what was the legal effect thereof and how far are the respective defendants liable for the same? 6. Did the plaintiff and defendant No. 1 giVe instruction to defendants Nos. 2 and 4 that the goods of the Bihar Industrial Mills would be withdrawn from defendant No. 4 and the account of the same with defendant No. 4 would be operated by and on the joint signatures of the plaintiff and defendant No. 1? If so, what will be its legal effect? 9. Is the suit false and vexatious in so far as it is against defendant No. 4?

(3.) The learned Additional Subordinate Judge of Patna decreed the plaintiff's suit against the defendants 1, 3 and 4. It was dismissed against defendant No-2, on findings that there was no fault of defendant No. 2 if he allowed the goods and money to be withdrawn on the signature ot defendant No. 1 alone and that defendant No. 2 was kept entirely in dark about the agreement filed between the plaintiff and defendant No. 1, he was also kept in dark about the application, regarding the joint signatures, received by the accountant, defendant No. 3, from defendant No. l as well and he was also kept in dark about the application received from the plaintiff or the specimen signatures taken from the plaintiff and defendant No. 1. On these clear findings, defendant No. 2 was exempted from the liability. About defendant Nos. 1 and 3, it was found that defendant No. 1, in collusion with defendant No. 3, dishonestly and fraudulently withdrew all the money and goods deposited in the defendant bank, causing loss of Rs. 19025/-to the plaintiff and gain to himself (defendant No. 1) and the accountant (defendant No. 3). The trial court also held that the representations made by defendant No. 3 to the effect that defendant No. 1 was honest and that the partnership business would be profitable to the plaintiff and that the goods and money deposited in the name of Bihar Industrial Mills would be drawn only on the joint signatures of both, the plaintiff and defendant No. 1, were false, fraudulent and dishonest and taking advantage of his position as accountant and his familiarity and intimacy with the plaintiff and the confidence reposed by the plaintiff in him, the defendant No. 3, the accountant, in conspiracy with defendant No. 1 succeeded in inducing the plaintiff to enter into partnership by means of false, dishonest and fraudulent representations, but for which, the plaintiff would not have agreed to enter into partnership with defendant No. 1 and parted with his money to the tune of Rs. 19025/-.