FORD MACDONALD AND COMPANY LIMITED Vs. PURAN MAL

JUDGEMENT

(1.) This was a suit brought by a firm, Messrs. Ford, MacDonald & Co., Ltd., against their former agent, Puran Mal, and another man, Badri Prasad, who is not before us. The plaintiff company is now a limited liability company. It was formerly a firm of considerable standing and carried on an extensive business, a large portion of which was devoted to the making and selling of bricks. While it remained in its original form as a firm and for some two years after the formation of the limited company, the present appellant, who was sued by the plaintiff company, was their agent to manage the Saharanpur branch and others. There were, in addition to the agencies committed to his charge, other agencies, Badri Prasad being the agent for the Agra branch, which included a sub-agency at Muttra. The defendant Puran Mal worked for this firm for very many years, and it is not unimportant, having regard to the charges now made against him, to bear in mind that he was given, according to the evidence in the case, a pretty free hand, and apparently during a long period of service gave satisfaction. We mention that fact because we think that, amidst the difficulties of ascertaining the exact truth with regard to each item in the books, perhaps sufficient importance has not been given to the fact that Puran Mal was left very much with a free hand, the result of that policy being, not of course to entitle a man to rob his principal, but on the other hand, necessarily to result in a somewhat less exact and precise method of recording his transactions. Mr. Parry, who was at the material time a principal of the firm or director of the company, and who is now Municipal Engineer at Cawnpore, gave evidence in the case and said that Puran Mal left the employment of the firm in December, 1913, by mutual consent, largely on account of the firm having discovered at some prior date Puran Mal s connection with, if not proprietorship of, a brick-making business in Bindraban which is some six or seven miles from Muttra and which could hardly fail in some respects to be adverse to the interests of his employers who were largely concerned in the brick-making| business. What he said was: We were annoyed with Puran Mal on his working a brick-kiln at another place, probably at Bindraban, and so we dispensed with his services. We did not dismiss him. The work at Delhi agency was completed or nearly so and we could not find work for Puran Mal at another agency. That was also one of the reasons of his services being dispensed with.

(2.) When Puran Mal left, the accounts up to that date between his principals and himself were necessarily considerable and the course of business had covered a considerable period. At that date a settlement took place between Puran Mal himself and an accredited representative of the firm. It was not drawn up in any formal document, but an entry was made in the ledger, which we have seen stating that the accounts have been checked and the cash balance in hand is ascertained and found correct. The charge was made over on that date with stock and Rs. 9-8-9 in cash, some of which was noted to consist of bad coins. These entries in the ledger were signed by Puran Mal on his own behalf and Mr. Lansbury on behalf of the plaintiff firm. Inasmuch as no other interview took place at which any suggested settlement was attempted, we are satisfied that this was, as it has been called, a settlement of accounts stated between the parties finally settling their respective claims up to that date, with the exception of a private account or bonus account in the form of commission which Puran Mal had against his employers. With respect to this latter transaction Puran Mal was eventually driven to bring a suit in the year 1914 and he claimed in that suit Rs. 40,000 and the claim was compromised at a sum of Rs. 20,000. It is not without bearing upon the general aspects of the case, that although the plaintiffs counsel was justified in saying that the plaintiffs were not bound to bring a cross claim or a cross suit to assert the claim that they are now making, nonetheless they refrained from doing so. Subsequently a person of the name of Manphul appeared upon the scene as a kind of expert or private detective and entered the employment of the firm after having been unsuccessfully prosecuted by them through Puran Mal. And it is largely the result of his industry that the plaintiff company, the leading members of which had been replaced by some other persons who had taken an interest in the company, filed this suit, claiming against the two defendants, the present appellant and his co-defendant, Badri Prasad, (a) to re-open the settled accounts and (b) an account of profits which Puran Mal had been making in a separate brick-making business of his own at Bindraban, which Mr. Parry has mentioned as the cause of the determination of his agency. The first court dismissed the plaintiffs claim with a certain amount of contempt. On appeal the lower appellate court has decreed against both defendants, the re-opening of their accounts with the plaintiffs firm obviously leading to a very serious and elaborate inquiry, and also an account as against Puran Mal of the brick-making business at Bindraban. The question we have to decide is whether those decisions or either of them is right.

(3.) The judgment of the learned District Judge has been defended by the plaintiffs counsel, Mr. Bradley, who argued his case with ability and gave us every assistance in the investigation of this troublesome matter. As we have stated, the claim consisted of two perfectly distinct causes of action. The first cause of action was sought to be established by six specific items which have been dealt with by the lower appellate court, being instances of cases in which it is alleged that it can now be shown that Puran Mal, to put the matter plainly, robbed his employers. In five of those instances the learned Judge has held that clear cases of fraud have been established. With regard to the sixth, he has come to the conclusion that an error of very great importance is shown.