Raghunath Prasad and Others vs The Bank of Bengal (Patna Branch)

Adami, J.—This appeal arises out of a suit in which the Bank of Bengal sought to recover from the defendants the sum of Rs. 16,927-14-0 and interest amounting to Rs. 1,214-3-7, on the foot of an agreement executed by defendant No. 1 on the 23rd May, 1910, and a bond executed by him and other defendants on the same date.

The defendant No. 1 Raghunath Prasad, was appointed Khajanehi, or cashier, of the Patna Branch of the Back of Bengal at Bankipore on the 15fch February, 1910, in succession to his brother Thakur Prasad, agreeing to give security to the extent of fifty thousand rupees for the due snd faithful performance of the duties of his office. Accordingly, on the 23rd May, 1910, Raghunath and the Bank signed an agreement, under the terms of which the Bank was to retain as security Government Promissory Notes to the value of Rs. 20,000 belonging to Raghunath and his family, while the remaining sum of Rs. 30,000 was to be secured by the mortgage of a certain village and a dwelling-house, to be executed by Raghunath, his grand-mother, Binda Koer, his mother, Chanda Koer, and his brother Debi Prasad.

It was agreed and declared that the duties, liabilities and responsibilites devolving upon the Khajanehi, as such Khajanehi, should be such as either by custom or contract would devolve upon a Khajanehi in the employ of the Back including the duties, liabilities, and responsibilities hereinafter mentioned; namely, among others, that it should be the duty of the Khajanehi to appoint a sufficient staff for carrying on the business of the Cash Department of the Branch Bank and that the Khajanehi should be responsible for the omissions of any person so appointed by him, and that the Khajanehi shall be responsible to the Bank for the safe custody of all Bullion-cash, securities and other property belonging to, or deposited with the said Branch of the Bank, and shall be liable for any loss occasioned to the Bank by reason of the receipt of bad or base coin or money, or any forged or fraudulently altered Government Currency Note, or by reason of payment of any money or delivery of any securities for money or property or effects being made to wrong persons whether owing to forgery, mistake, fraud or otherwise.

On the same date Mt. Binda Koer, Mt Chanda Koer, Raghunath Prasad and Debi Prasad executed a mortgage of certain lands and a dwelling house, in which, according to the recitals, they were interested as members of a joint Hindu family, and of which at that time, Mt. Binda Koer was in possession as security, to the extent of Rs. 30,000, for the due and faithful observance, performance and discharge by Raghunath of his duties as Khajanehi in accordance with the terms of his agreement of the same date. They agreed that, in the event of the Bank suffering loss or damage in any way through Raghunath, the Bank should realise the security by selling the mortgaged property, and if the mortgaged property failed to realise the full amount which the Bank had lost through Raghunath, the Bank should be at liberty to sell and dispose of the other properties of the mortgagors to make up the deficiency.

The plaintiff''s case was that on the 30th October, 1916, it was discovered that fifty notes of Rs. 100 each were missing from the slock in the safe in the Bank, and on the 1st November it was found that the Bank''s balance of whole rupees was short by Rs. 10,000. Subsequently, between the 12th March, 1917, and the 24th May, 1917, during the process of handing over the cash balance to a new Khajanehi, a large number of counterfeit coins amounting in all to Rs. 1,927140 were found in the various chests in which the Bank''s coin was kept. The plaintiffs claimed that, under the terms of the agreement and the mortgage of the 23rd May, 1910, the defendants were liable to make good the above amounts.

The trial Court has held that the defendants are liable to make good the loss of Rs. 15,000 in notes and coin and Rs. 1,399 in respect of counterfeit coins, but without interest, and has directed that on failure of the defendants to deposit the said amount within the time fixed by it, the Promissory Notes and so much of the mortgaged properties as is necessary shall be sold, and that, if a sufficient amount be not realised by the sale of the Promissory Notes, and the mortgaged properties, the plaintiffs shall be entitled to realise the balance from the persons and other properties of the defendants.

The defendants have appealed, and there is a cross-appeal by the Bank of Bengal with regard to the disallowance by the Subordinate Judge of Us. 529 on account of counterfeit coin, and of interest on the total sum claimed.

* * * * * * 8. The last point urged by the learned Counsel for the appellants is that the defendants Nos. 3 and 4 were not bound by the mortgage bond and that this bond was not validly proved.

In the bond Binda Koer, the grandmother, Mt. Chanda Koer, mother of Raghunath, Debi Prasad, his brother, and Raghnnach are described as a joint family, and as such, interested in the village to be mortgaged, which at that time was in possession of Mt. Binda Koer. It is argued that this description was wrong and that the family could not be considered as a joint family. The property was in possession of the grandmother, and Mt. Chanda Koer, her daughter, had married into another family. Mt. Chanda''s sons could not be held to be joint with Mt. Binda Koer. On Mt. Binda''s death, the property would descend to Chanda Koer. Mt. Binda alone had power to mortgage the property, the others being merely reversioners, and Mt. Binda had only a. life-interest. It was further contended that there was no legal necessity for the transfer, as it was in no way incumbent on the grandmother to maintain her grandson or stand surety for him, and that, as the alienation was not made for legal necessity, the joinder of the other executants could make no difference because if they are taken to be mortgagors, as appears on the face of the document, they alienated nothing having no right in presenti and, if they are taken to have been merely giving their consent, the alienation could not be good beyond the widow''s lifetime, for the reason that it is plainly not for legal necessity. The cases of Debi Prosad Chowdhry v. Golap Bhagat (1913) 40 Cal 721 and Rangasami Gounden v. Nachiappa Gounden (1919) 42 Mad 523 have been referred to.

It is uncertain how far the family depended on the earnings of Raghunath, and, therefore, how far it was felt necessary for the benefit of the family that his appointment should be secured by the mortgage. It does seem certain, however, that the whole body of reversioners joined in the execution of the mortgage and thus gave consent to it. Mt. Binda Koer is dead and Mt. Chanda would now seem to be in possession. Even if she had no power to grant a mortgage of the property when the deed was executed, she then made a representation to the plaintiff Bank that the family was joint and now that she has obtained possession, the transfer she executed before is valid and she cannot now impugn it. In the same way Raghunath and Debi Prasad having joined in the deed cannot now attack its validity. Were their any other reversioner in existence who was not a party to the deed it would be open to him successfully to attack it. The point is probably one, of academic interest only, for the Bank will most likely be able to recover the decretal amount from the promissory notes in its hands, without resort to the property mortgaged.

With regard to the attestation it was only necessary to prove attestation in the case of the execution of the deed by Mt Binda Koer, for the other defendants admitted execution of the deed, as is shown by the note of the Subordinate Judge on the deposition of the witness Ganesh Lai. Mt. Binda Koer did not heiself sign the deed but Djbi Prasad signed for her as her Attorney Banwari Lal, a Vakil, states that he explained the contents of the document to the lady and to Chanda Koer; he identifies his signature, but cannot remember if he saw the ladies sign. Mahabir Prasad admits his signature as attesting witness but says the ladies did not sign in his presence, but we know that Mt. Binda Koer did not sign herself. Balkishun Singh also admits his signature, but contradicts himself as regards his knowledge of Chanda Bibi''s signature. Debi Prasad says Mahabir Prasad and Grobardhan Lal attested his signature on behalf of Ms. Binda Koer. On the whole, having in view the fact that the above witnesses would be reluctant to prove attestation, I am satisfied from Debi Prasad''s evidence and the admission of signature by the other witnesses, that the signature made on behalf of Mt. Binda was duly attested.

Lastly, there is the point raised by the cross appeal as to interest. It is argued that by the usage of the business of banking, the Bank is entitled to interest on the amount found to have been taken by Raghunath, the whole business of the Bank being that of lending out money at interest. Learned Counsel admits that the grant of interest is generally in the discretion of the Court but urges that by the mercantile usage of banking, interest can be imported into a contract even if there be no stipulation therefor. We are referred to Juggomohun Ghose v. Kaisreechand (1861) 9 M.I.A. 256. Now, if this were the case of a loss incurred in an ordinary banking transaction between the Bank and a customer, there would be justification in claiming interest, but this is a claim in a suit based on an agreement between the Bank and one of its servants as to security to be given by the servant; it is outside the ordinary banking business. It is true that the Bank made a demand for interest in a letter, dated October 3rd, 1917 to Raghunath Prasad, but that does not give it the right to incorporate a condition as to interest in the original agreement.

I do not think that a case has been made out for interference with the decision of the Subordinate Judge that the claim for interest should not be granted.

Although there are certain passages in the judgment of the learned Subordinate Judge which are open to criticism and not altogether justified by the evidence, I find no good reason to disagree with any of the findings. I would, therefore, dismiss the appeal and counter-appeal with costs.

Miller C.J.

I have had an opportunity of perusing the judgment about to be delivered by my learned brother and I agree with the conclusions at which he has arrived.