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Suit No.87 of 1973, decided on 27th January, 1987.

---S.19--Acknowledgement of debt--Effect----Limitation--Where defendants had acknowledged liability to pay the requisite amount of debt, suit filed within three years from such acknowledgement, held, would be within time.

---Arts.90 a 95--Suit by Bank against its employee and customer- Limitation--Where customer of Bank in collusion with employee fraudulently withdrew sums of money from such Bank in excess of what he could lawfully withdraw, suit filed for recovery of such amount against employee would be governed by Art.90 and against customer under Art.95 of Limitation Act.

Benaras Bank v. Ram Prashad 124 I C 180 rel.

---Art.118--Issues in suit, proof of--Where evidence of plaintiff remained unchallenged on issue of fact, burden of which was on such plaintiff to prove, same, held, would be deemed to have been proved--Issue which was to be proved by defendant non-production of evidence by him would render such issue as having not been proved.

---S.4--Partners of a firm, liability of--Partner of a firm who had opened account and had executed promissory note, held, would be liable jointly with other partners--Decree against defendants, who were either partners of firm or employee of Bank with whom such partners had acted in collusion, was granted jointly and severally with specified interest from date of suit till recovery with costs.

Mansoorul Arfin for Plaintiff.

Defendants: Ex parte.

Date of hearing: 27th January, 1987.

The Plaintiff has filed this suit for recovery of Rs.1,22,348.50 against the defendants who had filed their written statements but did not produce any evidence. Today when the matter was fixed for evidence of the parties the defendants and their advocate have remained absent. The plaintiff has filed affidavit of proof of Shaikh Bashir Ahmed son of Shaikh Ismail who is present in Court. The Plaintiff has also examined Mr. Matiur Rehman, who has stated that three documents namely P-3, P-4 and P-5 were executed in his presence by the partners of defendant No.1. Briefly the facts are that the defendant No.1 had opened an account No.295 on 13-4-1968. The defendant No.4 was the Manager of the Plaintiff's Drigh Colony Branch from 9-6-1967 to 11-10-1969. On account of various irregularities and unauthorised acts and omissions, the defendant No.4 was dismissed from service from 20-5-1971. While the defendant No.4 was the Manager of the Plaintiff's Drigh Colony Branch all the defendants in collusion with each other to cause loss to the Plaintiff and to cause gain to defendants Nos.l to 3, the defendant No.4, credited unauthorised amounts in the account of Defendant No.1 from time to time commencing from 23-4-1969 to 8-1-1969. A list of such unauthorised credits is mentioned in the document Ex.P-1 which has been filed with the affidavit of proof. The defendants Nos.l to 3 had not at any time deposited any amount represented in the said list and thus they are not entitled to claim the benefit of the same. The defendant No.4 in collusion with defendants No.1 to 3 exceeded his authority by allowing excess amount to defendant No.1 causing loss to the plaintiff. The defendant. No.2 was affording the unauthorized credit to defendant No.1 in order to conceal the unauthorized overdrafts allowed by him to defendant No.1 from the superior authorities of the Plaintiff's Bank. Besides providing various unauthorised credits in the accounts of defendants No.1 to 3, the defendant No.4 in collusion with the said defendants issued Pay Order bearing No.268039, dated 15-10-1968 for Rs.2,222.90 in favour of Singer Sewing Machine Company for and on behalf of the defendants No.1 to 3, but the said defendants did not pay any amount to the plaintiff for issuance of the said Pay Order. The account of the defendants 1-3 was not debited by the defendant No.4 in respect of this amount. The defendant No.4 in collusion with the other defendants did not debit the said account in respect of the three cheques mentioned in para 6 of the plaint, total amount of which comes to Rs.22,762.90. The defendants No.1 to 3 issued cheque, dated 21-1-1971 for Rs.22,762.90 and the amount of this cheque was duly debited to the account of the said defendants. The defendant No.4 also debited the account of defendants No.1 to 3 by various unauthorised amounts, details of which have been given in the list marked as Ex.P-2. The Team for Reconstruction and Investigation of the entire accounts was constituted by the Plaintiff, which after enquiry and reconstruction found that Rs.98,997.59 were not debited in the account of the defendants 1 to 3 who acknowledged their liability and executed three documents on 21-1-1971 viz Exs.P-3, P.4 and P-5. These documents relate to fts.98,997.50 being the difference between the unauthorised credits and unauthorized debit and credit entries, the sum of Rs.22,762.90 as afore-stated and the third amount for 2,222.90 in respect of Pay Order. The defendants were called upon to pay these amounts which they have failed.

The defendants have filed their written statement. The defendants No.1 to 3 pleaded that the suit is barred by time and suffers from misjoinder of causes of action and misjoinder of parties. Collusion and unauthorised credit and debit entries allegedly made by the defendant No.4 or omissions of making such entries was denied. It was pleaded that the Pay Order for Rs.2,222.90 was issued in a lawful manner. It was further denied that any cheque was issued .on 21-1-1971 in the sum of Rs.22,762.90. It is also alleged that since 15-7-1969 the defendants have not operated upon their account with the plaintiff in any manner and the last balance communicated by the Plaintiff to defendants No.1 to 3 was Rs.2,814.27. The defendants also denied having executed Exhibits P-3, P-4 and P-5 on 21-1-1971. The defendant No.2 filed separate statement in which the pleas raised, in the written statement of defendant No.1 and 3 were reiterated. The defendant No.4 in his separate statement has challenged that the suit is not maintainable and denied that he acted in collusion with other defendants as alleged or otherwise. He had discharged his duties honestly, diligently, efficiently and in good faith in accordance with the prevailing Banking practice to promote the business of the Bank. All the adverse allegations were denied and claim was repudiated.

The following consent issues have been framed:-

(1) Whether the suit is barred by limitation

(2) Whether the suit suffers from mis-joinder of causes of action and mis-joinder of parties

(3) Whether the amount mentioned in paras 5 & 6 of the plaint was utilized by and for the purpose of defendants No.1 to 3 without debiting their account

(4) Whether the defendants No.1 to 3 issued a Cheque, dated 21-1-1971 for Rs.22,762.90 in order to cover- up the already utilized amount which was not previously debited to the account of the defendant No. 1 to 3.

(5) Whether the amounts of the defendants as mentioned in para 10 of the plaint have been wrongly debited

(6) Whether the defendants No.1 to 3 admitted by a letter, dated 21-1-1971 that unauthorized credits to tire extent of Rs.1,89,598.36 have been granted in their account

(7) Whether by another letter, dated 21-1-1971 the defendants No.1 to 3 admitted their liability to the extent of Rs.98,997.59 not reflected in the account of which amount was utilized by them

(8)Whether all those ,parties whose amounts have been wrongly credited or debited are necessary parties to the suit

(9) Whether the plaintiff should have filed only one claim against the defendant No.4 for claiming the entire loss arising out by giving unauthorised credits and debits to different parties

(10) Whether the defendant No.4 discharged his duties very honestly, efficiently and in good faith

(11) Whether the defendants acted in collusion with each other to cause loss to the plaintiff and to cause gain to any of them

(12) Whether on 20-11-1968 the amount of Rs.2,222 was debited to the accounts of defendants No.1 to 3 by the defendant No.4 and thereafter he issued the Pay Order, if so, have the plaintiff wrongly treated this amount as unauthorised while reconstructing the Books

(13) Whether the defendant No.2 is partner in defendant No.1. If not to what effect

(14) Whether there exists any privity of contract between the defendant No.2 and the plaintiff

(15) To what decree is the plaintiff entitled if any, against any of the defendants

So far as defendants No.1 and 2 are concerned the suit is within time as the plaintiff has produced and prove documents Exs.P-3, P-4 and P-5, dated 21-1-1971. By document Ex.P-5 the defendants No. 1 to 3 have acknowledged their liability to pay the amount of Rs.1,20,259.93. By Ex.P-3 the defendants No.1 to 3 have agreed to pay Rs.1,89,598.36. These documents have been produced by P.W.1 and, therefore, the suit filed on 13-1-1973 is within time.

The defendant No.4 was an employee of tile Plaintiff and it has been alleged that in collusion with the defendants No.1 to 3 he has made unauthorized entries and had allowed the defendants No.1 to 3 make illegal gain. The defendant No.4 had also committed breach of duty which he was bound to perform by maintaining properly and honestly the transactions in the Bank.

Mr. Mansoorul Arfin, learned counsel has contended that the defendant No.4 for purpose of the suit should be treated as an agent of the bank and as the claim is based upon fraud the period of limitation shall be governed by Article 90 or 95. The learned counsel has referred to Benaras Bank v. Ram Prashad 124 I.C. 180 where it was held that where the customer of a bank in collusion with a clerk employed in the bank, fraudulently withdrew sums of money from the bank in excess of what he could lawfully withdraw, and the bank instituted a suit against the customer and the employee to recover the excess amount withdrawn, the suit was governed in so far as employee's case was concerned by Article 90 and as regards the customer, the Article applicable was Article 48 or Article 95.

This authority seems to be relevant to the present situation. Considering the defendant No.4 to be an agent of the plaintiff for performing the duties assigned to him, Article 90 will apply and the suit against him is within time.

Even otherwise as the claim is based on fraud committed by defendant No.4 Article 95 may apply and the period of limitation will be computed from the date of the knowledge of fraud. Even from this point of view this suit is within time.

The burden of this issue is upon the defendants, who are not present. Nothing has been shown how the suit is bad for mis-joinder of causes of action and mis-joinder of parties.

The plaintiff has produced P.W.1 and has also filed affidavit in ex parte proof of Shaikh Bashir Ahmed. From the documents it is clear that the amounts mentioned in paras 5 and 6 were utilized by the defendants No.1 to 3. In any case even the defendants No.1 to 3 have executed letter Ex.P-3 on 21-1-1971, in which it is admitted that Rs.1,89,598.36 had been erroneously credited to their account in the past. According to P.W.1 after reconstruction of account the defendants No.1 to 3 were asked to examine it and after satisfying themselves about the correctness of the reconstruction of the account they executed P-3 on 21-1-1971 before him. My finding is, therefore, in the affirmative.

The allegation of the plaintiff is that this amount of Rs.22,762.90 is a total sum of three cheques which were paid to the defendants but no debit entry was made in the record nor these cheques are available. The plaintiff had made a debit entry of this amount on 24-3-1971. According to the plaintiff this amount was paid to the bank by a cheque but this cheque has not been produced. However, the learned counsel for the plaintiff states that this discrepancy has been explained by pronote Exhibit P-5 which was executed by defendants No.1 to 3 on 21-1-1971. the pronote amount of Rs.1,02,159.93 consists of the debit entry of Rs.79,397.03 as reflected in the list of statement of account Exhibit P-6 plus Rs.22,762.90 which was paid as stated above. This explanation has sufficiently clarified that the credit was due to non-production of the cheque which was alleged to have been deposited by defendants No.1 to 3. My finding is in the affirmative."

In view of my finding on issue No.4 these amounts as mentioned in para 10 of the plaint have wrongly been withdrawn. My finding is in the negative.

The plaintiffs have produced Ex.P-3. This is a letter writer by defendants No-1 to 3. -P.W.1 has stated that it was executed in, his presence. No evidence to the contrary has been produced. M 'y finding is in the affirmative.

The document P-4, which is a letter, dated 21-1-1971 from the defendants No-1 to 3 has been produced and proved by P.W.1. As there is no evidence to the contrary my finding is that defendants No-1 to 3 have admitted their liability by this letter.

The defendants are not present to press this issue. Not pressed.

The present suit filed against defendant No.4 is in respect of the account standing in the name of defendants No.1 to 3. The defendant No.4 is not present to press this issue. It is, therefore, answered in the negative.

No evidence has been produced by defendant No.4 and, therefore, it is answered in the negative.

The evidence of the plaintiff has remained unchallenged. From the statement of account and the documents produced by the defendants, it is established that the defendants acted in collusion with each to cause loss to the Plaintiff. My finding is in the affirmative.'

The debit entry, dated 20-11-1968 for Rs.2,222.90 on reconstruction was found to be unauthorised and has, therefore, been deleted from the statement of account of defendants No.1 to 3. Therefore, the reconstruction of the account is proper.

The burden of this issue is upon defendants No.1 and 2. They have not produced any proof. On the contrary the plaintiffs have produced documents and also examined P.W.1 who has stated that the defendants No.2 & 3 are partners and they have executed a promissory note as partners of defendant No.1. My finding is in the affirmative.

As the defendant No.2 is a partner of defendant No.1, had opened the account and had also executed the promissory note, he is liable jointly with other defendants.

The plaintiff is entitled to a decree for Rs.1,22,348.50 against the defendants jointly and severally with interest @ 10% per annum from the date of the suit till recovery and costs.

A.A./N-28/K Suit decreed.

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