Probodh Kumar Mitra vs Hindusthan Commercial Bank Ltd.

Salil K. Roy Chowdhury, J.—This suit has been filed by the Plaintiff, a share-dealer and stock-broker originally against Hindusthan Commercial Bank Ltd., hereinafter referred to as the Defendant bank and one R.N. Ghosh alias K.K. Ghosh for the recovery of loss and damages suffered due to delivery of stolen shares to the Plaintiff.

The relevant facts are these:

The Plaintiff, a stock-broker, who was carrying on business under the name and style of ''Shree Kissen & Company'' since 1949. His father Rajani Kanta Mitra, who was an employee in the Security Department, of the then Imperial Bank of India, looked after the business of his son, the Plaintiff, after his retirement in or about 1950. In course of the business of the Plaintiff his father through his close friend one Khagendra Nath Banerjee alleged to have entered into contracts for purchase of a large number of shares, from the Defendant No. 2, R.N. Ghosh. It is alleged that the Plaintiff or his father never had any direct, contact with R.N. Ghosh, but negotiations took place through K. N. Banerjee as a sub-broker, who was an employee of National Soap Company, a school-mate and lifelong friend of the Plaintiff''s father. It is also alleged that, as it was agreed that all the deliveries of shares sold by R.N. Ghosh would be made through a scheduled bank, the Plaintiff''s father was satisfied as to the bona fide of the said transactions. Thereafter, the Plaintiff issued several contracts in favour of R.N. Ghosh in respect of various shares purchased from him by the Plaintiff''s firm from time to time and handed over the said contracts to the sub-broker Khagendra Nath Banerjee., The said contract notes are exhibits in this suit. Thereafter, between May 15, 1951, and June 7, 1951, various bills made out by the Defendant No. 1, Hindusthan Commercial Bank Ltd., from its Bhowanipur branch together with the relative shares scrips and blank transfer deeds were delivered to the Plaintiff and payments were received by the Defendant bank. The said bills described the Defendant No. 1 as a creditor to the. Plaintiff and also it was written that the said bills were made in the account of R.N. Ghosh. Thereafter, it was discovered that the said shares together with other shares were lost from the custody of the United Bank of India, Russa Road branch, during the year 1950-51 at which R.N. Ghosh was employed as a clerk. It is an admitted fact that criminal proceeding was started against R.N. Ghosh and others in respect of theft of the said shares together with other shares and ultimately on April 15, 1954, R.N. Ghosh was convicted. In the meantime, United Bank of India gave notice to the Calcutta Stock Exchange and also sent circulars to all bankers in Calcutta informing that various shares described in a list attached thereto were lost from their custody and put on guard all persons dealing with the said shares. The Plaintiff also came to know from the notice board of the Calcutta Stock Exchange about the stolen shares and, as the said shares were immediately resold by the Plaintiff- in the market to various brokers in the Stock Exchange hall and all such deliveries became bad, the Plaintiff refunded the prices of the shares to the respective buyers. Some shares were seized from the Plaintiff''s custody and the other shares were seized from the custody of his ultimate buyers.

On May 7, 1954, the Plaintiff instituted this suit against the Defendant No. 1, Hindusthan Commercial Bank Ltd., and the Defendant No. 2, R.N. Ghosh alias R.K. Ghosh. It is alleged that the Plaintiff has not been able to serve the Defendant No. 2 and as such the suit is now only against the Hindusthan Commercial Bank Ltd. The Plaintiff''s case in the plaint, so far as the Defendant No. 1 Hindusthan Commercial- Bank Ltd. is concerned, is, in substance, that by presentation of the bills in respect of various shares together with the relative share certificates and blank transfer deeds between May 15, 1951, and June 7, 1951, the Defendant bank induced and requested the Plaintiff to pay off and take, delivery of the said shares thereby representing to the Plaintiff and expressly and/or impliedly warranted that the said shares were good for delivery and the Plaintiff would enjoy quiet possession of the said shares and the Defendant No. 2 R.N. Ghosh had lawful right or title to the said shares. The Plaintiff acted on such representations and made payments in respect thereof to the Defendant No. 1, but subsequently it transpired that the said shares were stolen shares and the Plaintiff had to refund a total sum of Rs. 68,500-10-0 to the various buyers of the said stolen shares. The Plaintiff claimed the said sum paid as prices of the said shares from the Defendant bank alleging tortious, illegal, wrongful and fraudulent acts on the part of the Defendant bank and R.N. Ghosh whereby the Plaintiff had been deprived of the quiet possession and enjoyment of the said shares. It is to be noted that in the plaint the Plaintiff has made a claim against the Defendants jointly or severally'' in para. 22 of the plaint and the decree asked for relief against both the Defendants in prayer (b) of the plaint. The Defendant bank denied the allegations in the plaint and the main contention of the Defendant bank is that they acted as a mere banker and relationship between R.N. Ghosh and the Defendant bank was that of a banker and customer, i.e. principal and agent, and as there was no privity of contract between the Plaintiff and the Defendant bank, there cannot be any liability or obligation to pay for any wrongful act of the Defendant No. 2, R.N. Ghosh. The Defendant bank denied any knowledge that the shares were stolen shares and that R.N. Ghosh had no title to those shares.

On the pleadings following issues were settled:

(1) Was there an agreement between the Plaintiff and the second Defendant as alleged in paras. 2 and 3 of the plaint?

(2) (a) Did the first Defendant act in the alleged transactions as the bankers and agents of the second Defendant as alleged in the written statement ?

(b) Did the first Defendant so act. in the belief that the shares delivered by the first Defendant to the Plaintiff were truly owned by the second Defendant as alleged in the written statement ?

(3) Was there any warranty or representation, express or implied, on the part of the first Defendant as alleged in para. 7 of the plaint ?

(4) (a) Were the said shares stolen shares ?

(b) Did the second Defendant have no lawful right or title to the said shares or no right to sell the same, as alleged in paras. 8, 10 and 18 of the plaint ?

(c) Did the Defendant No. 1 represent to the Plaintiff that he would have or enjoy quiet possession of the shares or has the Plaintiff been prevented from having or enjoying quiet possession of the shares because of any wrongful act or conduct of the Defendant No. 1 as pleaded in para. 12 of the plaint ?

(5) Did the first Defendant transfer or purport to transfer any right to or title in the said shares to the Plaintiff or dealt with the said shares as alleged in paras. 10 and 18 of the plaint ?

(6) Did the first Defendant obtain payment of moneys from the Plaintiff on the basis of condition as alleged in paras. 12, 13, 14, 15 and 16 of the plaint ?

(7) Was there any express or implied agreement between the Plaintiff-and the first Defendant as alleged in para. 17 of the plaint ?

(8) Was there any wrongful or fraudulent or illegal or tortious action jointly or otherwise as between the Defendants causing the alleged loss and damage to the Plaintiff as alleged in para. 20 of the plaint ?

(9) Did the Plaintiff ratify or acquiesce in all the acts of the first Defendant in respect of the transactions in suit as alleged in para. 8 of the written statement ?

(10) What loss and damage, if any, has the Plaintiff suffered ?

(11) To what reliefs, if any, is the Plaintiff entitled ?

The question to be decided in this suit seems to me whether the suit which is now against the Defendant bank alone can be maintained in the absence of the Defendant No. 2 and also the questions whether the Defendant bank has any liability in law when it acted as a banker and agent of the Defendant No. 2 and delivered shares made over to them by the Defendant No. 2 for delivery to the Plaintiff and realise the sale proceeds: by presentation of their bills; Further, whether in the facts of this case any reliefs, could be granted to the Plaintiff.

The Plaintiff''s father Rajan Ranta Mitra, who seems to be the only person dealing with the Plaintiff''s business and in control of its management and affairs during the relevant period, gave evidence. After considering his evidence together with the proved documents in this suit, at first, it appeared to mc to be an utterly careless act on the pari of the Plaintiff not to make any enquiry when such a large number of shares were involved and unusual transaction in shares was to be entered into with an unknown person through an inexperienced sub-broker who is admittedly a close friend of the Plaintiff''s father and not knowing the real source of the shares or at least enquiring about it in the initial stage. The said K. N. Banerjee, who was not a regular sub-broker but only caused two transactions to be made, both of them now appears to be connected with, his employer Kanailal Datta and his family members who were controlling the National Soap Company It also appeared to me to be very unusual that K. N. Banerjee had not charged any brokerage on the purchase of the said shares but he was alleged to have been paid brokerage after the said shares were sold in the share market. It is also quite clear from the evidence of Mr. Basak that the said R. N-Ghosh, who was a security clerk at Russa Road branch of the then Comilla Union Bank in 1950-51, which subsequently amalgamated with three other banks and became known as United Bank of India Ltd., was also associated with the National Soap Company''s Director Kanailal Datta and his son-in-law Harimohan Seal. The said Harimohati Seal had also association and transactions with the Hindusthan Commercial Bank Ltd. at its Bhowanipur branch and the Defendant bank and it also appears that he was well-known to the agent of Comilla Union Bank in 1950-51 and had transactions and overdraft against shares in both the said banks. The Plaintiff''s father stated that he came to know that the said shares were stolen from the copy of letter of S. N. Sen & Company together with the list which was hung up in the notice board of the Calcutta Stock Exchange. He accepted then and there that the said shares were stolen and refunded the prices of the said shares to the respective buyers in the Stock Exchange as and when they claimed refund for bad deliveries. He has proved books of account of the Plaintiff''s firm showing purchase of the said shares from R.N. Ghosh and refund of the prices to the respective buyers of the Stock Exchange. But what struck me, at first, as very strange behaviour on the part of the Plaintiff''s father that he did not dispute or had any doubt about the fact that the said shares were stolen and started refunding the prices of the same immediately. Further, it appeared to me, at first, very strange that he did not react as an ordinary prudent man would react in similar circumstances and make an enquiry from the Hindusthan Commercial Bank Ltd. through whom the said shares were delivered along with relative bills.

One Manindra Gopal Basak, who was called on behalf of the Plaintiff, was an agent at the relevant period at the Russa Road branch of the Comilla Union Bank ; he stated that he himself together with the -accountant and security clerk Rain Kinkar Ghosh (who was no one else but the said R.K. Ghosh alias R.N. Ghosh) were in control and custody of the securities kept in the said branch of the Corailla Union Bank during 1950-51. It also appeared from his evidence that there was gross negligence on the part of Mr. Basak as an agent and the accountant, whereby the said R.N. Ghosh alias R.K. Ghosh was given the opportunity to remove a large number of shares from the custody of the Comilla Union Bank at the Russa Road branch. It may be either with active connivance of the witness Basak or due to the gross negligence amounting to culpable negligence of Mr. Basak, the agent, the said shares were stolen. Be that as it may, it is now proved that the said shares were lost from the lawful custody of the United Bank of India Ltd., Russa Road branch, and R.N. Ghosh alias R.K. Ghosh was convicted. It is to be noted that Mr. Basak together with the sub-agents of the Defendant bank at its Bhowanipur branch and others were charged with the crime of theft and misappropriation of the said shares, but R.N. Ghosh alias R.K. Ghosh only was convicted and others were discharged at various stages of the criminal proceeding. The Plaintiff''s father Rajani Kanta Mitra was also threatened with arrest at the initial stage, but he avoided arrest as he prima facie satisfied the investigating officers with the bills and. other documents showing bona fide transactions of the said shares without any knowledge about the said crime.

On behalf of the Defendant bank one Karali Charan Mukherjee, the then head clerk-cum-accountant of the Defendant bank at the Bhowanipur branch gave, evidence and from his evidence it is quite dear to me that the sub-agent and the accountant of the Defendant bank at its Bhowanipur branch opened and allowed operation of an account by R.N. Ghosh alias R.K. Ghosh at the intervention of Hiralal Seal, the son-in-law of Kanailal Datta of the National Soap Company, in such a manner which ordinarily should have given rise to grave suspicion as to the bona fide, honesty and integrity of R.N. Ghosh alias R.K. Ghosh. Mr. Mukherjee tried to impress on me that the account was an ordinary account which started as a current account at its inception on May 4, 1951, opened with a cash deposit of Rs. 501 and immediately thereafter it became an overdraft account against the pledge of Government Promissory Notes and marketable shares. It also appeared from the evidence of Mr. Mukherjee and also from Ex. VV, a copy of the plaint filed by the Defendant bank against the United Bank of India Ltd. and others in Alipore Court being Suit No. 47 of 1960 in the First Sub-Judge''s Court, Alipore, that there were arrangements for overdraft to be granted to R.N. Ghosh alias R.K. Ghosh. It is strange that although R.K. Ghosh was orally introduced by. Harimohan Seal to the Defendant bank at its Bhowanipur branch where the said Harimohan Seal had a huge overdraft account which had been over-drawn and called up-by the Defendant bank in 1946 after the crash in the stock market and lying in debit, since then Harimohan Seal was gradually liquidating ; the formal introduction in the account opening form appears to be by a petty stationery shop-owner situated by the side of the bank and it did not appear to be unusual to the sub-agent or the accountant of the Defendant bank at that time for Harimohan Seal not formally introducing R.N. Ghosh to the bank. It is also a strange feature of the account that large sums of money were withdrawn by bearer cheques drawn practically on the same day when sale proceeds of shares or Government Promissory Notes were deposited or on the next day and sometime before the clearing of the deposited cheques. Over and above, it appears from Ex. 5 which is a certified copy of the account of R.N. Ghosh with the Defendant bank that the said account was opened and operated solely for the purpose of realising the sale proceeds of shares through the bank, i.e. immediate withdrawal of the amounts as soon as the same were deposited in the said account. I cannot believe, and it is impossible for any one to believe, that K.C. Mukherjee or the sub-agent of the Defendant bank had no ground of suspicion about the genuineness or bona fide of the account and operation by R.N. Ghosh of the said account. According to the evidence of Mr. Mukherjee, R.N. Ghosh gave a false address in the account opening form as he could not be traced after Police seized various documents from the possession of the Defendant bank sometime on June 9, 1951. From the evidence of Mr. Mukherjee and from the account of R.N. Ghosh and also from the instruction letters alleged to have been given by R.N. Ghosh and the account opening form, it is clearly indicated that the said account was very unusual, irregular and should have given rise to suspicion in the mind of an ordinary prudent man, more so in the case of trained accountant, sub-agent of experienced bankers like Hindusthan Commercial Bank Ltd. It is impossible for me to believe that the Defendant bank had no doubt about the lack of title or dubious nature of the transaction by R.N. Ghosh. It does give rise to a situation from which it can be safely inferred that the bank was grossly negligent so far as the opening, maintaining and allowing operation of the account of R.N. Ghosh alias R.K. Ghosh was concerned without sufficient enquiry or scrutiny. They miserably failed in their ordinary duty as a banker in the discharge of their duties in the facts and circumstances of this case.

Now, the question is whether the Defendant bank owed any duty to take care in its relation with the Plaintiff.

Mr. S. Tebriwalla, appearing on behalf of the Defendant bank, contended that the bank acted bona fide and, according to the instructions of their constituent and customer R.N. Ghosh, delivered various shares to various share-brokers and collected the sale proceeds of the said shares and credited the account of R.N. Ghosh with the Defendant bank.. The said instructions were both oral and written giving the quantity of the shares and the name of ''the companies and price at which they were sold. In the instruction letters no distinctive numbers were given. After receiving instructions the Defendant bank made out the bills in their name in the account of R.N. Ghosh and delivered the shares together with the blank transfer deeds and the Defendant bank''s bill and collected the sale proceeds from the Plaintiff. He further contended that the bank was not concerned or interested to know as to wherefrom and how the said R.N. Ghosh obtained the shares as they were mere collecting agents and bankers who were simply carrying out the instructions of their said constituent. The bank was not the seller of the said shares but was merely an agent of the seller. As such, the bank could not have any liability even if the said shares were subsequently found to be stolen and the said R.N. Ghosh had no title thereto. He had cited the following cases: Maneckji Pestonji Bharucha and Anr. v. Wadilal Sarabhai and Company AIR 1926 P.C. 38, R.L. Khanna Vs. The Simla Banking and Industrial Co. Ltd., , In Re: Continental Bank of Asia Ltd. 53 C.W.N. 649, Lester v. Balfour Williamson Merchant Shippers Ltd. (1953) 1 All E.R. 1146, Transvaal and Delaboa Bay Investment Company Ltd. v. Atkinson and Wife (1914) I All E.R. 599, Mahammad Sultan Mohideen Ahmed Anseri Vs. Amthul Jalal, and Kesharichand Jaisukhal Vs. The Shillong Banking Corporation, and several other cases for the proposition that a banker is not a party in the transaction between the customer and his buyer but merely acting as an agent and banker and cannot be held liable for the wrongful acts or lack of title in the customer in this case being the said R.N. Ghosh.

Mr. Tebriwalla also contended that as the Defendant. No. 2 R.N. Ghosh is not a party to this suit and the plaint as originally framed should be read deleting the paragraphs which contained the cause of action against the Defendant No. 2 R.N. Ghosh and reading R.N. Ghosh in those paragraphs where cause of action against both the Defendants were pleaded. He invited me to read the plaint so amended and to hold there was no cause of action against the Defendant bank. He cited several decisions as to meaning and scope of the cause of action in relation to the provisions of Order 2, Rule 2 of the CPC and right to sue in Article 120 of the. old Indian Limitation Act. The said decisions are Musst. Chand Kour and Anr. v. Pratab Singh and Ors. 15 I.A. 156, Musst. Bolo v. Kohlan and Ors. 57 I.A. 325, AIR 1949 78 (Privy Council) , Sher Ali Mridha Vs. Torap Ali and Others, , In Re: D. Lakshminarayana Chettiar and Another, , Sugden v. Sugden (1957) 1 All E.R. 300, Jaharlal Pagalia Vs. Union of India (UOI), and Mst. Rukhmabai Vs. Lala Laxminarayan and Others, . Further, he contended that in the absence of the Defendant No. 2, R.N. Ghosh, before the Court, the Plaintiff has no cause of action against the Defendant and the suit is not maintainable.

I need not discuss the said decisions cited by Mr. Tebriwalla in detail as there is no dispute as to the definition or meaning and'' scope of the words ''cause of action'' and they are well-settled. But the whole question for me to decide is whether in the facts of the case, as pleaded and proved before me in this suit, there is any cause of action against the Defendant bank. Mr. Tebriwalla also referred me to the definition of ''goods'' under the Sale of Goods Act and also the definition of ''mercantile agent'' under the Sale of Goods Act and contended that in the circumstances of this case the Defendant bank is a mercantile agent and protected u/s 27 of the Sale of Goods Act. He also referred to Sections 176 and 178 of the Indian Contract Act and contended that the Defendant bank was also in the position of a pledgee of the said shares and had the right to deal with the same as a ''mercantile agent'' of R.N. Ghosh. He also submitted that pleading in paras. 2 and 3 of the plaint and the evidence tendered by the Plaintiff are wholly contradictory and he referred to Q. 1205 of Rajani Kanta Mitra. He also referred to the evidence of the then accountant of the bank Mr. Mukherjee. Mr. Tebriwalla also referred to the decision of Sm. Sumitra Debi Jalan Vs. Satya Narayan Prahladka and Others, and contended that the Defendant bank was protected from any liability on the principles laid down in that decision u/s 29 of the Sale of Goods Act. Mr. Tebriwalla further contended that the Plaintiff had failed to prove the terms of the contract as he had pleaded one type of contract and tried to prove quite another at the time of trial. He referred to Mitra''s Qs. 770-775, 667, 790, 793, 794, 976 and also Qs. 40, 817, 768, 769. Mr. Tebriwalla further contended that from the bills, i.e. Exs. H series and the counterfoils of the cheques of the Plaintiff firm being Exs. K series and also from Qs. 811 and 814 of Mitra, it would appear clearly that the Plaintiff had no doubt that he was dealing with R.N. Ghosh and the bank was merely a conduit pipe for making deliveries of the shares and collecting the sale proceeds thereof in the account of R.N. Ghosh and, as such, the Defendant bank cannot be made liable for any defect in the title of the said shares caused to be delivered by R.N. Ghosh. He further referred to Article 205 of Halsbury (vol.8, 3rd ed., p. 118) and Bowstead on Agency (12th ed., p. 287). He also referred me to passages of Winfield on Tort (7th ed., pp. 5 and 7). He contended that tortious liability arises only from the breach of a duty primarily fixed by the law: this duty is towards persons generally and its breach is redressible by an action for unliquidated damages. But, if the duty is towards a .specific person or specific persons if cannot arise from tort. In the instant case, he states that there is no statute under which there is any contract between the Plaintiff and the Defendant bank and also there is no law under which the Defendant bank owes any duty to the Plaintiff. Further, he has contended that merely submitting the bill by a banker in the account of a customer to a third party does not amount to any representation to the said party about the title of the customer in the goods sold and, as such, the Defendant bank cannot be held liable. Further, Mr. Tebriwalla contends that there is no evidence that R.N. Ghosh has stolen the said shares. The Plaintiff has not produced the investigation report and has not made United. Bank of India Ltd. a party and the registered holders of the said shares are not made parties and they have not even been called as witnesses to give evidence. As such, he has submitted the theft of the said shares has not been proved. The evidence of Mr. Basak does not prove the theft and in the state of evidence it may also be possible that R.N. Ghosh had right or means to deal with the said shares, and the Defendant bank had dealt with the said shares as an agent of R.N. Ghosh in the ordinary course of its business bona fide and in good faith believing them to be produced from, the custody of the rightful owner and the Defendant bank had no ground for suspicion, and as such the bank cannot be held liable. Lastly, he has submitted the Plaintiff has not proved that they have suffered any damages at least the damage pleaded in the plaint is only for wrongful deprivation of the property but what was sought to be proved at the time of trial is that the recovery of the sums the Plaintiff has refunded to their buyers for bad deliveries. As such, there is variance between pleading and proof and no relief can be granted by way of damages as the Plaintiff has failed to prove the damages as pleaded. He further submits that the Plaintiff has made voluntary payments by way of refund accepting the said delivery of shares as bad without giving my notice or obtaining the consent of the Defendant bank. The Defendant bank, if they had any notice, might have contested the allegations that the said shares were stolen shares or, in any event, theft were not proved and R.N. Ghosh should be deemed to have valid title to the'' said shares.

Mr. Tebriwalla also cited the decision of Anil Behari Ghosh Vs. Smt. Latika Bala Dassi and Others, wherein it has been held that the judgment of Criminal Court is relevant only to show that there was such a trial resulting in the conviction and sentence of the accused, but it is not the evidence of the fact that the accused was the murderer of the testator. That question has to be decided on evidence in the application for revocation of grant of probate in that case. It is submitted that in this case the mere fact that R.N. Ghosh alias R.K. Ghosh was convicted in die criminal proceeding, cannot prove that the said shares were stolen and, as the said fact that the said shares were stolen, has not been proved by the evidence tendered on behalf of the Plaintiff in this case and, as such, the Plaintiff is not entitled to any relief. He also submitted that Mr. Basak who gave evidence on behalf of the Plaintiff in his Qs. 2 and 3 and also 231 has admitted that there were other registers arid delivery books in which entries regarding shares and securities were made by the United Bank of India Ltd. at its Russa Road branch and, as such, no reliance should be placed on the Security Register being Ex. RR in this suit in the absence of other relevant documents. Mr. Tebriwalla also contended that the decision cited by Mr. Gupta on behalf of the Plaintiff undoubtedly lays down certain propositions, but the question is whether they fit in the facts and circumstances of this case. He cited, a decision of this Court in Bhola Nath Dutta Vs. Radha Nath Biswas and Others, wherein it has been held that a judgment should be read in the light of the facts of that particular case. Having regard to the said submissions and contentions on behalf of the Defendant bank, Mr. Tebriwalla invited me to answer the issues raised in this suit in his favour.

Mr. Dipankar Gupta, appearing on behalf of the Plaintiff, contended that the suit was on the basis of tortious liability and both the original Defendants were joint tort-feasors and they are jointly or severally liable to the Plaintiff and the Plaintiff is entitled to proceed against any one of them and his claim is maintainable even in the absence of the Defendant No. 2, R.N. Ghosh, and in support of his contention he referred to Mulla''s CPC (13th ed., p. 606, Item No. 10) and judgment of Mallick J. in Bengal Agricultural and Industrial Corporation Ltd. Vs. Corporation of Calcutta and Another, and, as such, he contended that the suit was maintainable against the Defendant bank alone in the absence of the original Defendant No. 2 and the allegation in the plaint should be read as ''R.N. Ghosh'' in place of the ''Defendant No. 2''. Next, he contended that the bank was not a mere conduit pipe or a carrier to perform a ministerial, duty of physical delivery of the said shares on behalf of R.N. Ghosh to the Plaintiff as it is clear from the account of the customer of the bank, i.e. R.N. Ghosh, that it was an overdraft account against pledge of Government Promissory Notes and Securities, and the said R.N. Ghosh handed over the contract notes in respect of sale of shares and the bank retained the said contract notes and made entries of securities in the -Security Register of the Defendant bank. He referred to Mukherjee''s Qs. 466-473, 486-500 and 506-525. He also referred to para. 3 of the written statement of the Defendant bank in this suit and paras. 4, 6 and 11 of the Alipore suit being Ex. VV and Qs. 601-606 and 612-623 of Mukherjee and submitted that it was an admitted position that the said account was an overdraft account of R.N. Ghosh against pledge of securities being Government Promissory Notes and Joint Stock Company''s shares together with blank transfer deeds. He also referred to the instruction letters from R.N. Ghosh for delivery of the said shares being Ex. 7 and Exs. 9-13 in this suit which only indicate that contract notes were enclosed but no shares were sent along with the letters. He also rightly pointed out that it was a significant act on the part of the Defendant bank that although R.N. Ghosh gave instructions for delivery of 200 B.I.C. shares the Defendant bank only delivered 100 shares because there was something wrong with the blank transfer deeds (Mukherjee''s Qs. 538-546, 550-553) and contended that if the bank was merely a delivery agent or a conduit pipe there was no scope for scrutiny of blank transfer deeds. He further contended that the bills made out by the Defendant bank in the account of R.N. Ghosh and submitted to the Plaintiff as debtor do not indicate the source from which the bank obtained the shares although it was clear that the said shares were being delivered on account of R.N. Ghosh (Mukherjee''s Qs. 565-583).

He, therefore, contended that by presentation of the said bills being Exs. H series to the Plaintiff by the Defendant bank the Plaintiff was invited to take delivery of various shares against payment. Although the bank acted as the agent, according to him, it is clear that the bank took upon itself the responsibility of giving delivery under the contract of sale entered into between the Plaintiff and R.N. Ghosh. The Defendant bank did not purport to act as mere carriers of the said shares from R.N. Ghosh to the Plaintiff. The ownership in the said shares together with blank transfer deeds was intended to be transferred by the bank in favour of the Plaintiff in the ordinary course of its banking business.

He then submitted that the fact that the said shares were being stolen shares need not be strictly proved by the Plaintiff. All that is necessary is to show that neither the Defendant bank nor R.N. Ghosh had any authority to deal with the shares and the Plaintiff has been deprived of quiet possession of the said shares after payment for the price of the same-to the Defendant bank. He further submitted that the fact that the said shares were stolen had not been disputed and, in fact, admitted by the Defendant bank in their written statements as will appear from the paras 5-11 of the written statement. Further, the Defendant bank in their plaint of the Alipore suit has admitted the position that the shares were missing from the custody of the United Bank of India Ltd. and were the subject-matter of criminal proceedings against R.N. Ghosh and others. He also submitted that, apart from the pleadings, Mr. Mukherjee of the Defendant bank has admitted in his Qs. 703-705 that the said shares were stolen and it is too late for the Defendant bank to dispute the fact of shares being stolen in the argument stage or to contend that R.N. Ghosh had authority to deal with the said shares cannot arise. He further submitted relying on the decisions in Ram Ranjan Chakrabarti v. Ram Narain Singh and Ors. ILR 22 Cal. 533 (542), Hem Chandra Bhaduri and Others Vs. Purna Chandra Sarkar and Others, and Krishna Nath Chakrabarti v. Mohomed Wafiz 21 C.W.N. 93 (95) that the fact of conviction of R.N. Ghosh in the criminal proceedings against him for theft of the said shares is a strong prima facie evidence that the said shares were stolen. He further contended that the evidence of Sukumar Datta and Manindralal Basak clearly indicated that the said shares were lost from the lawful custody of the United Bank of India Ltd., Russa Road branch, by wrongful and criminal acts of R.N. Ghosh, the security clerk of the United Bank of India Ltd. at. its Russa Road branch, during the -relevant period. He also contended that by mere suggesting that R.N. Ghosh had the authority to deal with the said shares is not enough far less being any proof in a Court of law. Suggestion cannot be substitute for proof, if the. Defendant bank wanted to prove the said fact, it was open for them to produce evidence to that effect and in the absence of such evidence the Court should hold that R.N. Ghosh had no authority to deal with the said shares and, as such, sale of the said shares were without'' title, invalid and void. Thereafter, Mr. Gupta argued that the Plaintiff has suffered damages by way of loss of the said shares which were seized by'' the Police and the Plaintiff had to refund the price of the said shares to his buyers on account of bad deliveries as the said shares were lost from the custody of the United Bank of India Ltd. It is also the Defendant bank''s evidence that the Defendant bank from its head office repaid the prices of other shares to different brokers which were declared to be bad on the same ground and debited the account of R.N. Ghosh. He contended that Sections 2(9), 27 and 29 of the Indian Sale of Goods Act have No. application in the fact of this case as the Defendant bank cannot be a ''mercantile agent'' within the meaning of the said Act. They were mere pledgees. Section 29, Sale of Goods Act, does not apply as the said section contemplates the case of a seller who has obtained possession of the goods under a voidable contract u/s 19 or 19A of the Indian Contract Act, but the contract has not been rescinded at the time of sale. As it is nobody''s case that R.N. Ghosh obtained the shares under a voidable contract from the United Bank of India Ltd., Section 29 of the Sale of Goods Act has no application in the facts of this case. Mr. Gupta contended that there was no title which R.N. Ghosh and the Defendant bank could transfer to the Plaintiff and under the circumstances he contended the question of protection under the said sections of the Sale of Goods Act did not arise. He further contends that if an agent deals with goods in which the principal has no title then the agent is liable in conversion. Normally, the true owner is the person who suffers damages, but where a third party, such as the Plaintiff in this case, suffers damages as a result of the act of conversion, then he is the person who is injured and can bring the action for damages. He referred to the decisions reported in 17 Q.B.D. 705: (1892) 1 Q.B. 495 and passages of Clerk and Lindsell on Tort (13th ed., para. 1136), Bowstead on Agency (13th ed., p. 431) and Halsbury (vol.1, 3rd. cd., pp. 233-35). He has further contended that negligence as a tort is defined in Clerk and Lindsell on Tort (13th ed., para. 854). It is the infliction of damage as a result of a breach of duty of care owed by the Defendant to the Plaintiff. Two questions arise. Firstly, whether there is a duty situation and, secondly, whether the duty is owed by the Defendant bank to the Plaintiff. He has specifically referred me to the passages of Clerk and Lindsell (13th cd., paras. 856, 857, 858 and 863) and submitted that Courts have never laid down any limit to duty situation where the duty to take care may arise. It has been generally put by Lord Atkins in Donoghue v. Stevenson (1932) A.C. 562 that--

you must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour and a neighbour is a person who is so closely and directly affected by his act that he ought reasonably to have him in contemplation as being so affected when he was directing his mind to the acts or omissions which are called in question.

This definition of duty to take care has been very, much extended and made wider by the latest House of Lords in the case of Hedley v. Heller (1964) A.C. 465 : (1963) 2 All E.R. 575 and he submitted that applying the principle to the facts of this case it should be held that the Defendant bank had a duty to take care and has made themselves liable to the Plaintiff for bad deliveries of the said shares and bound to compensate the Plaintiff by refund of the price of the shares which has been paid by the Plaintiff to the Defendant against the invalid sale. Mr. Gupta next contended that the Defendant was also liable on an implied warranty and indemnity as pleaded in para. 17 of the plaint. On this aspect he has cited several decisions, the leading authority being Dubgale v. Lovering L.R. 10 C.P. 196 approved by the House of Lords in Lord Mayor v. Barklay (1905) A.C. 392 (397). The proposition has been put in the following terms:

It is a general principle of law that when an act is done by one person at the request of another which act is not in itself manifestly tortious to the knowledge of the person doing it, and such act turns out to be injurious to the rights of a third party, the person doing it, is entitled to an indemnity from him who requested that it should be done.

The said decision has been subsequently followed in Attorney-General v. Odell (1906) 2 Ch. 47 and Secretary of State v. Bank of India 67 C.L.J. 456. He then submitted that in the present case the Defendant bank also invited the Plaintiff to take delivery of the said shares against their bills by payment and thereby warranted and represented that the shares were good for delivery. The Plaintiff was induced to part with their money on the basis of such representations as evidenced by the said bills being Exs. H series in this suit. There has been a clear breach of the warranty of title as a result whereof the Defendant bank should indemnify the Plaintiff for loss of the shares by paying the values thereof which has been received by the Defendant bank, fie further submitted that there was another aspect of the matter as it may be considered that the Defendant bank offered the shares to the Plaintiff and upon payment of the price offered to transfer the property in the said shares to the Plaintiff. No doubt the bank acted as an agent, but in the facts and circumstances of this case there is a clear warranty on the part of the agent that he is authorised by the true owner of the shares to offer the same for delivery and to receive payment; in fact, R.N. Ghosh had no authority and as such the Defendant bank is liable to indemnify the Plaintiff in respect of loss suffered by the Plaintiff. The principle, upon which the above proposition is based, was laid down in the case of Collen v. Wright (1857) 8 E. & B. 647 (657) and approved by the House of Lords in the case of Starkey v. Bank of England (1903) A.C. 114 and also Halsbury (vol. 26, 3rd ed., p. 827, Article 1532). He further submitted that the negligence on the part of the Plaintiff did not arise as it was not the case of the Plaintiff in the written statement or in any correspondence when the party had not made out in case of negligence so far as the Plaintiff was concerned, the Court cannot make a case for the parties.

In view of the above contentions Mr. Gupta submitted that he was entitled to a decree as claimed.

I am unable to accept the contentions of Mr. Tebriwalla and I accept all the contentions put forward by Mr. Dipankar Gupta on behalf of the Plaintiff.

As I have already dealt with the evidence of Rajani Kanta Mitra, the father of the Plaintiff Probodh Chandra Mitra, I need not go into the details of his evidence here but I am accepting his statements that his classmate and friend Khagen Banerjee, who is now dead, acted as an under-broker in the dealings in the said shares bought from R.N. Ghosh (Qs. 37 to 46 of Mitra). Thereafter, contract notes were issued, by the Plaintiff firm which were produced from the custody of the Defendant bank after being called upon by Mr. Gupta and those are exhibits in this suit which clearly proves the transactions with the Plaintiff firm and R.N. Ghosh in respect of the purchase of the said shares. Thereafter, the shares were delivered by the Defendant bank under their six bills being Ex. 11. Mr. Mitra has proved corresponding entries in the transaction book in respect of the said shares and payment of the same to the Defendant bank against their bills which are all admitted by the Defendant bank. Mr. Mitra has also proved the counterfoil of the cheque paid to the Defendant bank being Exs. J-l and J-2 and from K-l to K-4. I am satisfied that Mr. Rajani Kanta Mitra, a venerable old gentleman, who had thirty years'' experience in the Security Department of the Imperial Bank of India and after his retirement from the bank was looking after the business of his son carried in the name and style of ''Shree Kissen & Company'' as a share broker and he was satisfied in the circumstances as to the genuineness and regularity of the intended business through K. N. Banerjee in the purchase of the shares from R.N. Ghosh when the same was agreed to be delivered through a scheduled bank. At first, suspicion arose in my mind as to why without any scrutiny an experienced person like Mr. Mitra would agree to purchase a large number of shares from an unknown person, but carefully considering the position in which lie was placed as an ordinary share broker and with his experience in the Security Department, I think it was quite natural for him to enter into those transactions. Basak was the agent of the said branch and from the evidences, both documentary and oral, it is quite clear that Ram Kinkar Ghosh illegally and wrongfully removed the said shares from the custody of the United Bank of India Ltd., Russa Road branch, and caused the same to be delivered through the Defendant bank to the Plaintiff and the sale proceeds deposited in the overdraft account of R.N. Ghosh with the Defendant bank, and R.N. Ghosh immediately withdrew the sale proceeds by encashing bearer cheques of large amounts as would appear from Ex. 5. It is also an admitted position that the said Ram Kinkar Ghosh was convicted on charge of theft and the Defendant bank has not disputed that the said shares are stolen, but their contentions were that neither it had knowledge that the shares were stolen by R.K. Ghosh alias R.N. Ghosh nor they had any knowledge about the fact that R.K. Ghosh had no title to the said shares.

I am accepting the evidence tendered on behalf of the Plaintiff''s witnesses as prima facie proof of the facts that the said shares were stolen shares and R.N. Ghosh had no title to the said shares sold and delivered to the Plaintiff through the Defendant bank. Mr. Rajani Kanta Mitra has also proved from entries in the transaction book, contract notes and paid-up bills that the shares which were purchased from R.N. Ghosh were again sold by the Plaintiff firm in the share market and payments were received in respect of the same. It has been further proved from the Plaintiff''s transaction book and relative contracts and bills that the Plaintiff had to refund the sale proceeds of the shares which were subsequently seized by the Police as the deliveries became bad. The documentary evidence in respect of the same are un-contradicted, unchallenged and has conclusively proved that the Plaintiff has not enjoyed the quiet possession of the said shares taken delivery from the Defendant bank against payment of the relative bills. While from the evidence of Mr. Karali Gharan Mukherjee, who was employed with the Defendant bank at its Bhowanipore branch as head clerk-cum-accountant in 1945 and was working as such in the relevant period in .1951, it also appears that the account of R.N. Ghosh was opened on May 4, 1951, being'' orally introduced by Harimohan Seal and introduced in writing by Bhowanipore Paper and Stationery Stores in account opening form is Ex. 4. It is quite clear from the statement of account which is Ex. 5 that the said account in substance was an overdraft account against pledge of Government Promissory Notes and shares of Joint Stock Companies together with blank transfer deeds. It is also stated by Mr. Mukherjee that both Mr. P. N. Wadhera and Mr. H. K. Bose, sub-agents of the bank of the Bhowanipore branch during the relevant period, were also co-accused in the criminal case against R.N. Ghosh in respect of theft of the shares some of which are the subject-matter of this suit. Although they were ultimately discharged from the criminal case, but the civil liability of the Defendant bank cannot be avoided. It is also the evidence of Mr. Mukherjee that the said sub-agents were subsequently dismissed by the Defendant bank. From the evidence tendered on behalf of the Defendant bank, both documentary and oral evidence of Mr. Karali Gharan Mukherjee, it is quite clear to me that the bank was grossly negligent in opening the account of R.N. Ghosh without proper scrutiny, enquiry and investigation and accepting a large number of shares with blank transfer deeds without scrutiny with proper care and skill as is to be expected from a banker in the ordinary course of its business. I find as a fact that the Defendant bank was -grossly negligent in the facts and circumstances of this case in opening, maintaining and operating the account of R.N. Ghosh in the manner they have done in this instant case.

Now, I will discuss the law as to liability of the Defendant bank to the Plaintiff in the light of my finding of facts as above.

It is well-settled that the question of duty to take care in any particular circumstances is a question of law as it would appear from a passage of Salmond on the Law of Torts (15 th ed., p. 252):

It is not enough for the Plaintiff to establish that the Defendant has been careless: he must establish that the Defendant has been careless in breach of a specific legal duty to take care..... It is a question of law whether in any particular circumstances a duty of care exists. ''It is remarkable'', said Lord Atkin in Donoghue v. Stevenson, ''how difficult it is to find in the English authorities statements of general application defining the relations between parties that give rise to the duty. The Courts arc concerned with the actual relations which come before them in actual litigation, and it is sufficient to say whether the duty exists in those circumstances''.

After careful consideration of the respective contentions as to the liability of the-Defendant bank in respect of the shares which were delivered by them in the account of R.N. Ghosh to the Plaintiff: which were subsequently found to be stolen property and R.N. Ghosh had no title to the same. The problem seems, to me of great importance and, as such, it requires very careful consideration of the legal position of the Defendant bank in the said transactions. .

In order to appreciate the position of the Defendant bank it is to be noted that there is no express contractual obligation between the Plaintiff and the Defendant bank and also there is no statutory relationship or obligation on the part of the Defendant bank to the Plaintiff in respect of the said transactions. But the question is whether there is any implied warranty of title or of indemnity given by the Defendant bank to the Plaintiff or there is any wrongful act or negligence on the part of the Defendant bank in discharge of their duties as a banker in the facts and circumstances of the case and thereby making'' them liable to the Plaintiff for the loss suffered by them which is the price paid to the Defendant bank by the Plaintiff in the account of R.N. Ghosh in respect of the stolen shares delivered by the Defendant bank to the Plaintiff together with the Defendant bank''s bills covering the said shares.

It is an elementary proposition and practice that a banker before opening a new account should take certain precautions and must satisfy themselves by making proper enquiries from the person wishing to open the account, if such person is unknown to the banker as to his profession or trade as well as the nature of the account he proposes to open. He must be properly introduced to the banker by a responsible and respectable person of credit. The banker should also make necessary enquiries from the references furnished by the new customer which can be easily verified and judged whether or,; not the person wishing to open the account is a desirable customer. It is necessary for a banker to enquire from responsible parties given as references by the customer as to the latter''s integrity and respectability and omission. of which may result in serious consequences not only for the banker concerned but also for other bankers and the general public, particularly a scheduled banker in the year 1951 had added responsibility and duty to check and satisfy themselves about the customer particularly when the account is of the nature of an overdraft against Government. Promissory Notes and shares in Joint Stock Companies. In the ordinary course of business a transaction through a scheduled bank practically amounts to a sort of guarantee to the person dealing in any way with the customer of the said bank who can very well assume that the transaction is bona fide, genuine and regular.

To analyse the position reference may be made to verious authoritative text books on Tort and leading decisions on negligence and duty to take care, that is, duty situation. They are as follows: Winfield on Tort (8th ed., pp. 236-53), Clerk and Lindsell on Tort (13th ed., pp.856, 857, 858 and 863), Salmond on the Law of Tons (15th ed., chap. 9, pp. 249-270, 276-293 and 297-306), Hedley Byrne and Company v. Heller and Partners Ltd. (Supra) and W.B. Anderson and Sons Ltd. and Ors. v. Rhodes (Liverpool) Ltd. and Ors. (1967) 2 All E.R. 850. It will be not out of place to quote another passage from Salmond on the Law of Torts (15th ed., p. 268):

Hedley Byrne affirms and extends the principle that a duty to be careful (as distinct from a duty to be honest) may exist in situations other than those in which there is a contract between the parties. It affirms that this duty may exist where there is a fiduciary relationship. It extends that principle by suggesting that the duty extends to all relationships where the inquirer was trusting the other to exercise a reasonable degree of care, and when the other knew or ought to have known that the inquirer was relying on him. The House did not offer any exhaustive description or definition of these relationships.

The well-known principles on which an agent becomes liable lo a third party are set out in Bowstead on Agency (13th en., Articles 129, 135, 136), also in Halsbury''s Laws of England (vol.1, 3rd ed., Articles 233-35) and Halsbury''s Laws of England (vol. 26, 3rd cd., Articles 1532, 1534, 1537, 1541). I may here set out Article 135 from Bowstead on Agency (p. 427):

Article 135

Agent is personally liable for all wrongs committed by him where loss or injury is caused to any third party, or any penalty is incurred, by any wrongful act or omission of an agent while acting on behalf of the principal, the agent is personally liable therefor, whether he be acting with the authority of the principal or not, to the same extent as if he were acting on his own behalf, unless the authority of the principal justify the wrong.

Then, the principle laid down in Lord Mayor v. Barhlay (Supra) which has been cited by Mr. Gupta in support of his contention that his client is entitled to be indemnified for representation of title made by the Defendant bank as to the said shares belonging to R.K. Ghosh alias R.N. Ghosh seems to be well-established. I need not repeat the passage here again which have been quoted earlier when dealing with the argument of Mr. Gupta. In my view, the principles of that decision in Lord Mayor v. Barklay (Supra) are applicable to the facts and circumstances of this case as to the liability of the Defendant bank to the Plaintiff for delivery of shares in which their customer the said R.K. Ghosh alias R.N. Ghosh had no title. The Defendant bank, whether as a banker or as an agent, has become liable for conversion also.

Regarding the contention of Mr. Tebriwalla that the suit is not maintainable in the absence of R.K. Ghosh alias R.N. Ghosh and there is no cause of action in this suit cannot be accepted, as it is well-settled that in an action for tort the Plaintiff is entitled to sue the joint tort-feasors and both of them arc jointly and severally liable. Only restriction is that the Plaintiff if proceeds ''against one and obtains judgment he cannot sue the other. The decision of Mullick J. in the case cited by Mr. Gupta, viz.. Bengal Agricultural and Industrial Corporation Ltd. v. Corporation of Calcutta (Supra) has dealt with the point and held that the suit is maintainable against one of the joint tort-feasors. So, the present suit of the Plaintiff is maintainable against the Defendant bank only for the damages suffered by the Plaintiff as claimed in this suit.

With respect to the contention of Mr. Tebriwalla that the conviction of R.K. Ghosh alias R.N. Ghosh in respect of the charge of theft and misappropriation of the shares does not prove the fact that the shares were stolen. His .further contention was that the fact of theft of the said shares should be independently proved in this suit by the Plaintiff. I cannot agree with his contention as the fact of conviction of R.K. Ghosh alias R.K. Ghosh by the Criminal Court in respect of theft of the said shares is admitted. The said admission about which. I am satisfied clearly proves the fact that the shares were lost from the custody of the United Bank of India Ltd. and R.K. Ghosh alias R.N. Ghosh has been charged and convicted for the same. Apart from the said conviction of R.K. Ghosh alias'' R.N. Ghosh there are. sufficient evidence before me particularly the evidence of Mr. Basak to prove the fact of the loss, of the said shares from the lawful custody of the United Bank of India Ltd. from its Russa Road branch by wrongful and fraudulent act of R.K. Ghosh alias. R.N. Ghosh, the security clerk, at the'' relevant time, about which I have already discussed.,: In .my view., there is a prima facie proof before me of the fact that, the said shares were lost from the lawful custody of the United Bank of India Ltd. and the said. R.K. Ghosh alias R.N. Ghosh was the person held responsible for the said wrongful and illegal act. It was for the Defendant bank to prove that the said shares were not stolen shares as the onus was on. the Defendant bank to do so but they have utterly failed to discharge the onus, and I have no hesitation in holding that the said shares were stolen shares in. which the said R.K. Ghosh alias R.N. Ghosh had No. title and the sale of the said shares to the Plaintiff by R.N. Ghosh was invalid and void as 1 have held earlier. The principle so far as to the admissibility of the order of the Criminal Court and the burden of proof as to the facts in issue is laid down in the decision of Dinomoni v. Braja M. Chowdharani 29 I.A. 24;

The principles to be deduced from the above high authorities appear to me that when the relationship between the parties is such that one in the usual course of his business is relying on the act and conduct of the other as ordinary prudent man should be thereby the other when he is a banker of repute is bound to take care to see that the representations he is making to be true and genuine and if there is any negligence on his part to do so he would be held liable.

Applying the said principles to the facts of this case I have no hesitation but to hold that the Defendant bank failed in their elementary duty to check the references of R.N. Ghosh when, the account was opened with the initial cash sum of Rs. 501 on May 4, 1951. It is also strange that although in evidence Mr. K. C. Mukerjee stated that R.N. Ghosh was introduced by Hiralal Seal but the account opening form was signed by a petty stationery shop-owner and also it will appear from the character of the account to any man of ordinary, prudence that the same was opened solely for the purpose '' of causing deliveries of shares to be effected through the bank in the said account and encashing bearer cheques for large amounts even before the cheques for the sale proceeds for the shares were realised by the bank. The account which initially was a current account immediately thereafter became an overdraft account as large sums of money being advanced against Government Promissory Notes and shares. From the evidence of Mr. K.C. Mukherjee it is quite clear that the said account although opened as a current account became an overdraft account in substance and, in fact, K.C. Mukherjee who verified the plaint filed on behalf of the Defendant bank in the Alipore Court being Suit No. 44 of 1951 (United Commercial Bank Ltd. v. United Bank of India Lid. and Ors. ), Ex. VV, wherein he has made specific reference in para. 4 that the Defendant bank granted overdraft against security of Government Promissory Notes and marketable shares. In the facts and circumstances of this case, it is quite clear to me that the banker failed in their ordinary duty to take proper care or, as I should say as an ordinary prudent person would do, to verify and check the identity, integrity, honesty and anticedents of R.N. Ghosh while opening the account on May 4, 1951, or at least in course of the dealing in receiving Government Promissory Notes and shares from him under his letters of authority and delivering the same to various brokers covered by bills of the defendant bank. The bank should have realised that the share brokers would, receive the said bills together with the shares accompanied by blank transfer deed and pay for the same against the Defendant bank''s bills would solely rely on the representations made by the said bills of the Defendant bank and take it for granted that R.N. Ghosh had good title to the shares delivered to them and pay for the same in the ordinary course of business transaction. The transaction through scheduled bank gives a stamp of genuineness and honest transaction and public are entitled to rely on the bankers as in the present case the Plaintiff relied and paid for the bills presented by the Defendant bank in discharge of its duty as banker on behalf of the customer. The banker, as in the present case, the Defendant bank failed in their ordinary duty, owed to the general public to take proper care and satisfy themselves as to the integrity, honesty and anticedents of a customer and it must be held responsible for the loss caused to any one (here the Plaintiff) by such gross negligence and derelectibn of ordinary duties as a banker.

As I have already indicated that the whole question for decision in this suit depends as to the duty to take care on the part of the Defendant bank while opening the account of a complete stranger being R. IK. Ghosh alias R.N. Ghosh. I have already stated as to the nature and scope of the enquiry to be made by a banker in opening an account so that the banker may not be held to be liable for negligence while collecting cheques, bills or other amounts in the account of the customer. Section 131 of the Negotiable Instrument Act in India, which substantially corresponds to Section 4 of the Cheques Act, 1957 (England), deals with the liability of collecting banker and the principles of the said section are dealt with in Paget''s Law of Banking (7th ed., pp. 374-78).. Particular reference may be made to a well-known passager of Underwood''s case (1934) 1 KB 795. Scrutton L.J. said as follows:

The test of the standard of duty in which cases is stated by Lord Dunedin in Taxation Commr. v. English, Scottish and Australian Bank 1920 Appeal Case 689--"to be the ordinary practice of Bankers".... "If the Bank for fear of offending their customers will not make enquiries into unusual circumstances they must take with the benefit of not annoying their customers, the risk of liability because they do not enquire.

There is also a well-established principle that if a banker disposes of a chattel, in this particular case, the shares along with the blank transfer deeds in which the customer of the Defendant bank being R.N. Ghosh had no title so as to deprive both themselves and the true owner of the said shares of the dominion over the said shares and in exchange of them receive sale proceeds of the said shares from the Plaintiff thereby the Defendant bank constituted themselves the debtor of the customer and, as such, it became a plain case of conversion. For the said principle reference may be made to Underwood''s case mentioned earlier to the judgment of Atkin L.J. (1934) 1 K.B. 795: (1924) All E.R. (Reprint) 230 (237-8). Further, from the aspect of representation and warranty of title and indemnity, as laid down in the case of Lord Mayor v. Barklay (Supra) referred to earlier, the Defendant bank becomes liable for breach of warranty of title as by presentation of the bill to the Plaintiff there is an express representation by the Defendant bank that the said shares together with blank transfer deeds were good for delivery and R.N. Ghosh had good title thereto about which the Defendant bank in their ordinary course of business as a banker got themselves satisfied and the Plaintiff as an ordinary prudent man of business was justified in relying on the said representation and making payment for the same.

It is needless for me to point out that no title passes to a buyer of shares in Joint Stock Companies which are found to be stolen or obtained by fraud by the seller as the seller had no title to pass. Although shares are transferable by delivery together with blank transfer deeds but they are not negotiable instruments and bona fide holder of the same has no protection as in the case of negotiable instrument. That principle is laid down in the decision of Hazarimull Shohanlal v. Satish Chandra Ghosh and Anr. ILR 45 Cal. 331 which decision also lays down that the loss suffered in the case of delivery of stolen shares or shares obtained by fraud by the seller is the price which the buyer pays to the seller, of such shares without title.

Even assuming it is held that the Plaintiff was so careless in not enquiring into the source of the shares of R.N. Ghosh that it amounted to gross negligence, then the well-known principle of ''last opportunity'' is to be applied in order to ascertain whose negligence caused the damage. It is clear that the Defendant bank could have avoided the loss had it been little careful in discharge of the ordinary duly as a banker in opening the account of R.N. Ghosh and enquired into the title to the said shares of R.N. Ghosh pledged with the Defendant bank against overdraft allowed in the account. The principle of ''last opportunity'' is very clearly set out in Clerk & Lindsell on Torts (13th ed., para. 317, p. 181). So, in any event the Defendant bank is liable to the Plaintiff for the damages he has suffered due to the invalid and void sale of the said shares.

Therefore, in this case, as it is proved that'' the Plaintiff has paid the price of the shares which from the evidence I am bound to hold were lost or stolen shares from the lawful custody of the United Bank of India Ltd. from its Russa Road branch sometime in May-June 1951. As it is clear from the fact that R.N. Ghosh, the security clerk, was convicted for such theft and also from the evidence of Mr. Basak it is abundantly clear and I am satisfied that R.N. Ghosh had the opportunity to remove the shares from the custody of the United Bank when the folders containing the shares were taken out or put in the safe of the United Bank of India Ltd. and he has wrongfully removed the said shares along with other shares and dishonestly caused them to be delivered through the Defendant bank to various purchasers who were share brokers in the ordinary course of business and collected the sale proceeds through the Defendant bank.

In my view, the Defendant bank is liable to the Plaintiff, firstly, the Defendant bank was grossly negligent in the facts and circumstances of this case and they failed to take care and enquire into the identity and integrity of R.K. Ghosh alias R.N. Ghosh at the time of opening the account and also due to its failure to enquire as to the title of the shares delivered to the Plaintiff under the cover of the Defendant bank''s bill, the duty situation existed between the Plaintiff and the Defendant bank in the facts and circumstances of this case according to the well-settled principles laid down in the leading cases and authoritative text-books on the subject referred-to earlier. Secondly, the Defendant bank is liable for warranty of-title and conversion for delivering shares to the Plaintiff in which its customer, the said R.K. Ghosh alias- R.N. Ghosh, had no title. Lastly, the Defendant bank must be held liable as a ''banker and agent of its customer, the said R.K. Ghosh alias R.N. Ghosh, for conversion and the said shares were stolen shares and R.N. Ghosh had no title to the same. The Defendant bank is bound to indemnify the Plaintiff for the loss he has suffered in this case which has been duly proved before me.

Therefore, I answer the issue as follows:

Issue No. 1: Yes.

Issue No. 2 (a): Yes.

(b): The Defendant bank was grossly negligent in not enquiring as to the title of R.N. Ghosh in respect of the said shares.

Issue No. 3: Yes.

Issue No. 4 (a): Yes.

(b): R.N. Ghosh alias R.K. Ghosh had no title to the said shares as the shares were obtained by fraud and wrongful acts.

Issue No. 4 (c).: Yes.

Issue No. 5: Yes.

Issue No. 6: Yes.

Issue No. 7: Yes. .

Issue No. 8: No.

Issue No. 9: Yes.

Issue No. 10: The price paid by the Plaintiff to the Defendant bank against the shares delivered by the Defendant bank under the cover of its bills being Exs. H series.

In the result, there will be a decree for Rs. 60,231-10 P. together with interest on judgment at the rate of 6 % per annum in favour of the Plaintiff against the Defendant Hindusthan Commercial Bank Ltd. In the facts and circumstances of this case, I am not inclined to make any order for costs for the reasons that the Plaintiff was not diligent in bringing the suit to an early hearing whereby the Defendant bank could be said to have been deprived of the very valuable evidence of the sub-agent of its Bhowanipore branch, Mr. H.K. Bose. Further, for the reasons that the Plaintiff, had he been careful at the initial stage when he entered into the contracts for purchase of a large number of shares from R.N. Ghosh, a complete stranger, by making enquiries about the identity, integrity, profession and position of the seller, the unfortunate situation could have been avoided. It was not a judicious act on the part of the Plaintiff to rely solely on the fact that deliveries of the large quantity of shares were to be made through a scheduled bank.