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Benares Bank Ltd. Vs. Prem and Co. and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1937All255
AppellantBenares Bank Ltd.
RespondentPrem and Co. and ors.
Excerpt:
.....below cannot be effectively challenged before me. sheelwanti gave evidence and deposed on oath that these shares had been handed over to her husband merely for safe custody and that he had no authority of any kind to pledge them or deposit them or deal with them in any way. i therefore have to consider whether or not these shares could be validly deposited as security with the bank by the husband when they had been handed over to the latter merely for safe custody. a entrusts b with negotiable instruments endorsed in blank. the sale is good. a custodian of goods for safe custody is a bailee of the goods and is not an agent of the true owner for the purposes of dealing with the goods. in the illustration to this section the person receiving the negotiable instruments endorsed in..........respondent in this appeal. the plaintiff bank brought a suit against messrs. prem & co., prem nath bhargava and mt. sheelwanti, the wife of prem nath bhargava, claiming a sum of rs. 2,745-6-3. the plaintiff bank also claimed that certain securities which had been lodged with them by prem nath bhargava were liable to be sold in satisfaction of their claim. the learned munsif decreed the claim against defendants 1 and 2 with costs but dismissed the claim as against mt. sheelwanti, defendant 3, with costs. on appeal the learned civil judge upheld the findings of the munsif and dismissed the appeal. against that decision, in so far as it concerns mt. sheelwanti, the plaintiff bank have appealed in second appeal to this court. the facts of the case can be briefly stated as follows:.....
Judgment:

Harries, J.

1. This is a plaintiff's appeal against a decree of the lower appellate Court confirming a decree of the Court of first instance dismissing the claim as against defendant 3, the contesting respondent in this appeal. The plaintiff bank brought a suit against Messrs. Prem & Co., Prem Nath Bhargava and Mt. Sheelwanti, the wife of Prem Nath Bhargava, claiming a sum of Rs. 2,745-6-3. The plaintiff bank also claimed that certain securities which had been lodged with them by Prem Nath Bhargava were liable to be sold in satisfaction of their claim. The learned Munsif decreed the claim against defendants 1 and 2 with costs but dismissed the claim as against Mt. Sheelwanti, defendant 3, with costs. On appeal the learned Civil Judge upheld the findings of the Munsif and dismissed the appeal. Against that decision, in so far as it concerns Mt. Sheelwanti, the plaintiff bank have appealed in second appeal to this Court. The facts of the case can be briefly stated as follows: Prem Nath Bhargava, defendant 2, was a customer of the plaintiff bank and had a current account thereat. On 25th April 1928 this current account was transferred to the name of Messrs. Prem & Co., defendant 1. Prem Nath Bhargava represented to the bank that he and his wife Mt. Sheelwanti were the proprietors of this firm and requested the bank to allow him to overdraw to the extent of Rs. 5,000. By way of security Prem Nath Bhargava deposited with the plaintiff bank a number of shares including 50 shares of the Central Bank of India owned by his wife Mt. Sheelwanti. Eventually the plaintiff bank brought these proceedings to recover the amount due on the overdraft, viz., Rs. 2,745-6-3, and also to enforce their charge on these shares.

2. It was contended in the Courts below that Mt. Sheelwanti was an actual partner or one of the proprietors of the firm Prem & Co., but both the Courts have held that she had no interest in the firm. There was ample evidence to support that finding and such is not challenged here before me. It was also contended that the shares in the Central Bank of India were not in fact the property of Mt. Sheelwanti and that she was merely a benamidar for her husband Prem Nath Bhargava. This plea was not raised in the plaint and the learned s Munsif refused to entertain it. The learned Judge also refused to consider this point and having regard to the fact that it was never pleaded, the decisions of the two Courts below cannot be effectively challenged before me. In any event it would have been extremely difficult for the plaintiff bank to have proved affirmatively that these shares were in fact the property of the husband Prem Nath Bhargava.

3. It was also contended that the shares were actually transferred by Mt. Sheelwanti to her husband or in any event that they were deposited by Prem Nath Bhargava with the consent of his wife and therefore that these shares could be sold to discharge the debt due from Prem Nath Bhargava. This issue was hotly contested in the lower Courts and it has been argued strenuously before me that in the circumstances of this case Mt. Sheelwanti had handed over these shares to her husband in order that they should be deposited by way of security to secure his overdraft. The share certificates had attached to them a transfer signed in blank by Mt. Sheelwanti and this would suggest that Mt. Sheelwanti handed these shares over to her husband in order that her husband might make use of them to secure his overdraft. On the other hand it must be remembered that Mt. Sheelwanti is a lady of no business experience and is in fact a pardanashin woman. In those circumstances the transaction must be examined carefully because it would be an easy matter for her husband to obtain these shares fraudulently from his wife and make use of them for his own purposes. Mt. Sheelwanti gave evidence and deposed on oath that these shares had been handed over to her husband merely for safe custody and that he had no authority of any kind to pledge them or deposit them or deal with them in any way. The Courts below have considered her evidence and have accepted it. I therefore have to consider whether or not these shares could be validly deposited as security with the bank by the husband when they had been handed over to the latter merely for safe custody. The appellant bank have relied upon Section 237, Contract Act. That section reads as follows:

When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations if he has by his words or conduct induced such third persona to believe that such acts and obligations were within the scope of he agent's authority.

4. Illustration B to this section reads as follows:

A entrusts B with negotiable instruments endorsed in blank. B sells them to C in violation of private orders from A. The sale is good.

5. It is contended that the present case falls entirely within Illus. B to Section 237, Contract Act, but in my view this section has no application unless the person handing over the negotiable instruments is a principal and the person who receives them is an agent. The section in terms speaks of the person dealing with third persons as the agent of the principal sought to be made liable. There was no relationship of principal and agent existing between the husband and Mt. Sheelwanti. A custodian of goods for safe custody is a bailee of the goods and is not an agent of the true owner for the purposes of dealing with the goods. In the present case upon the facts found Pram Nath Bhargava was in no sense an agent of his wife and there, lore Section 237, Contract Act, cannot assist the plaintiff bank. In the illustration to this section the person receiving the negotiable instruments endorsed in blank is of course an agent of the person who hands them to him. Unless the relationship of principal and agent is proved to exist between the parties, Section 237 can have no application. As there was no such relationship in this case the husband had no right whatsoever to deal with these shares and the bank could obtain no title whatsoever to them. For these reasons the Courts below were eight in dismissing the claim as against Mt. Sheelwanti.

6. The appellant bank have also argued that a sum of Rs. 223 has been wrongly allowed to defendant 3 in the total costs given to her. It appears that during the course of the proceedings the appellant bank desired to examine certain brokers on commission and a commission was issued to examine these brokers at Calcutta. The main purpose of this examination was to establish that certain other shares had been sold on behalf of the bank at ruling market prices. It is to be observed that the shares claimed by defendant 3 had never been sold and therefore this commission was not primarily concerned with the case against defendant 3. The plaintiff bank, however, did draft certain interrogatories which obviously tended to establish their case against defendant 3 and that being so the latter was in my opinion entitled to be represented on this commission and to cross-examine the witnesses. She was therefore entitled to some costs in respect of this commission. She instructed a senior Counsel from Agra who proceeded on a number of occasions to Calcutta and she claimed a sum of Rs. 291-3-0 in respect of the costs incurred. Eventually a sum of Rs. 223 was allowed to defendant 3 in respect of these costs.

7. In my judgment the amount allowed to the defendant is excessive in this case. There was no need for her to instruct Counsel from Agra and thus incur heavy travelling expenses back and fore from Agra to Calcutta. If she had instructed local counsel the costs would have been considerably lower. In my view having regard to all the circumstances of the case a sum of Rs. 100 is sufficient for the costs incurred by Mt. Sheelwanti in connexion with this commission. In the result, therefore, the appeal of the appellant bank succeeds to this extent and this extent only: that a sum of Rs. 100 is granted as costs of the commission to defendant 3 instead of Rs. 223 given to her by the decree. In all other respects the decree of the lower appellate Court is affirmed. The appellant bank must pay the respondent 3/4ths of her costs in this Court. Leave to appeal is refused.


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