1. Facts of the case are as follows : On May 24, 1944 Baishnab Charan Bagudai, opposite party No. 1, opened with the Balasore Branch of Purl Bank Ltd. an Overdraft Current Account (Account No. 351). He had a small timber business and as it did not flourish, in May 1945 he closed the business and left Balasore Town. By that time he overdrew the account to the tune of Rs. 1402/9/6. He did not operate the account either by way of withdrawal or deposit for a period of about 1 year 10 months until January 11, 1947. Thereafter he made several deposits tilt July, 1946, (sic) the total amount deposited being Rs. 2164/7/-.
On April 24, 1947 the Bank went into liquidation the official Liquidator submitted to the High Court a list of debtors under section 45D(2) of the Banking Companies Act, 1949 (as amended by the Act 52 of 1953) -- hereinafter to be stated as the Act. Notices under section 45-D (3) of the Act were served on Baishnab Charan Baguda and Rajani Ballay Bhattacharya who was subsequently added as a party by the Court's order dated February 26, 1960. The Official Liquidator claimed a sum of Rs. 13,209/13/6 with interest upto March 31, 1954. Under Rule 2 framed under section 45-D (2) as given in the Fourth Schedule appended to the Act, the Official Liquidator is required to give description of papers, writing and documents, if any, relating to each debt and in the schedule attached to the notice served on the opposite parties the only document referred to was the over-draft Current Account No. 351. No reference was made to Exs. A and B.
2. Baishnab Charan Bagudai (opposite party No. 1) filed written statement challenging some entries in the ledger Book of the Puri Bank Limited. Those entries are as follows:
Amount debited for purchasingtimber to R. B. Bhattcharya for B. C. Bagudai . . . .
Amount debited for purchasing 500 cft sal wood to Sri R, B. Bhattacharya as his brain is not in good order . . . .
Amount debited for purchasing 500 cft. sal wood to Sri R. B. Bhattacharya as his brain is not in good order . . . .
To cash . . . .
Specific plea was taken that R. B. Bhattacharya has no authority to draw money on the overdraft Account of Baishnab. R. B. Bhattacharya was admittedly the Manager and Secretary of the Balasore Branch and he had made those false entries in the Bank account to fasten Baishnab with a liability. He prayed that he may be declared as a creditor of the Bank for Rs. 511/13/6 and may be excluded from the list of debtors under section 45-D of the Act.
3. Rajani Ballav Bhattacharya did not file any written statement and the case proceeded ex parte against him. It is noteworthy that despite all the categorical assertions made by opposite party No. 1 denying his liability in respect of the disputed entries, the Bank did not come forward with an amendment petition taking necessary pleas that were available in a case of this type. The available pleas in such cases could have been that
(i) R. B. Bhattacharya had express authority to draw on the Over-draft Account of Baishnab;
(ii) R. B. Bhattacharya had implied authority;
(iii) though Bhattacharya had no authority, there was ratification by Baishnab either express or implied and
(iv) a plea under section 70 of the Contract Act to the effect that R. B, Bhattacharya drew the amount on the Overdraft Account of Barshnab and delivered the cash, not intending to do so gratuitously, and Baishnab enjoyed the benefit thereof and as such was bound to make compensation.
4. The learned Judge rejected the plea of ratification and express authority. He however found:
'It is clear that there was an implied authority given to Bhattacharya at least so far as the transaction 'covered by this debit entry of Rs. 2154/8/-.'
In respect of the three other disputed items the claim of the Bank was dismissed as against Baishnab on the finding that R. B. Bhattacharya had no authority either express or implied to draw that amount on behalf of Baishnab.
5. Opposite party No. 1 has filed this appeal challenging the correctness of this finding with regard to the disputed item dated 1-6-1949.
6. Section 2 of the Act is as follows :
'The provisions of this Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of, the Companies Act, 1956, and any other law for the time being in force.'
Section 45-A in Part III-A is as follows: 'The provisions of this Part and the rules made there under shall have effect notwithstanding anything inconsistent therewith contained in the 'Companies Act' 1956 or the Code of Civil Procedure, 1908 (Act V of 1908) or the Code of Criminal Procedure, 1898 (Act V of 1898) or any other law for the time being in force or any instrument having effect by virtue of any such law; but the provisions of any such law or instrument in so far as the same are not varied by, or inconsistent with, the provisions of this Part or rules made thereunder shall apply to all proceedings under this part.'
It is clear that the provisions of other laws shall apply to all proceedings under this Part unless they are inconsistent with the provisions of the Banking Companies Act. It is therefore incumbent under the rules of pleadings that the Official Liquidator should have made clear allegations of the pleas on the basis of which Baishnab is intended to be saddled with liability in respect of withdrawals effected by R. B. Bhattacharya, Mr. U.N. Rath for the Official Liquidator frankly conceded that he ought to have filed an application making necessary averments subsequent to the filing of the written statement.
The pleas of ratifications, of express or implied authority or of obligations under sections 69 and 70 of the Contract Act are questions of law intertwined with questions of facts. All the necessary facts in support of such pleads must be pleaded and as no such plea was taken the Bank is precluded from advancing any contention on the basis of such pleas. Rule 2, in the Fourth schedule under section 45-D (2) enjoins that certain particulars must be furnished. No provisions either in the Act or in the Rules prescribe that the aforesaid pleas on which the plaintiff seeks to rely for a decree are not to be averred. On this principle alone the Bank is precluded from raising any plea regarding existence of implied authority.
7. That apart a plea of implied authority is not available in the facts and circumstances of this case. Mr. U. N. Rath concedes that excepting the statement of Bhattacharya there is no other evidence of implied authority at the time R-s. 2154/8/- was withdrawn, it is found in the judgment under appeal that Bhattacharya had no relationship with Bagudai and he never received any remuneration for rendering the alleged services in connection with the timber business of Baishnab. According to the evidence of Bhattacharya (P.W. 2) he had written authority from Bagudai which was in the custody of Bhattacharya that authority has not been produced and no satisfactory explanation had been furnished as to its non-production. The specific case of the Bank and Bhattacharya at the stage of evidence was one of express authority, and on failure of proof of such a case, implied authority cannot necessarily be inferred. Implied authority would arise from the course of conduct transpiring prior to the date of withdrawal. Admittedly there is no evidence that Bhattacharya was connected with the business of Bagudai prior to 1-6-1945. Therefore there is no course of conduct from which inference of implied authority is to be deduced.
The position would be made clear by reference to the provisions of sections 137 and 188 of the Contract Act. Section 187 says that an authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written or the ordinary course of dealing, may be accounted circumstances of the case. That exactly is the reason why Bhattacharya resorted to the plea of express authority and not to one of implied authority even in his evidence. Under section 188 of the Contract Act even an admitted agent has no implied authority in all circumstances and restrictions have been imposed as to extent of agent's authority.
An agent has to do every lawful thing which is necessary in order to do such act. An agent having authority to carry on a business has authority to do every lawful thing necessary for the purpose or usually done in the course of conducting such business. There is absolutely no evidence and it is not the cose of Bhattacharya that he was an agent and the question that ha had implied authority to do something necessary for the purpose or usually done in the course of conducting such business does not arise. It is difficult to accept the plea of implied authority.
8. Reliance has been placed on two documents Exs. A and B. Ex. A is a current Account Debit Voucher dated 1-6-1945 showing debit of Rs. 2154/8/- in the account of Bagudai. This voucher was signed by Bhattacharya both as Secretary as well as party. In Ex. A there is a reference to a list attached to that voucher. Ex. B is the receipt without any date attached to Ex. A showing particulars of goods alleged to have been delivered to one Ram Chandra Das and Santanidhi Das described as Head Workers of Bagudai. Exs. A and B do not find any reference in the Ledger Account of the Bank. Admittedly Bagudai did no: withdraw the money and Bhattacharya obtained no receipt showing payments of that money to Bagudai. Ex. A is a self-serving statement of Bhattacharya. It is Inadmissible in evidence for the purpose of creation of liability as against Bagudai and does not come within the exceptions of section 21 of the Evidence Act.
So far as the Bank is concerned it is the representation of Bhattacharya that he had authority from Bagudai, Bhattacharya was both the Manager and Secretary of the Bank and so it was easy for him to create such an entry and withdraw the amount. Moreover Ex. B has not been properly proved. Bhattacharya frankly admits that he cannot say as to who has written the English portion showing purchase of timbers from the persons mentioned therein. Rama Chandra Das, Santanidhi Das and Ramakanto Sahu have not been examined. Exs. A and B are the creation of R. B. Bhattacharya and no part of the statements made in Exs. A and B has been proved by reliable, independent and corroborative evidence so as to establish that the facts thereunder are true.
The intrinsic evidence of Ex. B is no better. The recital of the .Oriya portion is merely to the effect that the timbers are kept in the godown of Bagudai. There, is no recital that they were to be appropriated by Bagudai. From the mere fact that sometime in 1944 Bagudai had a business transaction with one Ramakanto Sahu, no necessary presumption can be drawn in the absence of proof that in 1945 Bagudai purchased 246 cft. of Sal wood for Rs. 300/- as per item No. 6 through Bhattacharya, Exts, A and B were not referred to either in the ledger or in the schedule supplied by the Official Liquidator which was attached to the notice under section 45-D (3). It Is difficult to fasten liability on Bagudai on the basis of the self-serving statements of Bhattacharya who himself withdrew the money from the Bank wherein he worked as a Manager and Secretary.
9. Some reliance has been placed on the fact that in between 11-1-1947 and 16-7-1947 Bagudai went on depositing amounts to the tune of Rs. 2164/7/- which is urged to be inconsistent with the position that he only withdrew Rs. 1402/9/8 by the date of the closure of his business. This circumstance is wholly innocuous. Depositing in excess does not go against the case of opposite party No. 1. It is always open to a depositor to deposit any amount which will lie to his credit after deduction of the dues outstanding against him. The further circumstance that though he claims to be declared as a creditor of the Bank to the tune of Rs. 511/13/6 he never made an application to that effect is also not much of significance.
Under Section 43 of the Act, in any proceeding for the winding up a Banking Company, every depositor of the Banking Company shall be deemed to have files his claim for the amount shown in the books of the Banking Company as standing to his credit and, notwithstanding anything to the contrary contained in section 474 of the Companies Act, 1956, the High Court shall presume such claims to have been proved, unless the Official Liquidator shows that there is reason for doubting its correctness, On the admitted case of both parties that the amount of Rs. 2164/7/- was deposited by Bagudai, he shall be deemed to have fifed his claim for the amount and the High Court shall presume such claim to have been proved and Bagudai was to take no steps at all for the purpose.
10. It is next contended that Bagudai has not produced his cheque book, pass book, and account book of the business. In his evidence he stated that these documents have been burnt by fire. Mr. Justice Barman rightly held that the theory of burning by fire has not been established and the explanation for non-production is not satisfactory. But on the ground Bank's case cannot be said to have been established.
The onus is entirely on the Bank to prove that Rule 8 Bhattacharya withdrew the money on the implied authority of Bagudai. Non-production of the documents would certainly result in drawing adverse inference against Bagudai. But the non-production cannot substitute the proof of the matter or the discharge of the onus. There is absolutely no evidence in support of the theory of implied authority and the drawing up of an adverse inference cannot be stretched to the extent of holding that the Bank has established its case. The drawing up of adverse inference would only be a piece of circumstance in the assessment of the entire evidence. Non-production of the cheque book Is wholly immaterial as admittedly no money was withdrawn by cheque by Bagudai. The Bank could have well established that the withdrawal of money by R. B. Bhattacharya on behalf of Bagudai was intimated in due course to the latter.
On the contrary it is admitted that the Bank never issued such information and it was Bhattacharya who personally intimated Bagudai. There is no evidence to sup-port the statement of Bhattacharya that he intimated Bagudai. We are faced with the situation that the cass is one of oath against oath and the party on whom the onus lies must fail in the absence of proof. Bhattacharya seems to have abused his position as the Manager and Secretary of the Bank and misappropriated the entire money in the name of Bagudai.
11. It is to be noted that in the judgment under appeal the three other disputed claims were rejected on the ground that Bhattacharya had no express or Implied authority. That finding itself supports the case of Bagudai. On these findings it is established that there is no course of conduct from which implied authority is to be inferred. On the other hand the course of conduct to be inferred has been restricted only to one item which is the subject of dispute itself. We are satisfied that the Bank has signally failed to prove that Bhattacharya had authority to withdraw the amount on Bagudai's account. Bagudai is not liable for that amount, As no appeal has been filed by the Bank against Bhattacharya, we are not called upon to pass a decree against Bhattactarya in favour of the Bank in respect of this item.
12. In the result, Bank's claim for the amount under appeal is dismissed. The appeal is allowed with costs throughout against respondent No. 1.
13. I agree.