Ramaprasada Rao, J.
1. The unsuccessful defendant-Bank in O.S. No. 4820 of 1968 on the file of the City Civil Court, Madras, is the appellant. The plaintiff had a personal account with the Canara Bank Limited, at its Madras Branch hereinafter referred to as the Bank on 6th April, 1964. The plaintiff was the representative of a reputed group of concerns in Coimbatore, popularly known as M/s. Lakshmi Mills Company, Limited, Coimbatore, and its sister concerns at Madras. The group companies had a liaison office at Madras at No. 12/2, Marshalls Road, Egmore, Madras. There was a telephone in the Madras office of the group companies, which was apparently intended for the advantage and benefit of the sister concerns and which was in the sole administrative custody of the plaintiff. In the course of his official duties, the plaintiff gave a cheque for Rs. 294-40 towards the telephone bill for the aforesaid telephone admittedly standing in the name of the said M/s. Lakshmi Mills Company Limited. This cheque was drawn on the personal account kept by the plaintiff with the defendant-bank. On 8th April, 1964 when the cheque came for clearance, the defendant did not honour the cheque, though the plaintiff had a sum of Rs. 652-83 to his credit in his account with the bank. On 24th April, 1964, the telephone department advised the plaintiff of the dishonour of the cheque. The plaintiff met the officials of the Bank on 28th April, 1964 and according to the defendant, the manager of the Madras Office of the Bank expressed regret for what all happened. It is said that the manager of the department approached the telephone department and requested them to re-present the cheque for payment. Apparently, the telephone department was not interested in such representation. As the telephone bill remained unpaid, the telephone was disconnected on 6th May, 1964. But on prompt steps taken by the plaintiff it was restored on 7th May 1964. The plaintiff tried, to explain to his employers the circumstances under which the cheque was dishonoured and how the telephone was disconnected and later restored. The plaintiff's employers, however, did not,, accept the explanation and on 15th June, 1964 the plaintiff's services were terminated. According to the plaintiff, he lost the job, which was fetching him a sum of Rs. 600 per mensem besides free boarding; and lodging and a car for his conveyance, on the sole ground that the plaintiff did not pay the telephone bill in time as a result of which the telephone was disconnected. The plaintiff says that the defendant was mainly responsible for not having honoured the cheque, when there was sufficient money to his credit and such negligence on the part of the defendant bank which was wilful resulted in himself being dismissed from the reputed group concerns of M/s. Lakshmi Mills Company Limited, Coimbatore. He would allege that but for this happening, he would have continued in the mill for a period of 10 years with better prospects and advantages and might have earned about Rs. 75,000 which had been lost once and for all. The plaintiff however, limited his claim for compensation or damages against the defendant-bank for loss of earnings for a period of five years, which he estimated at Rs. 36,000 and also claimed a sum of Rs. 14,000 for loss of prestige and status and for mental agony caused to him by losing his covetable job. As the plaintiff's notice of demand was not respected, he filed the present action in forma pauperis for recovery of Rs. 50,000 being the damages suffered by him because of the wrongful dishonour of the cheque by the Bank.
2. In the written statement the defendant admits that the plaintiff had a current account with its branch office at Thambu chetty Street, Madras, and that the plaintiff was working as the representative of Messrs. Lakshmi Mills Company Limited. They would concede that by mistake and oversight the cheque for Rs. 294-40 presented by the Telephone Department was dishonoured and that they expressed regret in person for the same and that they assured the plaintiff that they would inform the Telephone Department at Madras about the mistake and arrange for payment on re-presentation of the said cheque. They followed up the interview with the plaintiff, by phoning up the cash Department of the Madras Telephones and requested them that the cheque may be re-presented once again. They were informed that the Telephones Department would do so and hence they did not take any further steps. They also expected the plaintiff to forward another cheque to the Telephone Department with a request for the re-presentation of the same. They would allege that they have taken all possible and reasonable steps to arrange for payment of the cheque on re-presentation. According to the defendant, if the facts relating to the dishonour of the cheque was conveyed to the Managing Agents of M/s. Lakshmi Mills Company Limited, Coimbatore, and if, after all this, the Mills terminated the service without reference to the Bank, it was an arbitrary act on the part of the employers and would allege that the said termination of service and the damages claimed and said to have been suffered by the plaintiff cannot, in law and in fact, be said to flow naturally from the dishonouring of the cheque. They would deny that the plaintiff was entitled to the damages as claimed by him and would refer to certain incidents in 1963 and 1964 which would reflect upon the status of the plaintiff. In any event, they would say that the plaintiff did not take immediate steps to avert the consequence, which would flow from the dishonour of the cheque and mitigate the damages. The claim for Rs. 50,000 is excessive and unreasonable. The defendant would specifically plead that the plaintiff ought to have issued a fresh cheque on his account or utilised the other funds of his employer for paying the telephone bill and he, not having taken such steps, cannot claim the exaggerated amount of Rs. 50,000. The plaintiff filed replication and answered that the reference made by the Bank to his dealings in 1963-64 were irrelevant besides being incorrect. He would add that when the cheque issued towards the telephone bill of a reputed company was not honorured, it did react on the reputation of the company and it is only on account of the dishonour and the supervening disconnection of the telephone, that his services were terminated. The correspondence that ensued between the plaintiff and his employers will disclose how the principals were greatly upset by the dishonour of the cheque and the later disconnection of the telephone and would assert that the immediate and proximate cause for his termination of service is the wilful and negligent act of the dishonour of the cheque by the defendant-bank.
3. A supplemental written statement was also filed wherein again the defendant would reiterate their stand. On the above pleadings, the following issues were framed:
1. What is the total compensation or salary which the plaintiff was entitled to as employee by the Lakshmi Mills Limited, and sister concerns as alleged by him?
2. Whether the defendant is not liable to compensate the plaintiff for the damage or loss caused to him by the default' in honouring the plaintiff's cheque?
3. Was the dishonouring of the plaintiff's cheque wilful and negligent?
4. Was the damage claimed by the plaintiff, the natural and reasonable consequence of dishonouring the cheque by the defendant bank?
5. Was the service of the plaintiff terminated by the Lakshmi Mills Limited, and sister concerns as a result of the dishonouring of the cheque?
6. To what damages, if any, general and special is the plaintiff entitled to and
7. To what relief?
4. On issues 2 and 3, the trial Court found against the defendant. It held that the dishonouring of a cheque by a Bank if it is due to mistake cannot affect the liability of the Bank to pay damages, which would reasonably flow from their wrongful act. It also observed that the conduct of the Bank throughout reflects that they were negligent in handling the transaction and hence, would find that the dishonouring of the cheque issued by the plaintiff, in the circumstances, should be viewed to be due to indifference and wilful negligence. On issues 4 and 5, the trial Judge found that the action of Lakshmi Mills Company Limited, against the plaintiff was because of the disconnection of the telephone and such disconnection was because of the dishonour of the plaintiff's cheque Exhibit A-1 by the defendant Bank. On issues 1 and 6, the trial Court estimated the damages in all at Rs. 14,000 and decreed the suit accordingly and directed the defendant to pay Court-fee on the amount allowed and directed the plaintiff to pay the Court-fee on the sum disallowed. It is as against this, the present appeal has been filed.
5. The learned Counsel for the appellant would say that the termination of the plaintiff's services by M/s. Lakshmi Mills Company Limited, cannot solely be attributed to the dishonouring of the cheque and the later disconnection of the telephone but according to him it is due to other causes. In any event, he would say that the special damages of Rs. 10,000 granted by the Court-below and general damages of Rs. 4,000 under the head of mental agony and loss of reputation are on the high side and exaggerated. On the other hand, Mr. Challapathy Rao, learned Counsel for the respondent-plaintiff would urge that the damages were correctly reckoned by the Court below and that such damages flow from the wilful and negligent act of the-officers of the appellant Bank and that the defendant is liable to suffer the decree.
6. Before we consider the respective broad contentions, it is necessary to-summarise the relevant correspondence, which Jed to the catastrophe in this case. It is common ground that Exhibit A-1, which is the cheque drawn by the plaintiff was issued by the plaintiff at a time-when he had enough money in the Bank in his account for the same being honoured. The Bank having so indifferently dealt with its customer's account, did not even make a second verification regarding their act, but kept silent over it until the plaintiff called upon them and apprised' of the position. In fact, the plaintiff was advised about the dishonour of the cheque by the Telephone Department on or about 24th April, 1964 and he met the officers of the Bank on the same day besides writing them a letter. Even then, the Bank would take the incidents very lightly and under Exhibit A-4 they would write a formal and a casual letter to the District Manager, Telephones, Madras, stating that they had telephonic conversation with their cash department in respect of the cheque and requested the Madras Telephones to re-present the cheque for payment. This is the least that could be expected of a Banker, who has realised his mistake in dishonouring the cheque. One should have expected the Bank to have taken more concrete steps in averting further untoward consequences in the matter of the dishonoured cheque when, as Bankers they ought not to have done it. Besides writing Exhibit A-4, no further steps were taken by the Bank. It is no doubt true that one of the assistants of the Bank expressed personally regret. But between 24th April, 1964 and 6th May, 1964 when the cheque was dishonoured, the silence and the inaction of the Bank remains unexplained. When, therefore the telephone was disconnected, the plaintiff wrote Exhibit B-1, dated 6th May, 1964 wherein the plaintiff intimated to the Bank that the Telephone Department has taken further steps to disconnect the telephone. No doubt, the plaintiff took emergent steps to restore the phone on the 7th of May, 1964, which step was taken on his own and not for and on behalf of the Bank either. When the Bank was informed about the phone disconnection and about the mental agony, which by then the plaintiff was suffering since he was being taken to task by his employers for such gross dereliction of duty, the defendant-Bank would still in a light-hearted manner reply to Exhibit B-1 under Exhibit A-7 stating that they took up the matter with the Telephone Department and that the Department agreed to re-present the cheque and concluded 'in spite of this, we do not understand why this misunderstanding has been created ' Here again, there is no contrite expression of regret on the part of the Bank excepting to formally express it to the plaintiff.
7. Thereafter the concerned exhibits revolve round the correspondence which passed between the plaintiff and his employers, which resulted in his service being terminated. The plaintiff apprised his employers under Exhibit A-5, dated 7th May, 1964 in writing as to the circumstances under which the telephone was disconnected. It appears to be fairly clear that the employers by then were very much dissatisfied about the way in which the matter was handled by the plaintiff and his Bankers and Exhibit A-5 was in the nature of a letter of apology written by the plaintiff to his employers and was one in which he requested them to pardon him for the unhappy incident. Under Exhibit A-8 he was asked to go over to meet the managing agents at Coimbatore. The plaintiff could not meet the managing agents at Coimbatore and wanted time till 22nd May, 1964, as he was ill by then. This is seen from Exhibit A-9. Again he was asked by a telephonic message as is seen from Exhibit A-6 to render accounts for the matters, which he was dealing with by them and also go over to Coimbatore to meet Mr. G. K. Devarajulu Naidu, who was the Managing Director of the Mills. In reply thereto, the plaintiff gave a statement of account in respect of the moneys of the group companies which he maintained as their representative of the Madras branch. This statement of account was not fully accepted by their employers as is seen from Exhibit A-27. The employers had to pursue the matter under Exhibit A-12 and call for further accounts. It is no one's case that the employers were so tight and corrective as against the plaintiff prior to the dishonouring of the cheque and disconnection of the telephone. Exhibit A-13 and A-14 are further letters, which were exchanged between the plaintiff and his employers. In the meantime the plaintiff wanted to make a frantic but a last effort with the Bankers so that he could avert a catastrophe so far as his connections with Messrs. Lakshmi Mills Company Limited, was concerned, and wrote exhibit A-15 to the Bank. In Exhibit A-15 the plaintiff requested the Bank to write to him that there was enough money in the account in the Bank on the date when the cheque was dishonoured and that it was by oversight on the part of the Bank that the amount under the cheque was not paid and that it was because of it, the telephone was disconnected. He would also make it clear that such a letter giving the facts could convince his employers. He made it candid that if the Bank kept silent in spite of his requests, his services would be terminated for which the Bank would be held responsible. To this there was no reply and ultimately the expected event happened and under Exhibit A-16 the plaintiff's services were terminated. The plaintiff thereafter followed up the events by issuing Exhibit B-2, the Counsel's notice before suit claiming a sum of Rs. 50,000 as damages and has come to Court thereafter.
8. The plaintiff examined himself besides letting in other evidence, oral and documentary. The defendant examined the Manager of its branch office when the incident happened. The plaintiff re-iterated what all he said earlier in the correspondence. He referred to the fact that be was the liaison officer of four companies, which were very reputed establishments; they were Lakshmi Mills Company Limited; Lakshmi Machine Works Limited; Lakshmi Card clothing Manufacturing Company Private Limited, and G. Kuppuswamy Naidu and Company. His business was to attend as a liaison officer to the purchase and despatch of goods required by the concerns, to take the delivery of imported machinery from Harbour and despatching them to Coimbatore and selling motors and pumps manufactured by them. In that context he brought out before the Court that the telephone was the essential link between himself and his employers. He reiterated what all he had stated in the correspondence, but accepted that he got a part-time job under Sri Rama Vilas Mills Limited, Coimbatore at Rs. 285 per month and that job was from 1st September, 1964 to 31st December, 1966 and from 1st January, 1967 he was without any employment. In cross-examination it was brought out that the telephone connection was in the name of Lakshmi Mills Company Limited, and that the four other concerns, which were appointed with it, were sharing the expenses towards that phone. The Bank would refer to some personal discussions it had with one Rudrappa Naidu, who was undoubtedly connected with Lakshmi Mills etc. Ultimately, what is brought about in the cross-examination has merely a bearing on the. letters and the correspondence which ensued between the plaintiff and the bank....
9. Mr. Nayak, appearing for the Bank was unable to dislodge the finding of fact by the Court below that the disconnection of the telephone was due to the dishonour of the cheque and that the dishonour of the cheque was due to the negligence of the Bank. The Counsel's attempt was to sustain the attitude of the bank and urge that they have taken all steps to avoid an injury to the plaintiff. His further contention was that all necessary steps were taken by the bank so as to make out absence of negligence on their part. We are unable to agree with the learned Counsel for the appellant that the bank was bona fide in its attempts to avert negligence on its part. We have already traced briefly the correspondence which touch upon the presence or absence of negligence on the part of the bank. When the bank was apprised of the dishonour, one would expect the officials of the bank, instead of being light-hearted and chimercial in their attitude, should promptly act so as to satisfy their customer whose cheque they negligently dishonoured. Exhibit A-4 which the bank wrote does not appear to be a bona fide step taken by them in the situation. When the cheque was dishonoured, they ought to have issued a credit note or paid off cash to the Telephone Department and. advised them to treat the return of the cheque as of no consequence. But, on the other hand, a casual letter was written asking the District Manager, Telephones to re-present the cheque. Mere expression of regret is not the answer to the situation. It is expected of a bank to honour its customer's cheque if it has sufficient funds in his hards. If it fails to do so, it will be liable to damages. The reason is obvious. It injuriously affects the reputation, credit and integrity of its customer. Even Section 31 of the Negotiable Instruments Act provides that the drawee of a cheque having sufficient funds of the drawer in his hands properly applicable to the payment of such cheque must pay the cheque when duly required so to do, and in default of such payment, must compensate the drawer for any loss or damage caused by such default. The bank aggravated the situation by its inaction between 24th April, 1964 and 6th May, 1964. Even when the bank was put on notice about the disconnection of the telephone, the attitude of the bank did not change. The plaintiff in an agonising mood complained under Exhibit B-1. about the gravity of the situation. The bank would reply in a very matter of fact fashion stating that it took up the matter with the Telephone Department and has concluded by saying 'in spite of this we do not understand why this misunderstanding has been created '. Of course, they followed it up by an expression of regret. As pointed out by a Division Bench of this Court in New Central Hall v. United Commercial Bank : AIR1959Mad153 , the fact that such dishonouring took place due to a mistake of the Bank is no excuse nor can the offer of the Bank to write and apologise to the payees of such dishonoured cheques affect the liability of the bank to pay damages for their wrongful act.' The bank would plead that they had a frank discussion with Sri Rudrappan who was one of the principal representatives of the employers. Nothing prevented the Bank from taking out a subpoena to Sri Rudrappan to prove their effort at reconciliation. Here again the bank miserably failed to take any such steps.
10. On the other hand it is clear in the instant case that the dismissal of the plaintiff from the service of his employer was due to the disconnection of the telephone of the group companies which action had a definite impact on the dishonour of the cheque. It has not been brought out that the employers ever had any serious complaint against the plaintiff prior to the dishonour of the cheque. As a matter of fact, the letters exchanged between the plaintiff and his employers as summarised above by us is a pointer to the effect that it was the dishonour of the cheque and the consequential serious inconvenience caused to the employer in the matter of disconnection of the telephone-, which appears to be a commercial necessity for the well-known group companies at all times, that was mainly responsible for the ultimate dismissal of the plaintiff from service. A last minute effort was made by the plaintiff asking the bank to write to him about the real state of affairs. In Exhibit A-15 he made such a specific request and made it clear that such a letter is likely to convince his employers and such a conviction if gained is likely to avoid the catastrophe of his dismissal from service. The bank never cared to reply. We are satisfied that beyond reasonable doubt, there is sufficient nexus between the dishonour of the cheque and the consequential disconnection of the telephone with the final act of dismissal of the plaintiff from service by his employers. It is not in dispute in the instant case that the group companies in which the plaintiff was employed was a commercial group having a recognised business status and mercantile integrity. It was not also urged before us that the absence of a telephone with the liaison officer of such group companies at Madras would not matter. On the other hand, the appellant insisted that he was not negligent and that all possible efforts were made by him to ease the situation. As we said, the methodology adopted by the bank in a serious situation like this is not a satisfactory one and in a case like this we should characterise such a slow and haphazard movement of a responsible bank as negligence on its part. The causa causans of the dismissal of the plaintiff's service is therefore attributable to the conduct of the bank which we find is far from reasonable and indeed abounding in negligence.
11. The word 'compensate' used in Section 31 has special signification in the context in which it is used. The well-understood proposition in law is that damages are awardable if a sufficient nexus is established between the wrongful-act and the resultant loss to the injured. This principle laid down in Section 73 of the Contract Act is a well-known one. Under this section, the measure of compensation for any loss or damage caused in case of breach of contract is fixed as that which naturally arose in the usual course of things from such breach or which the parties knew, when they made the contract, to be likely to result from the breach of it and such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Adopting this as the standard or yard-stick by which damages have to be awarded in case where a party suffers an injury by reason of the negligence or negligent conduct of another, it is essential that the party complaining of such an injury or claiming such compensation should be in a position to connect the injury with the act of malfeasance or misfeasance or negligence on the part of the other party. Besides creating such a nexus, he should also prove that the resultant damage has flown from the event of negligence. As between a banker and a customer, statute law itself makes it mandatory that the injured customer should be compensated for the wrongful act of the banker. We have seen this in Section 31 of the Negotiable Instruments Act. But in all such cases a distinction has been made, between compensation which has to be paid to a trader and that which has to be paid to a non-trader in cases of proved injury caused at the instance of the banker. The banker's failure to honour his customer's cheques and drafts when he has moneys of the customer to meet them, is a peculiar type of breach of contract which has certain significations attached to it. As pointed out by McGregor on Damages, Thirteenth Edition, at page 917:
The important characteristic of such cases is that the plaintiff, where a trader, can recover substantial damages for injury to his credit without proof of actual damage.
The reason has been explained by the learned author with reference to decided cases thus:
The ratio decidendi in such cases is that the refusal to meet the cheque, under such circumstances, is so obviously injurious to the credit of a trader that the latter can recover, without allegation of specific damage, reasonable compensation for the injury done to his credit but this rule does not apply where the customer is not a trader in such cases substantial damages cannot be awarded without proof of actual injury to credit.
This distinction has been well brought out by many decided cases in Courts in our country. The earliest case is reported in Jogendra Math Chakravarti v. New Bengal Bank Limited : AIR1939Cal63 , where the Court observed as follows:
Where the Banker, being bound to honour his customer's cheque, has failed to do so, he will be liable in damages. If, special damage, naturally ensuing from the dishonour, is proved, it will be properly taken into account in assessing the amount of the damages. If the customer be a trader, the Court may properly award substantial damages, in the absence of proof of special damage. In other cases the customer will be entitled to such damages as will reasonably compensate him for the injury which, from the nature of the case, he has sustained. All loss flowing naturally from the dishonour of a cheque may be taken into account in estimating the damages.
In The New Central Hall v. United Commercial Bank, Madurai : AIR1959Mad153 , this Court held:
Damages can be awarded even without proof of any special loss in certain cases like trespass not causing damages but only annoyance, or where a cheque issued by a non-trader-customer is wrongly dishonoured by the bank even though the person might have suffered no special loss as a result of such dishonouring. In such cases the damages will only be nominal. But in cases where a cheque issued by a trader-customer is wrongfully dishonoured, even special damages could be awarded without proof of special loss or damage.
In Mohamed Hussain v. Chartered Bank : AIR1965Mad266 which was later approved by a Bench of our Court in O.S.A. No. 52 of 1964, Sadasivam, J., after reviewing the English authority said that 'a negligent act may be the effective cause of an injury though it may not be proximate in time, if it is the particular incident, in a chain of events which has in fact led to the injury, that is, if it is the real cause of subsequent accident. To determine responsibility the law will consider the proximate and not the remote cause of an injury'. The learned Judge referred to the observations of Tindal, C.J., in Davis v. Carret 130 E.R. 1456, at page 1030 in the following terms:.no wrongdoer can be allowed to apportion or qualify his own wrong and that as a loss has actually happened whilst his wrongful act was in operation and force, and which is attributable to his wrongful act, he cannot set up as an answer to the action the bare possibility of a loss, if his wrongful act had never been done.
The learned Judge also approved of the distinction which is invariably made between trades and non-traders in the matter of recovery of damages from a negligent banker. The line thus drawn between a trader and a non-trader in the matter of recovery of compensation from a defaulting banker is traceable to the well-known principle that the credit of a trader if marred and injured without reasonable cause is likely to totally mar his reputation and credit in the market and it is this that prompted courts of law to award substantial damages to a trader in case of wrongful dishonour of cheques as against the banker without proof of actual loss to the customer. As against this, in so far as a non-trader is concerned, it is but reasonable to expect proof of such special damage claimed by him so as to entitle him to recover the same. As secrecy is maintained as between a non-trader-customer and his banker, the fact that a particular cheque, big or small, has been dishonoured would only affect the particular customer and the prestige of that customer, but it would not have a deleterious effect in the eye of the community at large. On account of this concept which is found In the ratio of such decisions that courts call for proof of special damage in case the subject-matter relates to the dishonour of cheque of a non-trader.
12. Bearing these principles in mind, it is for us to assess the quantum of damages to which the plaintiff is legitimately entitled to in the instant case as found by the trial Court and as accepted by us and consider whether there has been proof of such special damage in the instant case by the plaintiff-respondent. So long as the damages claimed is not remote and purely speculative, Courts are bound to consider the reasonable requests of Injured parties and grant them proper relief. The plaintiff was earning a sum of Rs. 600 per month with his employers. He got an employment between 1964 and 1966. This was taken into account by the learned trial Judge in assessing the special damages to which the plaintiff would be entitled to by reason of the consequential dismissal of the plaintiff from the employer's service. We have no hesitation in finding that the dismissal was due to the dishonour of the cheque which resulted in the telephone being cut off. He claimed special damages of Rs. 36, 000 it being the probable salary which he would have got for a period of five years from the date of termination of his service, since on the date of termination he was 50 years of age. The trial Court did take every aspect into consideration and estimated the special damages at Rs. 10,000 to the plaintiff and we agree with' the Court below that the quantum of damages granted is a reasonable assessment of the same having regard, to the situation in which the plaintiff was placed. We may also add that in the appeal before us there was no serious argument against the quantum of damages awarded by the Court below. In addition to a sum of Rs. 10,000 awarded as special damages, a sum of Rs. 4,000 as general damages towards loss of prestige, status and mental agony was also granted. The claim of the plaintiff was that he was entitled to a sum of Rs. 14,000 under this head. But the learned Judge awarded Rs. 4,000 as general damages. This again was not attacked Jay the learned Counsel for the plaintiff. We, therefore, confirm the decree of the trial Court in the sum of Rs. 14,000 as against the defendant as special and general damages together with interest at 6 per cent, per annum from the date of judgment of the Court below till date of payment. The respondent shall carry out the special directions issued by the trial Court in paragraph 32 of its judgment in the matter of the payment of Court-fee due to Government. The appeal is therefore dismissed with costs.