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Gour Chandra Mukherjee Vs. Andrew Yules Co-operative Credit Society Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberC.R. No. 3207 of 1975
Judge
Reported inAIR1977Cal336,82CWN241
ActsContract Act,1872 - Section 73
AppellantGour Chandra Mukherjee
RespondentAndrew Yules Co-operative Credit Society Ltd. and ors.
Appellant AdvocateRamen Banerjee and ;Nikhil Kumar Bhattacharya, Advs.
Respondent AdvocateKrishna Dulal Mukherjee, Adv.
DispositionPetition dismissed
Excerpt:
- .....about rs. 20,000/- was kept in the employer's office. even on 22-0-73 he remitted rs. 11,000/- to the head office keeping a balance of rs. 5842.38 p. it was said that the vice-chairman refused to accept any amount beyond rs. 15,000/- for safe keeping in custody of concord insurance company. the vice-chairman was a witness in the proceedings but no such question on his alleged refusal was put to him. accordingly it was rightly found that his alleged explanation for not keeping the cash with concord office was incredible. further there also appears to be a practice about the deposit of cash with the concord office which was not availed of by the petitioner and no reason therefore has 'been established.8. in the circumstances we are of opinion that the petitioner did not take sufficient.....
Judgment:

Salil Kumar Datta, J.

1. This Rule is directed against order dated 20-2-75 passed by the Assistant Registrar ofCo-operative Societies in Appeal Case No. 5/Calcutta of 1974-75 affirming the Award of the Arbitrator in Dispute Case No. 40/ Calcutta of 1973-74. The petitioner was an elected director of the Andrew Yule's Co-operative Credit Society Limited which had its office at 8, Clive Row. It had also an Unit office at 38, Chowrangi Road, Calcutta for collection from and payment of sanctioned money to member employees of the Concord of India Insurance Co. Ltd. According to the arrangement, an elected director being an employee of the Concord Insurance was to handle society's fund appertaining to the Concord unit and to render statement of receipts and payments at the close of the day's transaction. A cash box inside a lock drawer was provided for keeping the money pending disbursement or remittance. The petitioner at the material time was an elected director of the society and handled the cash of that unit during the relevant period from 3-11-72 to 25-6-73. On 25-6-73 the petitioner reported to the Vice Chairman of the Society that he had kept a sum of Rs. 5842.38 P. on 22-6-1973 in the cash box, locked it and kept the same in the appointed drawer duly locked before he left his office for the day. On 25-6-73 when he opened the cash box he found that the cash amount stated above was missing. The Vice-Chairman reported the matter to the Chief Executive of the Concord Insurance who ultimately sent a report to the police. The police made investigation but the results were not known. Thereafter the Managing Committee considered the position and directed the petitioner to make good the loss arising out of the alleged disappearance of the cash within a specified time. As the requisition was not complied with the Society raised a dispute being No. 40/Calcutta of 1973-74 claiming Rs. 5842.38p with interest from the petitioner. The dispute was referred to the Arbitrator No. III for adjudication. The Arbitrator after taking evidence and considering the material on record decreed the amount in favour of the society directing the petitioner to pay the aforesaid amount with interest thereon from 26-6-73 till realisation.

2. The petitioner thereafter preferred an appeal referred to above and the Assistant Registrar of Co-operative Societies the appellate authority upheld the Award of the Arbitrator. The appellate authority raised two points for considerations

(1) Whether the defendant appellant was custodian of the cash appertaining to Concord Unit?

(2) Whether he had any civil liability arising out of the disappearance of the cash balance and if so, what is the extent of the liability?

In coming to his decision the appellate authority in agreement with the Arbitrator noted the informal arrangement made by the Managing Committee in maintaining the cash. It was held that even so, such arrangement did not alter the fact of the petitioner's being the custodian of the cash and the petitioner was liable to make good the loss arising out of sheer negligence of his duty.

3. Mr. Banerjee appearing for the petitioner submitted that both the Arbitrator as also the, appellate authority acted without jurisdiction in holding that the petitioner was guilty of negligence when there was no issue framed on that basis. He submitted that if an issue was framed the petitioner would have been in a position to establish that he had followed the informal and conventional arrangement for maintaining the cash and was not negligent in any respect and the arrangement being imperfect the Managing Committee should have been held guilty of contributory negligence. On this ground it was submitted the Award was without jurisdiction and was liable to be interferred with under Article 227 of the Constitution.

4. There was no dispute that the petitioner was the custodian of the cash appertaining to Concord unit. The second issue as to whether he had a civil liability arising out of disappearance of the cash balance embrace all aspects of the question involving the liability of the petitioner. This point for decision as already stated involved the question of determination of the conduct of the petitioner in regard to the maintenance of the cash vis-a-vis the arrangement made by the Managing Committee. We accordingly think that no specific issue was called for and/or that there was any prejudice caused to the petitioner on account thereof. As the records indicate the parties adduced their evidence in support of their respective cases touching all these aspects.

5. It has next been, said that on the findings arrived at by the appellate authority the petitioner should not have been found liable for the amount under claim, it has been held by the appellateauthority that the Managing Committee had evolved arrangement in exercise of their lawful jurisdiction and such arrangement was acted by the successive directors who have been in charge of the cash without any protests on the part of the committee. Even so, the authority held that informal or conventional nature of arrangement did not alter the fact of the petitioner being the custodian of the cash. Mr. Banerjee contended that the petitioner was not negligent in respect of the disappearance of cash and referred in support to Winfield on Tort, 7th Edition, page 190 wherein it has been said that a defendant charged with negligence can clear (himself) if he shows that he has acted in accord with general and approved practice. He relied on the practice followed by his predecessors in-office in keeping heavy cash in the cash box inside the drawer which was never objected to by the Managing Committee nor did it provide for better security arrangements.

6. The petitioner, as we have seen, was the legal custodian and in charge of the cash for day-to-day operations. He accordingly owed an obligation and legal duty to the Managing Committee for safe custody of the cash belonging to the Society kept in his charge. In discharge of his duty, he was expected and bound to take all such precautions as a reasonable man would take in similar circumstances. A practice insecure and risky as is obviious, is no answer to the omission to take adequate care and precaution a reason-able man entrusted with cash would and is expected to take in such circumstances. It is also no answer that the Managing Committee acquiesced to the practice imperfect as it was for the Managing Committee had put a director in charge of the cash who was free to take all precautions in discharge of his legal responsibility.

We accordingly find no lacuna in the finding of the appellate authority that even though the informal arrangements were acquiesced by the Managing Committee, the elected director had further responsibility in regard to the cash entrusted to his charge. There can be no dispute that he was negligent as a reasonable man should have taken further precaution for safe custody of such fund.

7. It has further been pointed that the petitioner on two occasions remitted heavy cash to the office of the Concord Insurance for safe custody and even on21-6-73 Rs. 15,000/- out of day's cash balance of about Rs. 20,000/- was kept in the employer's office. Even on 22-0-73 he remitted Rs. 11,000/- to the Head Office keeping a balance of Rs. 5842.38 P. It was said that the Vice-Chairman refused to accept any amount beyond Rs. 15,000/- for safe keeping in custody of Concord Insurance Company. The Vice-Chairman was a witness in the proceedings but no such question on his alleged refusal was put to him. Accordingly it was rightly found that his alleged explanation for not keeping the cash with Concord office was incredible. Further there also appears to be a practice about the deposit of cash with the Concord office which was not availed of by the petitioner and no reason therefore has 'been established.

8. In the circumstances we are of opinion that the petitioner did not take sufficient precaution for the heavy cash which he had in his custody after the day's working and there is no escape from the conclusion that he was negligent in respect thereof as has been found by the impugned judgment. For all these reasons, we do not propose to interfere with the impugned order. The Rule accordingly fails and is discharged. There will be no order as to costs.

G.N. Ray, J.

9. I agree.


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