Allied Band Ltd: vs Sardar Khan

2013 M L D 1814

[Peshawar]

Before Mrs. Irshad Qaiser, J

ALLIED BANK LTD. through Manager---Petitioner

Versus

SARDAR KHAN and others---Respondents

Civil Revisions Nos.498 and 493 of 2010, decided on 3rd April, 2013.

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr.1, 2 & S.34---Contract Act (IX of 1872), S.238---Bank liable for fraud committed by its employees---Suit for recovery of money filed by the plaintiffs after money was fraudulently withdrawn vide forged cheques from their account by employees of the defendant- Bank---Suit was decreed for the principal amount and additionally Bank was held liable to pay compound interest to the plaintiffs---Contention of the defendant bank was, inter alia, that when the cheque was issued in the prescribed manner, the bank was not liable for loss to the account- holder and that granting a decree with compound interest was not correct---Validity---Fraud was committed by employees of the Bank, and the offence committed was within the powers delegated to the manager and cashier by the Bank for encashment and withdrawal--- Defendant Bank was legal person and acted as principal while its employees were performing their duties as agents for running the business of the Bank as its agents and under S.238 of the Contract Act, 1872 Bank was liable to fraud committed by its agents---While granting relief to a successful plaintiff, it was open for the Trial Court to grant such general relief in the interest of justice as the nature of case may demand and therefore compound interest could be ordered which was in accordance with S.34, C.P.C.---No illegality existed in order of courts below--- Revision was dismissed.

PLD 1998 Lah. 20 and 1991 CLC 175 rel.

Qazi Muhammad Anwar for Petitioner.

Khalid Mehmood Khan for Respondents.

Date of hearing: 3rd April, 2013.

JUDGMENT

MRS. IRSHAD QAISER, J.---By this single judgment, I propose to decide Civil Revisions Nos.492 and 493 of 2010, wherein the petitioner/Allied Bank Limited has questioned the validity of the judgments and decrees dated 15-2-2010 of the learned District Judge, Mardan, dismissing the appeals filed by it and maintained the judgment and decree dated 30-6-2009 of the learned Senior Civil Judge, Mardan, on alike grounds.

2.The learned counsel appearing on behalf of the petitioners contended that an incorrect concession has been attributed to him that he had admitted that the account holder has been defrauded by the Bank. He denied that no such concessional statement has been made by him. However, he next contended that what he stated was that only on humanitarian grounds, if the Court wanted to compensate the account holder, he could have been granted a decree of the claimed amount with simple interest and not compound interest. He by concluding his arguments contended that when the cheque was issued from the check book of the account holder in the prescribed manner and the cheque was processed and paid, the Bank is not liable for any loss of the account holder and that both the Courts below by ignoring this essential aspect of the case, failed to exercise jurisdiction vested in them.

3.As against that, the learned counsel appearing on behalf of the respondents contended that the Bank was required to have made payment; that defendants Nos.2 to 4 were the employees of the Bank and acted as its agents; that the plaintiffs had opened the account in the Bank and the Bank being principal is responsible for the act of the agents; that when the plaintiffs have been defrauded, they filed complaint to different agencies including FIA on the basis of which criminal proceedings were initiated against the employees. They were also dismissed from their service on the basis of fraud committed by them in the case and that the Bank was asked for several times to compensate them but failed, hence the plaintiffs were forced to file the suit for their lawful claim which was not accepted by the Bank; that the Bank claiming compound interest from the persons to whom it has given loan, therefore, the compound interest awarded to the respondents is not against the law and that no fault can be found in the impugned judgments and decrees of the Courts below as could call for interference therewith in the exercise of revisional jurisdiction of this Court. The learned counsel next contended that when the Bank did not disown the employees who acted fraud with the account holder, it has rightly been saddled with the liability of payment of the amount payable to the plaintiff/account holder.

4.I have gone through the record carefully and considered the submissions of the learned counsel for the parties.

5.No convincing evidence has been brought on the record to dispute that the defendants/bank employees have not committed the fraud. It is also clear from the opinion of the handwriting expert which is Exh.PW2/22 and the receipts No.2908151, which is Exh.PW2/3 that the figures made in the cheque and the entries made in the Pass Book were made by Noor Akbar Khan, Manager and Khairul Umam, Cashier. This was the reason that the employees, who acted fraud with the account holders, besides being convicted by the NAB authorities, have also been dismissed from their service after taking disciplinary action by the Bank Authorities. The petitioner/Bank also did not dispute their dismissal from service on account of fraud acted with account holders. It is also not disputed that even after the dismissal of service of their employees, the amount withdrawn by them has not been given to the plaintiffs/respondents. The

Bank/petitioner also failed to give the substance of proof to their averments that the Bank is not liable for any loss of the account holder, because fraud has been committed by the employees of Bank and the offence committed is within the powers delegated to the Manager and Cashier by the Bank for encashment and withdrawal.

6.The Bank being limited Company is a legal person and acted as principal while the employees are performing their duties as agents for running the business of the Bank as its agents. Section 238 of Contract Act is very clear in this respect which is reproduced as under:-- "Misrepresentations made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made or committed by the principal."

7.From the careful perusal of the arguments of the learned counsel for the petitioner it reveals that he has not challenged the payment of principal amount as in Para No."C" of the grounds of present civil revisions, he has categorically stated "if for humanitarian grounds the Court wanted to compensate the account holders he could have been granted the decree of he claimed amount with simple interest and not compound interest. Now it is to be seen whether the decree granted for the compound interest is correct and legal or not. Section 34 of the C.P.C. deals with interest is reproduced as under:-

"34. Interest.---(l) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the Court deems reasonable on the aggregate sum so adjudged, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit."

Reference in this respect is made to PLD 1991 SC 81 wherein it is held "while granting relief to a successful plaintiff, it is always open to the Court to grant such general relief as in the interest of justice the nature of the case may demand". Reference may also made to PLD 1998 Lahore 20 and 1991 CLC 175. The learned appellate Court while confirming 14 percent amount with compound interest made the following observations:--

"The Bank representative has also admitted the fraud by their employees who were removed. When the fraud was proved, the employees were removed, they were convicted by the NAB authorities, then the Bank should have made payment to the persons who became victims of fraud of their Bank. Denial of the same to the lawful account holders has deprived the plaintiffs of the use of their money in other profitable business. Keeping in view the fast devaluation of the Rupee, the awarding of 14 percent amount with compound interest is not against the law".

8.As the learned appellate Court while concurring with the finding of the learned trial Court after considering all these aspects of the case, has rightly dismissed the appeal of the petitioner, I will not like to interfere with their finding when it suffers from no error, absence or excess of jurisdiction. The judgments cited by the learned counsel for the petitioner when considered in the light of the facts discussed above, appear to be distinguishable on all counts. When this being the position, I do not think a case for interference with the finding of the learned Courts below is

made out.

9.For the reasons discussed above, these revision being without substance are dismissed with no order as to cost.

KMZ/250/P Revisions dismissed.