Niranjan Kaur vs New Delhi Hotels Ltd. And Ors.
1987 Latest Caselaw 414 Del

JUDGMENT

Jagdish Chandra, J.

(1) This suit of the plaintiff Niranjan Kaur against the defendants is for the recovery of a sum of Rs. 52,000.1-. The facts of the case are that the plaintiff purchased flat No. 5 on the second floor of the multi-storeyed building situate.d at premises No. 27, Barakhamba Road. New Delhi through her husband Narainder Singh Brar from M/s. New Delhi Hotels Limited defendant No. I and the payment of the price thereof was to be made in installments. Ail the installments except two which were due on 18-11-1972 had' been made. In respect of those two remaining Installments the plaintiff purchased demand draft No. DBY-598649 for Rs. 41,535.00 through Baldev Singh and Daulat Ram employees of her husband in her name from the Punjab National Bank, Muktasar Branch, Punjab payable by the Punjab National Bank, Regal Building, New Delhi branch and the same was sent by registered post acknowledgement due to defendant No. I towards the aforesaid two Installments at its address, M/s. New Delhi Hotels Limited Ambassador Hotel, Sujan Singh Park, New Delhi . However, by mistake of the aforesaid employees of the husband of the plaintiff the said demand draft was not endorsed in the name of defendant No. 1. The registered cover containing the aforesaid demand draft reached the office of defendant No. I in due course and was taken delivery of on 21-11-1972 and it came in the hands of defendant No. 2 R. Ganesh being the Personal Assistant and Confidential Servant of L. Ram Parshad Managing Director of defendant No. 1, within the scope of the duties and functions of defendant No. 2. After the receipt of this draft by defendant No. 1, defendant No. 2 R. Ganesh and one Mohinder Lal Chawla proprietor of the concern defendant No. 3 M/S Chawla Stores located in Ambassador Hotel Building wherein the office of-defendant No. I is located, conspired to realise the amount of 'this .draft fraudulently and to misappropriate the same. The modus operandi adopted for this purpose was that on the reverse of the demand draft the following endorsement was forged :-

"PLEASE Pay Chawla Stores. Sd/ Niranjan Kaur"

Thereafter, the demand draft was presented to the Central Bank of India, Khan Market Branch, New Delhi for the collection to its amount and its deposit in the current account of Chawla Stores which the letter had with the former. The Manager of this bank got verified the aforesaid endorsement from Mohinder Lal Chawla and collected the amount of the draft from the Punjab National Bank, Regal Building Branch, New Delhi and deposited that amount in the current account of Chawra Stores with the Central Bank of India, Khan Market Branch.

(2) Mohinder Lal Chawla presented the pay-in-slip dated 22-11-1972 for Rs. 41,535.00 signed by him in the name of Chawla Stores and also the guarantee letter furnished by. him which reads as follows :-

"CENTRAL Bank of India, Khan Market, New Delhi. I, hereby guarantee the discharge of Draft No. 598649 dated 18-11-1972 drawn on Punjab National Bank, Regal Building for Rs. 41,535.00 endorsed by Niranjan Kaur as genuine and hereby indemnify you against all expenses and charges which you may incur or sustain under our Guarantee to obtain payment of the said Draft. 22-11-1972.. Yours faithfully, Sd/ Mohinder Lal Chawla"

(3) After the aforesaid amount of Rs. 41,535.00 was deposited in the current account of Chawla Stores with the Khan Market Branch of the Central Bank of India. Mohinder Lal Chawla, in furtherence of the conspiracy hatched up between him and defendant No.-2 R. Ganesh, issued a bearer cheque No. KHNTIH-0536S4 dated 22-11-72 in the name of Niranjan Kaur for Rs. 41,2701- and instructed the Bank to make payment in cash to R. Ganesh defendant No. 2, and the amount was paid by the Central Bank of India, Khan Market Branch accoidingly.

(4) When the plaintiff did not get the receipt regarding the payment of the aforesaid two Installments, her husband made enquiries from the office of defendant No. I on telephone and defendant No. 1 sent the following telegram to the husband of the plaintiff :-

"PAYMENT received, Ignore letter writing. Regret inconveniences. New Delhi Hotels".

(5) Even after waiting for some time when no receipt was forthcoming the plaintiff's husband made further enquiries and defendant No. I sent another telegram on 3 1-1-73 as under:-

"YOUR call verified, Payment received. Receipt posted today regret delay due marriage. New Delhi Hotels".

(6) When ultimately the husband of the plaintiff learnt that the amount of the draft was received in the office of defendant No. 1, that it came into the hands of defendant No. 2 Personal Assistant and Confidential Servant of the Managing Director L. Ram Parshad of defendant No. I and that the amount of the same was fraudulently withdrawn by defendants 2 and 3 and misappropriated the lodged report No. 101 dated 28-2-1973 with Police Station Tughlak Road, New Delhi as a consequence of which the police investigated the case and challenged R. Ganesh and Mohinder Lal Chawla under Ss. 471, 467, 420 & 468 of the Indian Penal Code and after trial Mohinder Lal Chawla was acquitted but R. Ganesh defendant No. -2 was convicted on 10-1-1974 by Shri M. K. Chawla then Additional Sessions Judge, Delhi.

(7) The plaintiff requested defendant No. I to give credit of the aforesaid draft amount of Rs. 41,535.00 to her towards the aforesaid two Installments due from her on 18-11-72, but her request was declined whereupon she had to pay again the amount of those two Installments to defendant No. I by way of the rummage price of the aforesaid flat which she had purchased from defendant No. 1.

(8) Besides the draft amount of Rs. 41,535.00 the plaintiff has also claimed interest on that amount at the rate of 9 per cent per annum, though alleging that the market rate of interest prevailing at the relevant time was 12 per cent per annum, and thus total amount claimed in suit is Rs. 52,0001- and for this claim all the three defendants are sought to be made liable jointly and severally.

(9) Defendant No. 1 M/s. New Delhi Hotels Ltd., while contesting the suit, has taken up the position that the plaintiff should have sent the bank draft to defendant No. 1 either in the name of defendant No. I or endorsed in favor of defendant No. 1. It is denied that defendant No. 2 R. Ganesh was entitled to receive any bank draft from the .plaintiff or had any duty and function to receive the bank draft and to misuse the same, and thus defendant No. 2 was not acting within the scope of bids duties in the alleged receiving of the bank draft. It is further alleged that he was employed as a steno in Hotel Ambassador and not with defendant No. 1. Regarding the demand draft in question it is denied that it was received by defendant No. 1 or its amount was ever received by defendant No. I or by any person authorised on its behalf and consequently defendant No. 1 was entitled to refuse to give credit of this amount to the plaintiff towards the two Installments due from her. Defendant No. 1 thus prays for the dismissal of' the suit with costs.

(10) Defendant No.2R. Ganesh was proceeded against ex parte as he did not put up appearance despite service.

(11) Defendant No. 3 M\s. Chawla Stores through its proprietor Mohinder Lal Chawla raised certain objections that the plaint did not disclose .a cause of action against him; that the suit was bad for non-joinder of the Central Bank of India which was a necessary party; that the plaint does not give particulars of fraud or conspiracy on his part, that he acted bona fide and in good faith and thus could not be held liable in this suit and that defendant No. 2 R. Ganesh was acting within the scope and authority of his employment as a result of which the claim could lie. if at all, against defendant No. I employer of defendant No. 2.

(12) He denied that he entered into any conspiracy with defendant No. 2 to realise the amount of the draft in question fraudulently or deceitfully or that he was in any manner concerned with the alleged, misappropriation of the same. He denied if any endorsement was forged. He asserted that defendant No. 2 represented to him that he wanted to purchase 5 World Air Tickets for some party and that the Airlines would not accept draft or cheque and only wanted cash and defendant No. 2 gave to him three documents all dated 22-11-1972. It is further pleaded that defendant No. 2 had been a regular customer at his shop and was also known to him as Private and Confidential Secy. of L. Ram Parshad, the Managing Director of defendant No. I and on making enquires and after satisfying himself and also trusting the representation made to him by defendant No. 2 as aforesaid and in order to help him under a bona fide belief of the genuineness of the representations made to him and that the documents and the draft given to him, he agreed to get the demand draft in question cashed on a payment of Rs. 2001- as commission. It is also asserted that it was also known to him that defendant No. 2 was working under L. Ram Parshad who held an Agency of United Arab Airlines, the office of which was situated in Hotel Ambassador, and thus in the situation aforesaid there was no reason for him to doubt the correctness of the representations made to him by defendant No. 2 and even entries in respect of this tran.saction were made by him 'in his books of account which were regularly kept and maintained in normal course of business. He has also pleaded that the draft was brought to him with the endorsement of Niranjan Kaur and defendant JMo. 2 represented to him that this endorsement was in the hand of the person who was holder of the said draft. He asserted that acting honestly and bona fide 'he deposited the draft in his account and thin issued a cheque in the name of Niranjan Kaur and handed it over to defendant No. 2. He has also prayed for the dismissal of the suit with costs.

(13) Ill the replications to the written statements of defendants I and 3 the plaintiff controverter their pleadings and reiterated her own in the plaint.

(14) From the pleadings of the parties, the following issues were framed :-

(1) Whether the plaint does not disclose a cause of action against defendants No. I and 37 O.P.D. I and 3.

(2) Whether the Central Bank of India is a necessary party to the suit, if so to what effect? O.P.D.3.

(3) Whether the plaint does not give particulars of fraud and conspiracy? O.P.D. 3.

(4) Whether the plaintiff purchased demand draft No. DBY-508649 for rupees forty one thousand, five hundred and thirty five from the Punjab National Bank, Muktsar for payment of two Installments of the price of the Flat No. 5 situated in the building 27, Barakhamba Road, New Delhi to defendant No. I ? O.P.P.

(5) Whether the draft referred to in issue No. 4 above was sent by the plaintiff to the defendant No. 1 under registered cover, acknowledgement due, without making an endorsement on it in favor of the defendant No. 1, and it came into the hands of the defendant No. 2? O.P.P.

(6) Whether defendant No. 2 received the demand draft referred to in issue No. 5 on account of his being Personal Assistant of L. Ram Parshad, Managing Director of defendant No. 1 and if so what is its effect qua defendant No. 1 ? O.P.P.

(7) Whether Lala Ram Parshad was not the Managing Director of defendant No. 1 at the relevant time, and if so to what effect? O.P.D. 1.

(8) Whether after the receipt of, 'the draft in the office of the defendant No. I, the defendant No. 2 and Mohinder Lal Chawla, defendant No. 3 entered into conspiracy to fraudulently realise the amount of the draft and to misappropriate it and in furtherance thereof forged an endorsement on the back of the draft "please pay Chawla Store-Niranjan Kaur" ? .O.P.P.

(9) Whether the demand draft was encashed through the Central Bank of India, Khan Market branch and 'the amount of the draft i.e. Rs. 41,5351- was deposited in the current account of defendant No. 3? (Chawla Store), with the said Bank? O.P.P.

(10) Whether after the forgery of endorsement on the back of the demand drafts it was presented on the Central Bank of India, Khan Market branch and the bank got the first endorsement verified by MohinderLal Chawla, defendant No. 3 ? O.P..P.

(11) Whether the pay-in-slip and the guarantee Ex. Pi were executed by Mohinder Lal Chawla and were presented in the Central Bank of India, Khan Market branch, and on his doing so The amount was realised 'by the bank from the Punjab National Bank, Regal Building, New Delhi and deposited in the current account of defendant , 3? O.P.P.

(12) Whether defendant No. 3 in furtherance of the conspiracy hatched by him and the defendant No. 2 got issued a forged bearer cheque No. KHNI/HO 63684, dated 22-11-72 for Rs. 41270.00 m the name at Niranjan Kaur and instructed the bank to make payment of the amount to defendant No. 2 ? O.P.P.

(13) If issues Nos. 5, 6, 7, 8, 9 and 10 are decided in favor of the plaintiff what amount the plaintiff is entitled to recover and from whom? O.P.P.

(14) Whether the plaintiff is entitled to interest, if so at what rate and in what amount? O.P.P.

(15) Relief.

(15) During the course of arguments this issue was not pressed by the learned counsel for defendants No. I and 3 and no argument was advanced by them in respect of the same. Even otherwise the perusal of the plaint does go to show that it discloses a cause of action against defendants I and 3. For the purpose of the decision of this issue only the plaint has to be looked into for finding out whether a cause of action against defendants I and 3 is disclosed therein or not and the decision of this issue does not raise with the ultimate finding of the Court in respect thereof. This issue is found against defendants 1 and 3. Issues NO. 2 & 3

(16) The onus of both these issues is upon defendant No. 3 and dulling the course of arguments it was conceded at the Dar by Mr. R. K. Makhija learned counsel for defendant No. 3 that he did not press the same and that the objections subject mailer of these issues were of no merit. Even otherwise it would be seen that the Central Bank of India is not a necessary party to the suit because no wrongful action is alleged on its part by the plaintiff. Wrongful part is alleged only against defendants 2 and 3 whereas the liability of defendant no. I is sought only as vicarious liability.

(17) The perusal of the plaint shows that it does give particulars of fraud and conspiracy-. So, both these; issues are decided against defendant No. 3. , Issues 4 & 5

(18) The testimony of Raj Kumar Chadha (Public Witness I), Baldev Singh (Public Witness 2), Daulat Ram (Public Witness 3), plaintiff Niranjan Kaur . (PW5) and her husband Narinder Singh Brar (Public Witness 6) is relevant besides documents Exts. Pi to P5 on these issues. Baldev Singh (PW2) and Daulat Ram (Public Witness 3) are the employees of the husband of the plaintiff. The statement of .Baldev Singh (Public Witness 2) shows that he has been working as employee of plaintiff's bustard for about 1-5 years or so and that plaintiff's husband gave him a sum of Rs. 41,550.00 for the preparation of a demand draft in the name of the plaintiff whereupon he took Daulat Ram and. went to Punjab National Bank, Muktsar and gave a sum of Rs. 41,5501- to the Manager of that Bank for the preparation of the draft in favor of the plaintiff. Ext.-P2 is the photocopy of the application which he gave to the bank for the preparation of the draft and the manager of that bank got a draft in the sum of Rs. 41,5351- prepared and handed over the same to Baldev Singh who in turn handed over the same to Daulat Ram for sending the same at Delhi according to a writing given by the plaintiff's husband in that behalf. Out of the amount of Rs. 41,5501- given by the plaintiffs husband of sum of Rs. 151- w.as in respect of the bank's charges and, thus, the draft was prepared in the remaining sum of Rs. 41,535.00.

(19) The statement of Daulat Ram (Public Witness 3) supports Baldev Singh (Public Witness 2) in respect of the making of the application and the preparation of the draft by the Punjab National Bank, Muktsar. He then stated that after the draft was prepared the same was given to him along with a letter by Baldev Singh and that was a forwarding letter addressed to , Delhi Hotels Ltd., New Delhi defendant .No. I and that he then sent that draft by registered post to New Delhi Hotels Ltd., New Delhi and he wrote that address on the envelope as well as on the acknowledgement due card in his own hand writing. Ext. "5 is the .copy of that A.D. card. This witness also proved Ext. Pi the copy of the aforesaid draft which according to his testimony was sent to defendant No. I in connection with the payment of two Installments towards the price of a flat at Barakhamba Road, New Delhi which was purchased in the name of the plaintiff.

(20) The statement of the plaintiff Niranjan Kaur as Public Witness 5 shows that she is an illiterate lady knowing simply Low to sign her name in Gurmukhi script and that on the suggestion of her husband Narinder Singh Brar she agreed to purchase a property at Delhi and she gave about Rs. 40,000 to Baidev Singh and Daulat Ram, employees of her husband for payment towards the price of the flat. hi her cross-examination she stated that she paid the aforesaid money to Daulat Ram and Baidev Singh at the instance of her husband who was at Delhi at that time. The statement of plaintiff's husband Narinder Singh Brar (Public Witness 6) also shows that in 1972 payments of two Installments were due in respect of the flat the plaintiff had agreed to purchase at Delhi and that he had told the plaintiff to pay the amount of Rs. 41,535 to Baidev Singh for being deposited with defendant No. I and that the plaintiff gave that amount to Baidev Singh who took the same to Muktsar and obtained bank draft from the Punjab National Bank, Muktsar. His statement further shows that although he had asked the plaintiff that the draft should have been in the n,ame of defendant No. 1, it was prepared in the. name of the plaintiff and that Baidev Singh gave that draft to Daulat Ram who sent the same by registered post to defendant No. 1 with the address of Ambassador Hotel, New Delhi.

(21) Raj Kumar Chadha (Public Witness I) is the Record Keeper of Punjab National Bank, Muktsar and he brought with him the application on the basis of which the said demand draft ("DBY598649) in the sum of Rs. 41,535 dated 18-11-1972 was-issued by this bank in favor of Smt. Niraman Kaur plaintiff and he deposed about the issuance of the said demand draft. Ext. Pi certified copy of the said demand draft and. Ext. P2 photocopy of the application on the basis of which the said demand draft was issued, stand proved in the statement of this witness This witness also brought with him the demand draft Issue Register of that bank and stated that there was an entry regarding issue of the aforesaid demand draft of 18-11-72. He also brought with him the cash book of that bank which contained entry regarding the said demand draft. Exts. P3 and P4 arc respectively the copies of these two entries. During the course of cross examination of this witness the learned counsel for the defendants raised an objection that this witness could net prove Ext. Pi copy of the demand draft nor Ext. P2 photo-copy of the, application for the issuance .of the demand draft. This objection was not decided at that time and was left to be decided at 'the stage of final arguments. This objection was not pressed by the learned counsel for the defendants during the course of final arguments Moreover, this.objecrtion has been rendered meaningless for the reason that Ext. P2 stood proved in the testimony of Baldev Singh (Public Witness 2) who made that application for the preparation of the draft whereas Ext.. Pi stood proved in the testimony of Daulat Ram (Public Witness 3) in whose presence the demand draft was prepared.

(22) Mr. Makhija learned counsel for defendant No. 3 contended that the draft in question was not purchased by the plaintiff as there occurred a discrepancy in the testimony of the witnesses as to who paid the amount of the draft-whether plaintiff or her husband Narinder Singh Brar This contention hardly of any consequence because the draft is in the name of the plaintiff as a result of which she becomes the owner of the same and the question of the money 'with which it was purchased, fades into insignificance. Though Baldev Singh (Public Witness 2) talks (if Narinder Singh Brar having .given him the sum of Rs. 41,550 for the preparation of the draft in the name of Niranjan Kaur plaintiff, the plaintiff Niranjan Kaur as Public Witness 5 and her husband Narinder Singh (Public Witness 6) have stated that the money was given to Baldev Singh by the plaintiff. In her cross-examination the plaintiff his specifically stated that when she gave ' this money, her husband was at Delhi though she paid this money at his instance. The statements of the plaintiff and her husband or this point have to be believed as true as against that of Baldev Singh (Public Witness 2) who appears to be confusing this matter thinking perhaps that the money paid by an illiterate wife was the money paid by her busband.

(23) The plaintiff denied that she signed on the back of,the draft. Even from the statements of Baldev Singh (Public Witness . 2) and Daulat Ram (Public Witness 3) it can be nude out that his draft was sent by post by Daulat Ram (Public Witness 3) without obtaining any endorsement on its back from the plaintiff in favor defendant No. 1 Even during the course of arguments no body urged that the endorsement appearing on the back of this demand date was in the hand of or signed by the plaintiff who is a totally illiterate lady, knowing only how to sign in Gurmukhi script whereas. the allegedly fogged endorsement appears entirely in English on the back of the draft which is in the criminal case file.

(24) There is no manner of doubt that this demand draft though addressed to defendant No. 1 through post, came into the hands of defendant No. 2 R. Ganesh and the entire evidence on the records of the case is clear pointer towards the same

(25) For the aforesaid evidence and the reasons I hold that the plaintiff purchased the demand draft in question for Rs. 41,535/ from the Punjab National Bank. Muktsar for the payments of the installments of the price of flat No. 5 situated in Building No.27, Barakhamba Road. New Delhi, to defendant No. 1 and that the same was sent by the plaintiff to defendant No. 1 through her husband's employee Daulat Ram (Public Witness 3) under registered cover, acknowledgement due, without making any endorsement on it in favor of defendant No. 1, and that it came into the hands of defendant No -2, and both these issues are decided accordingly in payout of the plaintiff. Issues NOS. 6 & 7.

(26) Defendant No. 1 M/s. New Delhi Hotels Limited has been represented by Lala Ram Parshad is its Managing Director. He has come into the witness box as D1W1 and he is the lone witness of defendant No. I and he has stated that he has been the director of New Delhi Hotels Ltd., defendant No. 1 during the years 1972 to 1975 and that he did not receive the bank draft in question dated 11-11-1972 in the sum of Rs. 41,535/.- from the plaintiff even though defendant No.1 had, been receiving money either by bank- drafts or by cross cheques in its name and that those drafts cheques had always been in the name of defendant No. 1, He has further stated that had defendant No. 1 received the aforesaid amount of Rs. 41,535 by means of any bank draft in its favor, it would have given credit to that effect. He has also denied that defendant No. 1 ever sent the Telegrams,. Ext. D1W1 and D1W1/2 which have already been referred to in the judement. In Ms cross-examination by the counsel for defendant No. 3 this witness stated that R. Ganesh defendant No. 2 was not the employee of defendant No. 2 nor Secretary therein but was working as a typist for Hotel 'Ambassador, New Delhi since 1970 for two years. In his cross-examination by the plaintiff's counsel this witness stated that he was one of the promoter-directors of defendant No. 1 ever since its inception and that there is no managing director of defendant No.1 and that the registered office of defendant No. 1 is located in the premises of Ambassador Hotel, Sujan Sigh Park, New Delhi. He further stated that the salary to defendant No. 2 R. Ganesh was not paid from the accounts of defendant No. 1 but he did not remember if any payment was made to R. Ganesh from the accounts of defendant No. 1. He further stated that he had not brought with him the accounts of Hotel Ambassador or defendant No.1 since the year 1970 up to October 1972 as he was not called upon to bring the same. He did not remember if R. Ganesh had been given any letter of appointment by defendant No. 1 or Hotel Ambassador. He further stated that no duties, in writing, were assigned to R. Ganesh. He, however, admitted in his cross-examination by the counsel for defendant No. 3 that accounts were maintained by defendant No. 1 and that he maintains accounts for defendant No. 1 as also for Hotel Ambassador. He has further stated in his cross-examination by plaintiff's counsel that he used to give R. Ganesh dictation for writing letters for Hotel Ambassador but not for defendant No. 1 because Balwant Singh was the Stenographer for defendant No. 1 and Balwant Singh used to be paid his salary from the accounts of defendant No.1 and Balwant Singh used to be asked to perform duties as steno-typist of defendant No. I as also for Hotel Ambassador.

(27) There is also the testimony of Mohmder Lal Chawla D3Wl proprietor of defendant No. 3 wherein he has deposed that R. Ganesh defendant No. 2 was working with Lala Ram Parshad since about 1970 and was both the Personal Assistant as also Confidential Secretary of Lala Ram Parshad and he was doing all his work. He also stated that Lala Ram Parshad is the. Managing Director of Hotel Ambassador while defendant No.1 M/s New Delhi Hotels Ltd., is the sister concern of Hotel Ambassador. There was no cross-examination on this witness by the counsel for defendant No. 1.

(28) The plaintiff examined Roshan Lal Sabharwal (Public Witness 4) an employee of New Delhi Hotels defendant No.1 since 1975 sad has been working as accounts-in-charge in the office of defendant No.1 situated in Hotel Ambassador, Sujan Singh Park, New Delhi since January 1976. He stated that defendant No.1 had promoted and constructed a multi-storeyed commercial building known as 'New Delhi House' at 27, Barakhamba Road, New Delhi and flat No. 9 on second floor in New Delhi House was allotted to the plaintiff Niranjan Kaur who, as per the books in his possession had paid a sum of Rs. 2,14,7401- towards the price of that flat. The statement of this witness could not be concluded as the learned counsel for the plaintiff wanted a direction from the Court to this witness to bring him the correspondence entered into between the parties showing the claims of arrears made by defendant No.1 on the plaintiff and the witness was directed to search for the correspondence file and produce the same on the next date where after the remaining examination-in-chief of this witness was to continue. But this witness never turned up thereafter with the result that the correspondence which had taken place between the plaintiff and defendant No.1 remained not produced.

(29) On the basis of the aforesaid evidence it was contended, and in my opinion rightly, by the learned counsel for the plaintiff that even though defendant No. 1 did not have any Managing Director, Ram Parshad being the promoter-director of defendant No. 1 was all in all regarding the state of affairs of defendant No. 1 especially when he maintained the accounts of defendant No. 1 and also gave dictation to the stenographer regarding the letters for defendant No. 1. The further contention of the learned counsel for the plaintiff is that as the testimony of Mahinder Lal Chawla proprietor of defendant No. 3 was not subjected to any cross-examination by the counsel 'for defendant No.1, Mahinder Lal Chawla's testimony should be taken as having been accepted as correct by defendant No. 1 in regard to the fact that R. Ganesh defendant No. 2 was both the Personal Assistant as also Confidential Secretary of I-. Ram Parshad and that defendant No. 2 was doing all the work for L. Ram Prashad. This too has force. The next contention of the learned counsel for The plaintiff appears to he quite weighty and sound when he urged that defendant No. 1 did not produce its account books even though admittedly maintained by L. Ram Parshad' (DIWI) director of defendant No. 1, which could go to show decisively whether defendant No. 2 R. Ganesh was or was not an employee of defendant No. 1 during the relevant period. He has also urged that Roshan Lal Sabharwal (PW4), though directed by the Court during the course of his testimony to produce the correspondence the pertaining to the plaintiff and defendant No. 1 on the next date, did not comply with the direction of the Court, and the correspondence file if produced could have shown whether defendant No. 2 R. Ganesh. was connected or not with that- correspondence entered into between defendant No. 1 and the plaintiff which in turn could go to prove if he was or was not in the employment of defendant No. 1 and for these omissions the learned counsel for the plaintiff wants the Court to raise an adverse inference against defendant No. 1 that if the record of defendant No. 1 including the account' books and the aforesaid correspondence had been produced, the same would have shown R. Ganesh defendant No. 2 to be in employment of defendant No.1 during the relevant time. In support of this contention of his he has relied upon Gopal Krishnaji Ketkar v. Mohamed Haji Latif and others wherein it is laid down that when a party in possession of best evidence which would throw light on 'the' issue in controversy withholds it, Court ought to draw an adverse inference against him not with standing that onus of proof does not lie on him, and further that such party cannot rely on the abstract doctrine of onus' of proof or on the fact that he was not called upon to produce it.

(30) In Murugesam Pillai v. Ganana Sambandha Pandara Sannadhi Atr 1917 Pc 6(2) (at p. 8) Lord Shaw Observed as follows :-

"A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine .of the onus of proof and the Courts 'the best material for its decision. With regard to third parties, this may be right enough-they have no responsibility for the conduct of the suit: but. with regard to the parties to the suit it is, in their Lordships' opinion an inversion of sound practice for those desiring to - rely upon a certain state of facts to withhold from the Court the written evidence in their possession which would throw Sight upon the proposition."

(31) In the face of tile aforesaid authorities there is all force in the contention of the learned counsel for the plaintiff that a adverse inference should be drawn by the Court that if the account books and correspondence between the plaintiff and defendant No. 1 had been produced by defendant No.1, the same would have .gone against defendant No. 1 and would have shown that defendant No. 2 R.. Ganesh was in the employment of defendant No.1 at the relevant time and was concerned with the correspondence between defendant No.1 and the plaintiff and others apd consequently on the strength of the aforesaid adverse inference which is based on the withholding of the best evidence or, the point by defendant No.1 it stands proved 'that defendant No, 2:, R. Ganesh 'was in the employment of defendant No.1 and concerned with the correspondence being Personal Assistant of L. Ram Parshad the founding director of defendant No.1, who though not the Managing Director' was, however, the head figure in defendant No.1 as defendant No. 1 does not have a managing director.

(32) In order that the doctrine of vicarious liability may apply, there are two conditions which must co-exist :

(1) The relationship of master and servant must exist between the defendant and the person committing the wrong complained of;

(2) The servant must in committing the wrong have been acting in the course of his employment.

(33) A servant may be defined-as any person employed by another to do work for him on the terms that he, the servant is to be subject to the control and directions of his employer in respect of the manner in which his work is to be done.

(34) A master is not responsible for the wrongful act' done by his servant unless it is done in the course of his employment. It is deemed to be so done if it is either (1) a wrongful act authorised by the master, or (2) a wrongful and unauthorised mode, of doing some act authorised by the master (vide Poland v. Parr (John) & Sons (1927)1 K.B. 236(3), 240;. Warren v. Henlys Ud. (1948)2 All. E. R. 935 (4), 937 ; IIkiw v. Samuels (1963) 1 W.L.R. 991(5), 997, 1002, 1004. A in aster is liable even for acts which he has not authorised, provided they are so connected with acts which he has authorised That they may rightly be regarded as modes-although improper modes-of doing them. In other words, a master is responsible not merely for what he authorises his servant to do, but also for the .way in which he does it. If a servant does negligently That which he was authorised to do carefully, or if he does fraudulently that which he was authorised to do honestly, or if he docs mistakenly that which be was authorised to do correctly, his master will answer for that negligence, fraud or mistake vide--Berwick v. English Joint Stock Bank (1867) L.R. 2 Ex. 259(6), 266). On the other hand, if the unauthorised and wrongful act of the servant is not so connected with the authorised act as to be a mode of doing it, but is an independent act, the master is not responsible': turn in such a case the servant is not acting in the course of his employment, but has gone outside of it (Vide-Canadian Pacific Railway Company v. Leonard Lockhari Air 1943 Pc 63)(7).

(35) In Barwick v. English Joint Stock Bank's case (supra) the defendant-bank was held liable for a fraudulent representation made to the plaintiff by the manager of one of the bank's branches in relation to the business under his control. It was long supposed that where the fraud or other willful wrong-doing of the servant was committed for his own benefit and not on, his master's behalf, his master was not responsible. It was, however, decided by the House of Lords in Lloyd v. Grace, Smith & Co. (1912) Ac 716(8), distinguishing Barwick v. English Joint Stock Bank (Supra) that this was not so. The facts in Lloyds' case were that in the office of Grace, Smith & Co., a firm of solicitors in Liverpool of long standing and good repute, the appellant, Emily Lloyd, a widow woman hi humble circumstances, was robbed of her property by the solicitors' managing clerk who had induced Mrs. Lloyd, a client of the firm to transfer to him a mortgage by fraudulently misrepresenting the nature of the deed of assignment, and thereupon obtained and misappropriated the mortgage .moneys. The solicitor was held liable to his client for the fraud although it was committed solely for the benefit of the fraudulent servant himself. The House held that so long as a servant is acting within the 'scope of the employment and rusted to him, his employer is liable for all frauds committed by that servant, whether for the benefit of the employer or for his own profit.

35(a) "Seeing somebody must be a laser by this deceit it is more reason that he, that employs and puts a trust and confidence in the deceiver, should be a loser than stranger [Vide-British Railway Traffic Co. v. Roper (1939) 162 L. T 17 (9), 221 and Rose v. Plenty (1976) 1 W. L. R. 14) (10). So even if the fraud committed by the employee is not for the benefit of the employer but is only for himself. the employer would nevertheless be held liable vicariously for the fraudulent act of the employee if It Is committed during the course of his employment. ' Thus, R. Ganesh defendant No. 2 being, in the- employment of defendant No. 1 M/s.New Delhi Hotels Limited at the relevant time, defendant No. 1 is also vicariously liable in tort for the fraudulent wrong on the part of defendant no. 2 R. Ganesh in regard to the bank draft in question of the plaintiff and both these issues are decided accordingly in favor of the plaintiff and against defendant no. 1.

ISSUES NOS. 8 to 12.

(36) There are three documents all given by R. Ganesh defendant No. 2 to Mahinder Lal Chawla proprietor of defendant No. 3 M/s. Chawla Stores. It would be necessary to set out these three documents and the same are reproducer below :- Letter annexure 'C' (Ext. D3W1/3) Received from M/s. Chawla Stores, New Delhi the sum of Rs. 41270.00 Rs. Forty one thousand two hundred seventy only) in cash against Draft No. Dby 598645 on Punjab National Bank, Muktsar payable at Punjab National Bank, Regal Building. New Delhi amounting to Rs. 415351- (Forty one thousand five hundred thirty five only). This payment is in full and final settlement amounting to Rs. 41270.00 after adjusting collection charges by the bank and incidental expenses. 22-11-1972 Sd(- " Letter- annexure 'B'' (Ext.D3W112)

"DEAR Mr. Chawla, I am enclosing herein a receipt for the payment. I am known very well to the party and shall assure you from myself if there is any liability, I shall hold myself responsible for this. The address of the party is- India: Smt. Niranjan Kaur, House No. 42-E, Sector Iii, Chandigarh. Canada : C/o Santock Singh, Architect Adelaide Street, toronto, Ontoria, Canada. Thanking you, Yours truly, sd/- R. Ganesh, 12/A, 43, W.E. Area, Karolbagh, Ambassador Hotel, New Delhi-3."

Letter annexure 'B' (Ext. D3WIII)

"R.Ganesh Hotel Ambassador, 'Sujan Singh Park. New Delhi-3. 22nd Nov. 1972. Mr. Chawla, Chawala Stores, New Delhi. Dear Mr. Chawla, I am enclosing herewith a Demand Draft No. 598649. on the Punjab National Bank, Muktsar, payable at Regal Branch of the bank at New Delhi amounting to Rs. 41,5351- in favor of Niranjan Kaur. Since I do not have a current account for negotiations in view of my regular client with you, I request you to kindly encash this draft for which you can charge Rs, 200.00 . The proceeds are for purchase of 5 round the World Air Tickets for their family. Thanking you, Yours truly sd/- "

These documents are the photo state copies and their originals are on the records of the criminal case. These three documents have been relied upon by defendant no. 3 and further stand proved in his testimony as D3W1. Mahinder Lal Chawla identified the signatures of R. Ganesh on Exts. D3W1/2 and D3W1/3. He, however, conceded that the signatures of the plaintiff Niranjan Kaur on Ext. D3W1/1 were not obtained in his presence. The testimony of Mahinder Lal Chawla further shows that on 22-11-1972 R. Ganesh approached him and old him that he had to purchase five tickets of Lufthansa on behalf of his client and as such he requested him to help him encash the demand draft in question dated 18-11-1972, certified copy of which is Ext. P1 (Original is in the records of the criminal file case). His statement further shows that initially he was reluctant to do so but R. Ganesh persisted in trying, to persuade him for getting the draft encashed as he (R. Ganesh) would get commission for file tickets, and he (Chawla) could earn some commission on the encashment of the draft and further that he would give receipts and a guarantee bond to indemnify him (Chawla) where after R. Ganesh went and gave to him the receipt Ext. D3W1/1 and the guarantee form Ext. D3W1/2. He has further stated that on the guarantee form the word cash was written but he told R. Ganesh that he would not five him cash but would issue a cheque in the name of the bearer of the draft. The word 'cash' does not occur in the guarantee form Ext. D3W1/2 but, however, occurs in the receipt Ext. D3W1/1 which purports to be signed by Niranjan Kaur.

(37) The testimony of Mahinder Lal Chawla further shows that the back of the bank draft in question certified copy of which is Ext. PI. already bore a signature which' purported to he that of Niranjan Kaur and subsequently the words 'Please pay Chawla Stores were written on the back of the demand draft but this was done in his presence. He has further stated that he sent this draft to the Central Bank of India, Khan Market Brunch whereafter, the cheque No- 053684 dated 22-11-1973. drawn on the said bank. which was a bearer cheque in the name of Niranjan Kaur. was signed by' him and that this cheque was for Rs.. 41,270.00 after deducting a sum of Rs. 265.00 as bank's commission and that the signatures of Mr. Ganesh appear on the back of the said cheque. The original pay-in-slip which is Ext. Public Witness 4/B in the criminal case mentions the initials 'B.P.' which mean 'Bill Purchase' which term in bank-mp parlance means that the seller/presenter i.e. Chawla Stores asked, the bank to purchase the said demand draft and to give immediate credit for the value thereof without waiting for the proceeds of the same to be collected through inter-bank clearing. Chawla Stores presented this draft to the Central Bank of india. Khan Market Branch, New Delhi, for purchase and the said bank purchased, it and gave Immediate credit to the account of Chawla Stores for the value of the draft after charging their commission to the tune of Rs. 2651.00 and deposited the sum of Rs. 41,270.00 in the current account of Chawla Stores which was with this bank, and this bank sent this draft in routine and not by special clearing to Punjab National Bank, Regal Building for its proceeds and the draft was honored-by Punjab National Bank.

(38) The draft having been purchased and the Credit' thereof having been given to the account of Chawla Stores, Chawla Stores drew the above mentioned cheque no. 053684 dated 22-11-1972 in favor of 'Niranjan Kaur or bearer' for Rs. 41,270.00 which ostensibly represented the proceeds of the draft that bad been purchased by the Central Bank minus the bank commission of Rs. 2651-. This cheque for Rs. 41,270.00 issued by Chawla Stores was encashed by defendant No. 2 R. Ganesh whose signatures appear on the back of the cheque in token of its encashment by him.

(39) At the time of filling up the pay-in-slip in respect of the demand draft in the Central Bank of India, Khan Market Branch, New Delhi Mahinder Lal Chawla gave a letter of guarantee to the said bank for the discharge of the said bank draft allegedly endorsed by Niranjan Kaur plaintiff as genuine and thereby further indemnified the said bank against all expenses and charges which the bank might incur or .sustain under this guarantee in order to obtain payment of the said bank draft. This original guarantee letter is Ext. Public Witness 4/A in the criminal case record (certified copy Ext. P1/A) (there were two documents which were both marked as Ext. P1 but now this document has been marked as Ext. P1/A). About this guarantee Mahinder Lal Chawla. in his cross-examination stated that defendant no. 2 did not tell him that while encashing ibis draft he would have to give some guarantee to the hank bit he was told about this by the bank.

(40) Now, the question which arises for consideration is whether defendant No.3, through its proprietor Mahinder Lal Chawala, did all this in an honest and bona fide belief on the representation of R. Ganesh defendant No.2 or he was in conspiracy with R. Ganesh. This is no doubt quite a difficult question to resolve. The learned counsel for defendant no. 3 contended vehemently that Mahinder Lal Chawla acted honestly and in good faith and had returned the amount of the draft in question after deducting the bank's commission of Rs. 265.00 by issuing cheque no. 053684 dated 22-11-72 drawn on the Central Bank of India, Khan Market Branch in the name of plaintiff Niranjan Kaur or bearer and had handed over the same to defendant No. 2 R. Ganesh who encashed the same and that defendant no. 3 did not get anything as a result of this transaction. On the other hand. It was urged by the learned counsel for the plaintiff that there are certain circumstances which would go to show the illegal complicity of defendant no. 3 in this transaction in conspiracy with defendant no. 2 R. Ganesh. He has pointed out that Mahinder Lal Chawla proprietor of defendant no. 3 Chawla Stores gave his guarantee to the Central Bank of India, Khan Market Branch, New Delhi in respect of this bank draft which was in no small amount but was for a sum of Rs. 41,535.00 and that too when the plaintiff Niranjan Kaur alleged client of defendant No. 2 was never seen by Mahinder Lal Chawla nor the alleged endorsement purporting to be made by Niranjan Kaur on the back of the demand draft was made in his presence. Giving thoughtful consideration to the respective contentions of the learned counsel for the plaintiff and the learned counsel for defendant No. 3, the contention of the learned counsel for the plaintiff appears to be more forceful .and sound, as no person with reasonable prudence is expected, to take such a big risk as Mahinder Lal Chawla took in this case as pointed out above by the learned counsel for the plaintiff in the matter of giving his personal guarantee to the Central Bank of India, Khan Market Branch when the draft was presented by him to this bank for its purchase by the bank, especially when he had never met or seen Niranjan Kaur. This conclusion would be quite reasonable to infer especially when there was hardly any special relationship or course 'of conduct between the two so as to induce or persuade Mahinder Lal Chawla to go through this hazardous exercise. The statement of Mahinder Lal Chawla (D3WI) would go to show that his shop is inside Ambassador Hotel since 1948 and that he knew L. Ram Parshad Managing Director of that Hotel and defendant No. 1 was a sister concern of that hotel and defendant no. 2 was, working with L. Ram Parshad since about 1970 as his Personal Assistant and Confidential Secretary and on 22-11-1972 R. Ganesh approached him and told him that he had to purchase five tickets of Lufthansa on behalf of his client and as such requested him to help him to encash the bank draft in question which be had with him. But initially he (Chawla) was reluctant to do so. He, however, agreed to do so when R. Ganesh persisted in -persuading him to do so as he (Chawla) could earn some commission in the encashment of the draft and R. Ganesh would get commission on the tickets and further that R. Ganesh told him that he would give a receipt and guarantee bond to indemnify him which he did the form. of the letters Exits. D3W1/1 to D3W1/3 already referred to above. It would, however, be seen that Mahinder Lal Chawla was not paid any commission whatever and the sum of Rs. 265.00 which he deducted from the draft amount was only the bank's commission which the bank charged for the purchase of the draft. Regarding his relationship with R. Ganesh, Mahinder Lal Chawla stated that R. Ganesh was his customer and he used to take goods on credit and often signed in his presence, in his cross- examination by the plaintiff he stated that he never had any transaction like the one in suit with R. Ganesh nor he lent any money to him in cash prior to the transaction of this suit and that R. Ganesh never told him that he would pay him commission in the sum of Rs. 2001- for the encashing of the draft but paid him commission to the tune of Rs. 265.00 and that commission was charged by him (Chawla) in accordance with bank's rule and this commission was to be paid to the bank and that he himself did not keep any share out of that amount for himself and, thus, he did not -obtain from R. Ganesh any amount by way of his own commission. Regarding Niranjan Kaur he stated that R. Ganesh had given him the addresses of Niranjan Kaur both of Chandigarh and of Canada but he had no talk with Niranjan Kaur nor did he contact her, nor he knew her. nor he was aware in what transaction Niranjan Kaur was the client of R. Ganesh. He further stated that he never tried to contact Niranjan Kaur nor he did get the Signatures of Niranjan Kaur on the bank draft or any other letters purporting to bear her signatures from anybody except from defendant no. 2. He also stated that the cheque which he gave to defendant no. 2 was a bearer cheque though it was in the name of Niranjan Kaur and that he did not ask defendant no. 2 R. Ganesh to bring Niranjan Kaur before him so that he could give the cheque to her So, the entire exercise of the encashment of the draft in question by Mahinder Lal Chawla was without any monetary consideration by way of commission and for no exceptional or special regard for R. Ganesh. but A appears to be the resuit o a conspiracy between Slim and R. Gaesh defendant No. 2, and the abovementioned documents Exts. D3W1/1 to D3W1/3 given by R. Ganesh to Mahinder lal Chawla and the issuance of the bearer cheque no. 053684 drawn on Central Bank of India Khan Market et Brunch by Mahinder Lal Chawla in favor of 'Niranjan Kaar or bearer and the handing over of the same by him to R. Ganesh who encashed the same, appear to be only safely valves devised by Mahinder Lal Chawla to save his own skin from the vulnerability of the conspiracy hatched between the two end in this connection it may be noted that 'She entire exercise was done on one day, i.e. 22-11-1972 as all the three documents Exts. D3W1/1 to D3W1/3 given by R.Ganesh to Mahinder Lal Chawla as also the bearer cheque no. 053694 given by Mahinder Lal Chawla to R. Ganesh were of the same date, i.e. 22-11-1972, and the making of the entries Exts. D3W114 and D3W1/5 in its ledger and cash book respectively regarding this transaction is immaterial lor the reason that Mahinder Lal Chawla figured. without .any chance of disappearance in the bank's records. It has already been found under issue no. 5 that the endorsement on the back of the bank draft had not been made by the plaintiff Niranjan Kaur and so necessarily it was forged by defendant No. 2 R. Ganesh in conspiracy with Mahinder Lal Chawla.-

(41) In view of the aforesaid discussion, all these issues are decided accordingly in favor of the plaintiff. Issue NO. 13

(42) The demand draft in question of which the plaintiff was the holder was in the sum of Rs. 41,535.00 and the plaintiff is obviously entitled to this amount from all the defendants and this issue is decided in favor of the plaintiff. Issue NO. 14

(43) Regarding interest the plaintiff has claimed it at the rate of. 9 per cent per annum on the draft amount of Rs. 41,535.00 up to the date of the suit. The rate claimed is very reasonable and the plaintiff is entitled to the same. The bank draft in question is dated 18-11-1972 and was dispatched to defendant no. I on the same day by the plaintiff. The suit was filed on 12-8-1975. Thus, the total amount of interest calculated on the draft amount of Rs. 41,5351- at the rate of 9 per cent per annum for the period froml8-11-1972 to 12-8-1975 comes to Rs. 10,2151- and the plaintiff is entitled to this amount on account of interest. Issue NO. 15 (Relief)

(44) In view of the above findings, I pass a decree for the recovery of a sum of Rs. 51,750 with costs as also with future interest at the rate of 9 per cent per annum from the date of the suit till realisation to be calculated on the principal sum of Rs. 41,535.00 in favor of the plaintiff against the defendants.