Rampur Engineering Co. Limited vs United Construction Co. And Ors.
2001 Latest Caselaw 1657 Del

JUDGMENT

J.D. Kapoor, J.

1. This is a suit for recovery of Rs. 9,50,000/- filed by the plaintiff, a public limited company registered under the Companies Act through its managing director Shri Rajender Kumar Gupta.

2. Case of the plaintiff is brief is as under: That sometime in the year 1978-79, the plaintiff was awarded a contract for construction and erection of the Coal Handling Plant at Kota Thermal Power Station under the auspices of Rajasthan States Electricity Board, Kota; that in furtherence of the said contract the plaintiff invited offers from the various civil contractors including defendant 1 for completion of civil work for said plant and defendant 1 sent its offer dated 28.12.1979 and that the said offer of defendant 1 was accepted by the plaintiff vide its letter dated 27.2.1980.

3. It was agreed that defendant No. 1 would execute the work in accordance with the terms and conditions and technical specifications given in Annexures 1 and 2 of the said letter and would take the whole responsibility of maintaining quality work to the entire satisfaction of the said Board and the plaintiff. The contract price of the said order worked out to Rs. 94,96,925.00 and the plaintiff was obliged to pay an advance of 10% of the said contract Bill subject to the defendant No. 1 furnishing bank guarantee of equal amount. It was obligatory upon defendant 1 to mobilise all its equipment, supervisory staff and labour power before 15.3.1980 and to complete the work within the stipulated time.

4. On or about 26.3.1980 three bank guarantees for Rs. 4 lacs, 3 lacs and 2.5 lacs were executed by defendant No. 2 for and on behalf of defendant No. 1 in terms of the aforesaid contract in favor of the plaintiff's bankers and defendant No. 3 and as part of its obligation plaintiff issued a cheque for Rs. 9,49,692.00 dated 5.4.1980 towards advance of 10% of the contract value. During the execution of the work the plaintiff made part payment of Rs. 6,55,000.00 till May 1981 to defendant 1 besides aforesaid amount of Rs. 9,49,692.00 and on finding that the work was totally unsatisfactory and beyond the acceptable limits of the Board and the standards of the plaintiff, defendant No. 3 on behalf of the plaintiff requested defendant No. 1 to extend the validity period of the bank guarantees vide letter dated 23.3.1981 and in view of the fact that defendant 1 had yet not fulfillled their commitment under the said bank guarantees, the defendant No. 3 requested defendant No. 2 to extend the period of guarantees for the period equal to the period defendant 1 would take in fulfillling their commitments or in the alternative to treat this letter as notice of invocation of bank guarantees and remit the guarantees amount to the defendant No. 3 by 26th instant.

5. In spite of this letter defendant No. 2 neither extended the validity period nor remitted the amount and at the request of plaintiff, defendant 3 sent reminder dated 17.4.1981. In spite of several reminders and demands made by the plaintiff and defendant No. 3 to get either the bank guarantees extended or remittance of the amount the defendant No. 2 failed to do so. Hence this suit.

6. In the written statement, defendant No. 3 admitted having sent letter dated 21st of March 1981 and also a reminder dated 17.4.1981 to defendant No. 2. According to defendant 3 since guarantees were invoked well within time, it is not liable to pay any claim. It is further averred that the letter of claim was sent under certificate of posting on 23rd of March 1981 and once the Bank was holding the certificate of posting the post office becomes the agent of the addressee.

7. According to defendant No. 2 there was no privity of contract between it and the plaintiff and therefore no cause of action is available against defendant No. 2. Further that defendant No. 2 is in no way connected with the liabilities inter se plaintiff and defendant No. 1 and/or plaintiff and defendant No. 3 and since the plaintiff is not a party to the bank guarantees, obligation, if any, of the defendant No. 2 was only towards defendant No. 3. Defendant No. 2 has also denied having validity period of the bank guarantees and also denied that the bank guarantees were in favor of the plaintiff. According to it defendant No. 3 was only the beneficiary of the bank guarantees and the said letter dated 21st of March 1981 allegedly posted on 23rd of March 1981 was never received by defendant No. 3 and as such question of extending the validity period of remitting the amount never arose. At the same time defendant No. 2 has taken the plea that the said letter did not invoke the bank guarantee and was, therefore, malis juris. In the same breath it has taken the plea that the period of the bank guarantees could not have been extended at the asking of defendant 2. Even otherwise to say that defendant No. 3 has received only letter dated 13.4.1981 is an attempt to cover up the posting of the letter purporting to have been sent on 23rd of March 1981 but the fact is that the letter was never sent nor was received by defendant No. 2. It is further pleaded that the bank guarantees expired by efflux of time.

8. The defense set up by defendant No. 1 in the written statement in short is that the work was lastly executed on or short is that the work was lastly executed on or about 3rd week of March 1981 and the defendants made payment up to 25th January 1981 for the value of Rs. 6,05,000.00 and Rs. 50,000-00 were paid in cash on or about 3rd week of March 1981 and thereafter no work was executed nor any payment was made by the defendant No. 3 and as per agreement the plaintiffs were to make available requisite drawings/designs according to which the work was to be executed. They were also obligated to make available requisite site and monthly running payment of the work executed. Since the plaintiff failed to discharge its obligations in respect of availability of site, drawings/designs and running bills as per agreement within stipulated time, defendant No. 1 intimated that the stipulated time has expired and therefore for further work payment at revised rate is to be made and the same be decided by 15th of March 1981.

9. Certain negotiations were conducted and ultimately defendant No. 1 suggested the name of Shri C.P. Malik, retired Director General of Work, CPWD for appointment as Arbitrator and the plaintiff suggested Shri G.R. Ambwani, the then Chief Engineer, MCD vide letter dated 1.10.1981. The defendant No. 1 claimed damages due to loss suffered on account of breach committed by the plaintiff and when talks of arbitration were in progress defendant No. 1 had realised that huge amount was payable to the defendant No. 1 against the aforesaid contract partly for work done and partly due to damages as defendant No. 1 crew and machinery remained idle due to plaintiff's breach. The plaintiff was neither equipped to discharge their obligations nor were financially capable to liquidate the payment as per agreement of work executed inter alia.

10. Defendant No. 1 submitted the bills as referred to in para 11 of the written statement which according to it were never refused by the plaintiff. As regards the bank guarantees, it is averred that since certain amount was to be paid, defendants 1 and 2 had not been asked for encashment as the same expired on 26th of March 1981. The only letter received by defendant No. 1 was dated 18th of April 1981 seeking only for extension of time and that too after their expiry. It was revealed that the plaintiff had not deposited the tax deducted at source against the four running bills with the Income Tax Authorities and that is why certificate has not been issued. The original bill submitted by defendant No. 1 are still in the custody of the plaintiff whereby deduction was effected. Neither the Board nor the plaintiff ever complained either to the quality of the work or deficiency of structural specifications rather the Electricity Board was satisfied with the execution of the work.

11. It is admitted that as per agreement the advance was recoverable at the rate of 10% against each running bills and against the aforesaid four running bills. Thus the said mobilisation amount was paid by the plaintiff in terms of the contract, the plaintiff started recoveries of the said amount which was not part of the contract. It is further averred that the plaintiff paid only Rs. 6,55,000.00 by March 1981 against the due payment for which the bills were furnished and thus it is defendant No. 1 who is to recover the amount from the plaintiff.

12. As to the invocation of the bank guarantees or their extension defendant No. 2 has averred that neither plaintiff nor defendant No. 3 ever approached defendant No. 2 or defendant No. 1 to extend the bank guarantees or invoke the same within the validity period. For the first time defendant No. 2 was approached in this regard on 18th of April 1981 when the bank guarantees had already been discharged and their validity had expired.

1. Whether the suit filed is barred by time?

2. Whether the plaint has been signed and verified and suit instituted by a duly authorised person?

3. Whether there has been any misjoinder of cause of action?

4. Whether the bank guarantee was properly invoked within time by defendant No. 3? If not, its effect.

5. Which defendant is liable to the plaintiff for the suit amount?

6. Whether the plaintiff is entitled to any interest? If so at what rate, for what period and against which defendant?

7. Relief.

13. All the issues are being taken up together as the arguments were addressed mainly on issues Nos. 4 & 5 around which the fate of the suit revolves.

14. Mr. A.B. Dial, the learned counsel appearing for defendant No. 3 has contended with vehemence that in the entire plaint the plaintiff has not disclosed any cause of action against the defendant No. 3 and, in fact, the tenor of the plaint shows that the plaintiff is supporting and relying upon the acts of defendant No. 3 of any negligence or breach of trust as a banker or agent and, in fact, in para 22 of the plaint the plea of the plaintiff is "that defendant No. 3 is under an obligation to re-imburse the said amount to the plaintiff after having recovered the same from defendant No. 2 and as such the same has been imp leaded as necessary and proper party to the present suit."

15. Mr. Dial further contended that averments in plaint show that the plaintiff orally requested defendant No. 3 to write to defendant No. 2, which defendant No. 3 did. Plaintiff also admits that the letter written by defendant No. 3 was received by defendant No. 2 and that in spite of request of defendant No. 3, defendant No. 2 did not extend the guarantee nor did it pay the amount.

16. Mr. Dial has relied upon the admission of the plaintiff that defendant No. 3 sent several reminders to defendant No. 2 but defendant No. 2 did not remit the amount and the plaintiff never served any demand on the defendant No. 3 at any point of time making any claim against the defendant No. 3. The only allegation in the plaint is that defendant No. 3 is bound to pay after having recovered the same from defendant No. 2 and for this reason alone defendant No. 3 is bound to pay after having recovered the same from defendant No. 2 and for this reason alone defendant No. 3 has been imp leaded. It was further contended that in the evidence of the plaintiff by way of examination-in-chief of PW 1, Shri Rajender Kumar Gupta, not an iota of allegation of any negligence of breach of trust or 'liability has been made against the defendant No. 3.

17. According to Mr. Dial, provisions of Order 6 Rule 4 and Order 7 Rule 1 Code of Civil Procedure require that specific particulars of the cause of action in case of breach of trust etc. must be pleaded and the causes of action should be distinctly stated against each of the parties whereas in the present case, in the entire plaint no such particulars or details of any alleged negligence or breach of trust have been stated.

18. Contention of Mr. Dial is that non-disclosure of the particulars with date and item leading to the allegation of breach of trust and willful default as required under Order 6 Rule 4 CPC as well as Order 7 Rule 1(e) CPC itself shows that the plaintiff had no grievance against defendant No. 3 at all and it was on second thought that too after the written statement was filed by the defendant No. 3 that these pleas were set up in the replication.

19. While canvassing the proposition that any plea taken by the plaintiff in the replication to which the defendants have no opportunity to reply inconsistent with the original pleading should be refused to be taken on record and if taken shall be liable to be struck off and taken off the file, learned counsel has relied upon Anant Constructions Pvt. Ltd. v. Ram Niwas wherein it was observed that a plea which is foundation of the plaintiff's case or essentially a part of cause of action of plaintiff, in absence whereof the suit will be liable to be dismissed or the plaint liable to be rejected cannot be introduced for the first time by way of replication.

20. Mr. Dial further contended that since there was no specific demand/instructions given in writing by the plaintiff to the defendant No. 3 as to what should defendant No. 3 do the defendant No. 3 was under no obligation whatsoever to invoke the bank guarantee on its own.

21. According to Mr. Dial the sole basis of allegation of breach or negligence or willful default is that instead of sending the letter of invocation by registered A.D. or by way of sending it though the messenger, it was dispatched through U.P.C. and therefore, the question that calls for determination is whether such a plea is a valid foundation of the plaintiff's case or not particularly when the plaintiff has not made any averments in this regard in the plaint itself and has for the first time raised these allegations in the replication. He has referred to para 24 of the plaint disclosing the cause of action against defendant No. 3 which is to the following effect:-

"That the cause of action arose on or about 26.3.1980 when the defendants 1 & 2 executed the aforesaid Bank Guarantee in favor of the plaintiff to the plaintiff's bankers, the defendant No. 3 which were to remain in valid till 26.3.81, it therefore arose on 25.3.81 when the said defendant No. 3 at the request of the plaintiff invoked the aforesaid Bank Guarantee and thereafter it arose on the various dates such as 13.4.81, 12.5.81, 15.5.81, 16.6.81, 23.6.81, 26.8.81 and 17.8.1981, 31.10.1981, 10.11.81 when the defendant No. 1 was called upon by the plaintiff and defendant No. 3 to remit the amount of the Bank Guarantee and the defendant No. 2 failed to pay any heed hence this suit."

22. Mr. Dial feels that the aforesaid averments show that the plaintiff remained silent against defendant No. 3 and it was so because the plaintiff had no grievance at all against defendant No. 3 and so much so the plaintiff never served notice of demand upon defendant No. 3 what to talk to alleging a case of breach of trust. The plaintiff never gave a written demand to defendant No. 3 instructing the defendant No. 3 that defendant No. 2 had failed to comply with the terms of the contract and consequently defendant should invoke the bank guarantee.

23. Thus in nutshell the contention of Mr. Dial is two fold. First that the principal parties to the contract were plaintiff and defendant No. 1 and no written instructions were given by the plaintiff to defendant No. 3 and in the absence of such directions defendant No. 3 cannot be saddled with any liability for non-compliance of the instructions or any kind of negligence or breach of duty, and therefore in the absence of such a proof, defendant No. 3 cannot be fastened with liability and cannot be held to have not complied with instructions of the principal.

24. Second there is no legal duty cast upon defendant No. 3 except to have sent his invocation letter and not necessarily by way of registered post only and therefore the act of defendant No. 3 in sending the said letter by way of UPC is sufficient compliance of the early instructions of the plaintiff.

25. Learned counsel for defendant No. 2 has laid the blame at the door of defendant No. 3. Mr. Sanjeev Bhandari, learned counsel for defendant No. 2 has advanced following contentions:-

(i) Admittedly, bank guarantees were valid up to 26th March. Claim of defendant No. 3 is based upon bank guarantees whereas in the replication, the plaintiff took an inconsistent plea by alleging that defendant No. 2 was negligent in not paying bank guarantee and on account of which plaintiff suffered a loss. Relief is based upon bank guarantees and therefore contention of the plaintiff with regard to negligence stands negated.

(ii) If at all, there is negligence, it is on the part of defendant No. 3 as defendant No. 3 has categorically admitted that such letters are sent through acknowledgement mode of delivery, such as registered post or through messengers but in no way by UPC. If at all there is presumption of service of certain letters if sent by UPC it stands rebutted by the denial of defendant No. 2.

(iii) D-3/W-2 Sh. B.S. Bisht, an officer of postal department has admitted that exhibit D-3 W1/1 is the proof of dispatch and not of the receipt by the addressee who is defendant No. 2. Since in the absence of invocation of bank guarantees defendant No. 2 is not liable as the bank guarantee had due to efflux of time expired. No negligence on the part of defendant No. 2 nor any inference can be drawn from the mode of dispatch of letter of invocation.

(iv) Lastly from 23rd March, 1981 to 26th March, 1981 neither defendant No. 1 nor plaintiff approached defendant No. 2 through any means with regard to payment of bank guarantees in spite of the fact that all the defendants are in Delhi and this shows negligence on the part of plaintiff.

26. However the objection of the counsel for the defendant No. 3 as to the want of pleading regarding the negligence of defendant No. 3 needs to be dealt with in brief. According to the learned counsel the plea of negligence has been raised for the first time in the replication and, therefore, is inconsistent with the plaint.

27. While enunciating the purpose and object of the pleadings Mr. Dial has placed reliance on Ram Sarup Gupta (dead) by Lrs v. Bishun Narain Inter College and Ors. wherein Supreme Court has held that "in the absence of pleadings, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleadings and that all necessary and material facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet".

28. In the replication no new fact was pleaded. All the relevant and material facts were pleaded in the plaint. What was pleaded in the replication was the reiteration or elaboration of already existing pleas of negligence and no new fact was introduced or pleaded which was not pleaded in the plaint.

29. The rule of pleadings is not to be strictly interpreted in a manner that each and every allegation should be brought out in the plaint. What is necessary is to plead all the material and relevant facts on which the case of the plaintiff stands. If the inference of negligence or carelessness is axiomatic merely because the mechanical repetition of words 'negligence' or 'carelessness' has not been made in the plaint does not mean that the pleading lacks in material particulars.

30. It is settled that the replication does form part of the pleadings and even if a new fact by way of elaboration or clarification is pleaded or divulged the objection that the facts or allegations are beyond pleading or that such a pleading is an after-though or is to fill up the lacuna is neither valid nor available.

31. In Ram Sarup's case (Supra) the Supreme Court has also observed that the pleadings should receive a liberal construction and no pedantic approach should be adopted to defeat justice on hair-splitting technicalities.

32. The Supreme Court further guided the courts that whenever the question of lack of pleading is raised the enquiry should not be so much about the form of pleadings, instead the Court must find out whether in substance the parties knew the case and the issues upon which they went to trial. Once it is found that in spite of deficiency in the pleadings parties knew the case and they proceeded to trial on those issues by producing evidence, in that event, it would not be open to a party to raise the question of absence of pleadings in appeal. Similar view was taken by the Supreme Court in AIR 1999 SCC 3029.

33. Now to say that the plaintiff's case is not based on the allegation of carelessness or non-pleadment of negligence on the part of the defendants is nothing but adopting a highly pedantic approach.

34. As to the objection of defendant No. 3 that the plaintiff has neither made an allegation nor disclosed any cause of action against defendant No. 3 in the plaint, it is settled law that even if there are no allegations by no means it mitigates the liability of a party. Reliance upon the acts of a party by no means abjures the party of its liability and the obligations.

35. The defendant No. 3 cannot absolve itself from the liability firstly because the defendant No. 3 being the banker of the plaintiff advanced the money to defendant No. 2, the banker of defendant No. 1, secondly, the bank guarantee was executed by defendant No. 2 on behalf of defendants 1 to 3 for the benefit of the plaintiff and thirdly it was to be invoked on the instructions of the plaintiff. The plaintiff requested defendant No. 3 to invoke the bank guarantee on 20th March, 1981 whereas the bank guarantee was valid up to 26th March, 1981.

36. When plaintiff approached defendant No. 3 on 21st March, 1981 the bank guarantee was still valid and alive. Defendant No. 3 did not send any communication to defendant No. 2 for invocation of the bank guarantee. Defendant No. 3 sent a letter under Postal Certificate on 23rd March, 1981. The defendant No. 3 is presuming that the said letter of invocation of guarantee must have been received by defendant No. 2 on 24th March, 1981 or latest by 25th March, 1981 but the defendant No. 2 has denied having received the same. Presumption of service of communication sent through UPC stands dislodged the moment the addressee denies its receipt.

37. Even if it is presumed that the said letter was duly served upon defendant No. 2 but the failure of defendant No. 3 in not taking any action against defendant No. 2 prior to 26th March, 1981 the liability of defendant No. 3 to reimburse or compensate the plaintiff for the loss suffered by the plaintiff would always remain there.

38. Apart from this the negligence of the defendant No. 3 is writ large as D-3/W-1 appearing for defendant No. 3 has in categorical terms admitted that normally letters of invocation of the bank guarantee are sent by registered post or through messenger whereas defendant No. 3 dispatched the letter by way of UPC. The defendant No. 3 has filed to have come up with the plausible explanation as to why did he not follow the normal procedure either by way of sending the letter through registered post or by way of messenger particularly when defendant No. 2 was situated in the same town.

39. Lastly defendant No. 3 has also to be saddled with a liability even if it is presumed that defendant No. 3 did invoke the bank guarantee in time as the defendant No. 2 did not pay the amount under the bank guarantee whereas it was incumbent upon the defendant No. 3 to take necessary steps for the recovery of the amount under the bank guarantee from defendant No. 2.

40. The main defense of defendant No. 3 is that since the guarantees were invoked well within the time by way of sending a letter under Certificate of Posting it is no more liable for any action. This itself is admission of the liability of the defendant No. 3 towards the plaintiff. Defendant No. 3 is under an obligation to compensate and re-imburse the said amount to the plaintiff irrespective of the fact whether it succeeds in recovering the same from defendant No. 2 or not. It is because of this liability of defendant No. 3 up to the plaintiff that defendant No. 3 was imp leaded as a necessary and proper party. Again the duty was cast upon the defendant No. 3 to request for extension of the validity period of the bank guarantee only on behalf of the plaintiff and also to invoke the bank guarantee.

41. As regards the liability of the bank with regard to the bank guarantee it is settled law that the beneficiary is entitled to invoke the bank guarantee strictly in terms of the bank guarantee as bank guarantee is an independent and distinct contract between the bank and the beneficiary. Where ever there is specified stipulation that the bank shall unconditionally and irrevocably pay on demand the amount of liability undertaken in the guarantee without any demur or dispute in terms of the bank guarantee there is no escape from the liability of the Bank to get its guarantee encashed by its beneficiary.

42. The Hon'ble Supreme Court has very lucidly laid down the law in respect of the bank guarantee in Ansal Engineering Projects Limited v. Tehri Hydro Development Corporation Limited and Anr. as under:-

"In terms of the bank guarantee the beneficiary is entitled to invoke the bank guarantee and seek encashment of the amount specified in the bank guarantee. It does not depend upon the result of the decision in the dispute between the parties, in case of the breach. Bank guarantee is an independent and distinct contract between the bank and the beneficiary and is not qualified by the underlying transaction and the validity of the primary contract between the person at whose instance the bank guarantee was given and the beneficiary. The underlying object is that an irrevocable commitment either in the form of bank guarantee or letters of credit solemnly given by the bank must be honoured. The court exercising its power cannot interfere with enforcement of bank guarantee/letters of credit except only in cases where fraud or special equity is prima facie made out in the case as friable issue by strong evidence so as to prevent irretrievable injustice to the parties. Otherwise the beneficiary cannot be restrained from encashing the bank guarantee even if dispute between the beneficiary and the person at whose instance the bank guarantee was given by the bank, had arisen in performance of the contract or execution of the works undertaken in furtherance thereof. The trading operation would not be jettisoned and faith of the people in the efficacy of banking transactions would not be eroded or brought to disbelief. The question, therefore, is whether the petitioner had made out any case of irreparable injury by proof of special equity or fraud so as to invoke the jurisdiction of the Court by way of injunction to restrain the respondent from encashing the bank guarantee."

43. Thus if the invocation of the bank guarantee is interfered by the court merely on the representation that there are disputes between the beneficiary and the person at whose instance the bank guarantee was furnished it is likely to erode the very trust and faith of the people in banking transactions. Unless the fraud or irretrievable injury is writ large on the transaction the bank guarantee should not be kept in abeyance or put in cold storage.

44. As regards the liability of the agent i.e. Bank it is also settled position that it is obligatory upon the Bank or agent to comply with the instruction of its principal in letter and spirit. There is no scope for negligence or carelessness and such a lapse on the part of the Agent is likely to cause irreparable loss or injury. This is why the agent is to be held liable for the loss caused to the principal on account of former's negligence and not complying with the instructions of the principal.

45. This doctrine of liability of the Bank or say agent has been dealt with in extenso in Punjab National Bank Limited, Lyallpur v. Diwan Chand and Ors. AIR 1931 Lahore 302(2). In the said case a Joint Hindu family owned among other properties certain mills in respect of which the family entered into an arrangement with a bank by which the bank allowed them a cash credit up to Rs. 60,000/- and took from them an equitable mortgage of the buildings and machinery of the said mills. By a clause in the agreement the family agreed to insure properties mortgaged for a sum of rupees 40,000/- and to assign and deposit the policy with the bank if so required. The property was not so ensured of some time. Subsequently the manager of the family wrote to the bank that he wanted to have his mills insured. The insurance was effected through the bank. The total amount for which the policy was taken out was one lac which included charge on building, on machinery and on some stock of wheat. The policy was made so as to make the assured according to its terms. The policy was renewed again for one year after it had lapsed. Subsequently the mills were leased to a third person and the wheat and wheat products on the premises did not belong to the family.

46. When the policy was again to expire, the manager of the family on being asked whether the policy was to be renewed wrote to the bank and the Insurance Company to renew the policy for one lac but as the wheat no longer belonged to him the whole amount of one lac was to be made a charge on the buildings and machinery. The Bank relied that the company had been asked to renew the policy as instructed and got the equitable mortgage registered. The manager was later on informed tat the policy was renewed and retained by the bank. Subsequently the mills caught fire and the building and the machinery were burnt. On investigation by the Insurance company it was found that the policy had been renewed on old terms.

47. It was in the face of the aforesaid facts that the Supreme Court held that :-

"The agent who negligently omits to comply with the clear instructions of his principal must be regarded as guilty of gross negligence and, whether the bank was acting as "a gratuitous agent" or not, is responsible to the plaintiff for any loss caused by that negligence."

48. Position of law regarding the liability of the Banker has been propounded in like this:-"Banker is bound to act according to directions given by the customer. In the absence of such directions, according to usage in the locality and applicable to matter in hand. Banker is also bound to use reasonable skill and diligence in his work, otherwise he will be liable for damages."

49. In view of the foregoing reasons, I find that the plaintiff has succeeded in establishing the liability of all the defendants up to it. As a consequence, the suit for recovery of Rs. 9,50,000/- together with cost and interest pendente lite and future @ 18% per annum is decreed in favor of the plaintiff and against all the defendants.