Judgement

Appeal from a judgment and decree of the High Court in its appellate jurisdiction (February 5, 1912) reversing a judgment and decree of Beaman J. (July 24, 1911).

The suit was instituted in the High Court by the respondent, a banker, claiming to recover from the appellants Rs.1,23,769 as the balance due upon accounts between them. The appellants by their written statement contended that an item of Rs. 2 lakhs debited against them in the accounts was a fraudulent debit and did not represent a real transaction. They alleged that upon the accounts being properly taken there was a balance due to them, for which they counterclaimed.

The appellants case was that the Rs. 2 lakhs had been debited against them by means of fraudulent entries in the accounts of the appellants and the respondent, the transaction being carried out by one Dani, the respondents manager, and one Dwarkadas, the managing director of the appellant company. The circumstances under which the entries were made appear from the judgment of their Lordships.

The questions in the suit were wholly questions of fact and depended substantially upon the credibility of Dani as a witness on behalf of the respondent, and that of two witnesses on behalf of the appellants. Dwarkadas died before the trial took place.

Law Rep. 42 Ind. App. 110 ( 1914- 1915)

Bombay C otton Mfg. Co. Limited V. Motilal Shivlal 20

The trial judge was of opinion that the appellants witnesses were " absolutely truthful," but that Dani was " unscrupulous, untrustworthy, and untruthful." He found that the transaction was a deliberate fraud to which Dani was a party, and he referred the suit to take the accounts upon the basis that the debit of Rs. 2 lakhs should be excluded. In the result he made a decree in the appellants favour for Rs.1,17,633.

The High Court (the Chief Justice and Russell J.) reversed this decision and made a decree in favour of the respondent for Rs.1,01,295. The learned judges found that the appellants had failed to prove that Dani was a party to the fraudulent scheme; they accepted his denial and considered that the evidence on behalf of the appellants was inconsistent with the facts established.

Upjohn, K.C., and Dunne, for the appellants. The trial judge saw and heard the witnesses and his view as to their relative credibility, a view which was not inconsistent with the proved facts, should have been accepted The Alice (( 1868) L. R. 2 P. C. 245.); Montgomerie & Co. v. Wallace-Jones ([ 1904] A. C0. 73.); Khoo Sit Holt v. him Thean Tong.([ 1912] A. C. 323.) The evidence proves that Dani was a party to the fraudulent scheme.

Sir R. Finlay, K.C., Kenworthy Brown, and E. B. Raikes, for the respondent. The view of the Appellate Court upon the evidence was correct. Further the appellants are bound by the acts of Dwarkadas, their managing director. He had full powers to represent them, and the transaction fell within his general and ostensible powers.

The judgment of their Lordships was delivered by

SIR GEORGE FARWELL. This is an appeal from a judgment and decree of the High Court of Bombay in its appellate jurisdiction reversing a judgment of the High Court in its original jurisdiction. The question at issue is one of fact. The respondent is a banker and money-lender against whom personally no imputation is made ; his manager was one Dani. Dani was on intimate terms with one Dwarkadas, and Dwarkadas was for some years, until his death in August, 1909, agent and managing director of the appellant company, and of two other companies, the Tricumdas and the Lakhmidas; in 1908 the appellant was a flourishing and solvent company, and the two other companies were largely insolvent; and both were heavily indebted to the respondent for advances, to the amount of about 5 ½ lakhs. The respondent was pressing Dwarkadas for further and better security in respect of these sums, and also of other moneys advanced by the respondent to Dwarkadas personally; and Dani and Dwarkadas accordingly arra