1954 Supreme(Pat) 79

PATNA HIGH COURT
Narayan and B.P.Jamuar JJ.
District Board Of Bhagalpur
Versus
Province Of Bihar Through The Collector Of Bhagalpur
Appeal from Original Decree No. 390 of 1948 ;
Decided On : JUNE 22, 1954

Headnote:

Suit by District Board against State of Bihar for recovery of amount paid by treasury upon forged cheques. Negligence on part of officers of treasury. Liability of State of Bihar. Held, that the State of Bihar was not liable for the negligence of the officers of the treasury.

Fact of the Case:

The District Board of Bhagalpur sued the State of Bihar through the Collector of Bhagalpur for the recovery of a sum of Rs. 18,925/5/6 in circumstances presently to be stated. The learned Subordinate Judge dismissed the suit. The point raised in this appeal is of very considerable importance as it involves the examination of the question whether, if it be found that the officers of the Government attached to the local treasury were negligent in paying out certain sums of money belonging to the plaintiff District Board to the detriment of the plaintiff, the Government is liable to make good the loss as the master or the principal of the officers of the treasury.

Finding of the Court:

The learned Subordinate Judge was clearly right in finding negligence on the part of the officers of the treasury. There were examined at the trial two witnesses on the side of the defendant. The first witness was Tarkeshwar Prasad Mishra, who was working as the Sectional Clerk at the treasury during the relevant period, and the second witness was Padumjang Bahadur who was at the time Stamp Clerk at the treasury. The Sectional Clerk stated in his evidence in chief that it was his duty to deal with the cheques which used to be received at the treasury from the Bhagalpur District Board. Speaking about the cheque exhibit 6, the witness said that, when some one had gone to him with this cheque, it was after the treasury hours, and he told him that he would not accept the cheque and that he must bring the cheque next day along with an identifier. This cheque was then presented to him on the following day with an endorsement, exhibit 6 (h), from which he thought that the man bringing the cneque nad been identified by one Ugra Mohan Babu who was the Cashier at the District Board office. He was then satisfied that it was a genuine cheque. The man who handed over the cheque to rum gave out his name as Shambhu Saran Prasad. Having obtained his signature on the back of the cheque, he wrote out the words "Pay. T. O." and put his initials and date in red ink and passed it over to the Accountant, Babu Sitabi Sanu, for verification of the signature of the drawing officer. The Accountant afiixed the rubber stamp "To Imperial Bank of India" and put his initial and returned the cheque to him. Tne witness then entered it in the register of payment orders and took it to the Treasury Officer who signed the cheque as aiso the entry in the register of payment orders. The cheque was then made over to the party lor encashment from the Imperial Bank of India. The witness said that he followed the same procedure with regard to all the other cheques in question. The witness further explained that, after such a cheque is paid, the Imperial Bank sends an intimation the nexu day about the payment and then a posting is made in the District Board ledger account. The entries were accordingly made in the District Board passbook (exhibit 4) by the- witness himself.

Issues: 1. Whether the payments by the treasury upon the admittedly forged cheques, exhibits 6 to 6 (g), were made by reason of negligence on the part of the officers of the treasury, and 2. If that be so, whether the State of Bihar can be held to be vicariously liable for the negligence of the officers of the treasury.

Ratio Decidendi: The liability of a State to be sued for negligence of its servants first came up for consideration in the case of -- Peninsular and Oriental Steam Navigation Co. V/s. Secretary of State, 5 Bom HC App 1 (A). In this case, a servant of the Peninsular and Oriental Steam Navigation Company was proceeding in a carriage drawn by a pair of horses belonging to the Company and driven by a coachman in their employ. An accident occurred hear Kideerpore dockyard. Certain workmen in the Government employ were engaged in work there. The accident resulted in injuries to a horse belonging to the plaintiff, the Peninsular and Oriental Steam Navigation Company, by reason of the negligent conduct of these workmen, who were employed under the Government in connection with the dockyard at Kidderpore. It was an action in tort.

Final Decision: I am, accordingly, of the opinion that the suit was rightly dismissed. I would dismiss the appeal with costs.