P. B. MUKHARJI, J.

( 1 ) THIS suit is concerned with the effect of what may be called a contract in the nature of a fidelity bond or a guarantee. One Rajani Kanta Pal, since deceased, signed a bond with the Comilla Banking Corporation Limited now amalgamated with and represented by the United Bank of India Ltd. By this bond dated 8-8-1944 Rajani, in consideration of the appointment of his relation, the second defendant Nishikanta Pal, to the post of a cashier and in consideration of the security for the due discharge of Nishikanta's duties, executed as guarantor the security bond for Rs. 10,000/- for himself, his heirs, executors and assigns.

( 2 ) THIS suit is brought by Radha Kanta Pal, son of Rajani who died on 18-4-1945. In this suit the plaintiff claims against the Bank the 31/2 per cent. G. P. Note of 1900 No. 390435 for Rs. 5000/- and also another 31/2 per cent. G. P. Note of 1865 No. CA-010581 for Rs. 5000/ -. These Government Promissory Notes were deposited with the Bank by Rajani as security under the said security bond. The plaintiff also claims interest on the first Government Promissory Note from 24-4-1939 and on the Second promissory note from 21-2-1944. There is an alternative claim for the sum of Rs. 10,000/- being the value of these two Government Promissory Notes and for the sum of Rs. 2289-1-6 being the interest at the rate of 31/2 per cent. per annum from the dates that I have just mentioned.

( 3 ) THE basis of the plaintiff's claim is that the services of Nishikanta Pal were terminated on 4-12-1946, but the deposit money in the shape of the Government Promissory Notes has not been returned to the plaintiff.

( 4 ) THE defence of the Bank is that Nishikanta is responsible for shortage of the Bank's cash amounting to Rs. 8,800/- and the 'bank is therefore entitled to deduct that money out of the security deposit. The plaintiff's allegation is that neither Rajani nor he had any knowledge of the defalcation or breach of duty committed by Nishikanta and that the Bank gave no notice to either of them about any such defalcation or breach of duty. In the plaint the plaintiff expressly says that he does not admit that Nishikanta had made any shortage in cash. He also contends that in any event he is not liable for such defalcation or shortage, if any, caused by Nishikanta Pal.

( 5 ) THE defendant Bank in its written statement after setting out the terms of the security bond pleads that Nishikanta by serving as a cashier was found to be responsible for shortage of two sums of money, one of Rs. 600/- on 15-8-46, and the other of Rs. 8,200/- on 28-11-1946. The Bank also pleads that the defendant Nishikanta wrongfully on the breach of the terms of his appointment left his post as cashier on 4-12-1946 without any notice, and failed to pay or make good the said sum of Rs. 8,800/- in spite of demands. The Bank's case is that it has adjusted the sum of Rs. 5286-15-10 against the said sum of Rs. 8,800/-, This sum of Rs. 5286-15-10 is the proceeds of the conversion of the Government Promissory Note No. CA-006473 and the balance still payable by the defendant Nishikanta is Rs. 3513-2-0 for which the Bank claims to be reimbursed out of the other G. P. Note as security deposit and the sum of Rs. 306/- being the surrender value of the insurance policy of Nishikanta and a further sum of Rs. 294-14-3 being the outstanding balance of the provident fund of the defendant Nishikanta which are kept in the suspense account.

( 6 ) THE defendants to this suit are first the Bank and secondly Nishikanta Pal. The defendant Nishikanta Pal has not entered appearance and is not defending this suit. Defendant Nishikanta Pal is the nephew of the plaintiff being the son of the plaintiff's paternal uncle's daughter.

( 7 ) THE following issues were settled by this Court and accepted by learned counsel on either side: (1) Was the defendant Nishi Kanta Pal responsible for the shortage of the sum of Rs. 8,800/- belonging to the Comilla Banking Co

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