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1987 Supreme(Del) 335
High Court Of Delhi
NIRANJAN KAUR - Appellant
Versus
NEW DELHI HOTELS LIMITED - Respondent
Suit 517 of 1975
Decided On : 09/03/1987
Anil Mittal, ARUN MOHAN, M.S.Vohra, R.K.MAKHIJA, SANJIV SINDHVANI
Headnote:
NEGOTIABLE INSTRUMENT - DEMAND DRAFT - FORGED ENDORSEMENT - LIABILITY OF DRAWEE BANK - VICARIOUS LIABILITY - SCOPE AND EXTENT - SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881.
Fact of the Case:
The plaintiff purchased a flat from the defendant company and paid the price in installments. Two of the installments were due on 18-11-1972. The plaintiff purchased a demand draft for Rs. 41,535/- from the Punjab National Bank, Muktsar and sent it to the defendant company through registered post. However, the draft was not endorsed in the name of the defendant company. The draft reached the office of the defendant company and came into the hands of defendant No. 2, R. Ganesh, who was the Personal Assistant and Confidential Servant of L. Ram Parshad, the Managing Director of the defendant company. Defendant No. 2, in conspiracy with defendant No. 3, forged an endorsement on the back of the draft and presented it to the Central Bank of India, Khan Market Branch, New Delhi for collection. The Manager of this bank got the endorsement verified from defendant No. 3 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 defendant No. 3 with the Central Bank of India, Khan Market Branch. Defendant No. 3 issued a bearer cheque for Rs. 41,270/- in the name of the plaintiff and instructed the Bank to make payment in cash to defendant No. 2, and the amount was paid by the Central Bank of India, Khan Market Branch accordingly.
Finding of the Court:
The Court held that the plaintiff was entitled to recover the amount of the draft from the defendants. The Court found that the endorsement on the back of the draft was forged by defendant No. 2 in conspiracy with defendant No. 3. The Court also found that defendant No. 2 was acting within the scope of his employment as the Personal Assistant and Confidential Servant of L. Ram Parshad, the Managing Director of the defendant company. Therefore, the defendant company was vicariously liable for the fraudulent act of defendant No. 2.
Issues: 1. Whether the plaintiff was entitled to recover the amount of the draft from the defendants? 2. Whether the endorsement on the back of the draft was forged by defendant No. 2 in conspiracy with defendant No. 3? 3. Whether defendant No. 2 was acting within the scope of his employment as the Personal Assistant and Confidential Servant of L. Ram Parshad, the Managing Director of the defendant company?
Ratio Decidendi: The Court held that the defendant company was vicariously liable for the fraudulent act of defendant No. 2 because he was acting within the scope of his employment. The Court relied on the principle that a master is liable for the wrongful acts of his servant committed in the course of his employment, even if the servant acted fraudulently or dishonestly.
Final Decision: The Court passed a decree for the recovery of a sum of Rs. 51,750 with costs and future interest at the rate of 9% per annum from the date of the suit till realization to be calculated on the principal sum of Rs. 41,535/- in favor of the plaintiff against the defendants.
( 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 payement of the price thereof was to be made in instalments. Ail the instalments except two which were due on 18-11-1972 had been made. In respect of those two remaining instalments 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 instalments at its address, M/s. New Delhi Hotels Limited Ambassador Hotel, Sujan Singh Park, New Delhi. However, by mistake of the aforsaid 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 frauduilently and to misappropriate the same. The modus operandi adopted for this purpose was that on the reverse of the demand draft the following sridorsement 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 class=pno>>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 Markent 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 instalments, her husband made enquiries from the office of defendant N
