This Court delivered the following:-

JUDGMENT

Heard Sri V.Sethu Madhava Rao, learned counsel representing

Smt. V. Dyumani, learned counsel for the appellant – Defendant No.3

and Sri R.Anurag, learned counsel appearing for respondent No.1 –

plaintiff.

2. This appeal has been dismissed against defendant No.2 –

respondent No.3 herein vide order dated 28.11.2024 in I.A.No.1 of

2024.

3. The present appeal is filed challenging the judgment and

decree dated 12.03.2001 passed in O.S.No.655 of 1981 by the learned

II Senior Civil Judge, City Civil Court, Hyderabad, whereby the suit

filed by 1st respondent herein against the appellant herein and others

was decreed for Rs.8,74,815/– (Rupees Eight Lakhs Seventy Four

Thousand and Eight Hundred and Fifteen Only) with an interest @

10% per annum from the date of suit till the date of realization of the

amount and costs, fastening joint and several liability upon the

appellant herein and - Defendant No.1.

(For the sake of convenience, parties hereinafter are referred to

as in the suit i.e. Plaintiff’ and ‘Defendants/D.1, D.2, D.3’)

4. The plaintiff had filed the aforesaid suit against defendants

contending that it is a Provident Fund Trust which manages and

invests the provident fund contributions of APSRTC employees. The

provident fund of the employees of RTC will be deposited with the

plaintiff, for payment to the employees on their retirement or on other

occasions under the Rules governing the Provident Fund Trust. The

plaintiff, instead of keeping the amounts in the bank, invested part of

the available funds from time to time in various government and other

securities.

5. It is further contended that the plaintiff had proposed to

invest about Rs.7,20,000/- or more for purchase of 6 ½ % of APSEB

Bonds, 1988. D.2, a share and stock broker, addressed a letter dated

25.05.1979 to the plaintiff stating that he was prepared to sell 6 ½% of

the said bonds at the rate of Rs.101.45. Pursuant to the said offer, the

plaintiff sent a letter dated 28.05.1979 expressing its intention to

purchase the said bonds for a face value of Rs.7,20,000/- (actual

amount of Rs.7,30,440/-) and asked D.2 to take necessary steps to

make available the said securities immediately through State Bank of

Hyderabad, Chikkadapalli Branch i.e. D.1.

6. It is also contended by the plaintiff that similar letter dated

28.05.1979 was sent to D.1 stating that it had purchased 6½ % of the

aforesaid bonds at Rs.101.45 ps, for an amount of Rs.7,30,440/-

inclusive of brokerage charges through D.2 and requested D.1 to debit

plaintiff’s account with a sum of Rs.7,30,440/- or such sum as advised

by D.2 and complete the transaction. The normal practice of D.1 was

to send the draft to D.3 specifying the purpose for which the amount

covered by the draft was sent and obtain a bank receipt from the

receiving bank to the effect that the amount sent under the draft is

earmarked for the purpose for which it was sent.

7. D.1 had issued a draft No.A-843833, dated 11.06.1979 for

Rs.7,35,908/- in favour of D.3. Instead of sending the said draft

through its own employees with covering letter, D.1 had sent the bank

draft with a covering letter through D.2 to D.3. D.1 did not even take

measures to immediately obtain the bank receipt from D.3.

8. It is further contended that it is not known whether D.2 gave

the covering letter issued by D.1 to D.3 or in what manner D.2

instructed D.3 to deal with the amount covered by the said draft. D.3

is stated to have credited the amount covered by the said draft to the

credit of D.2 and informed D.1 that the account of D.2 did not have

sufficient balance for payment towards the Banker’s receipt. The

plaintiff issued letters from time to time to D.1 and 2 to complete the

transaction, but it did not bear any result.

9. It is further contended that D.1 sent a letter dated 03.07.1979

to D.3 stating that D.2 cannot be a holder of the funds covered by the

draft and even otherwise, D.3 is well aware of the course of

transac