- (1.) This suit has been filed by the Plaintiff, a share-dealer and stock-broker originally against Hindusthan Commercial Bank Ltd., hereinafter referred to as the Defendant bank and one R.N. Ghosh alias K.K. Ghosh for the recovery of loss and damages suffered due to delivery of stolen shares to the Plaintiff.
(2.) The relevant facts are these: The Plaintiff, a stock-broker, who was carrying on business under the name and style of 'Shree Kissen & Company' since 1949. His father Rajani Kanta Mitra, who was an employee in the Security Department, of the then Imperial Bank of India, looked after the business of his son, the Plaintiff, after his retirement in or about 1950. In course of the business of the Plaintiff his father through his close friend one Khagendra Nath Banerjee alleged to have entered into contracts for purchase of a large number of shares, from the Defendant No. 2, R.N. Ghosh. It is alleged that the Plaintiff or his father never had any direct, contact with R.N. Ghosh, but negotiations took place through K. N. Banerjee as a sub-broker, who was an employee of National Soap Company, a school-mate and lifelong friend of the Plaintiff's father. It is also alleged that, as it was agreed that all the deliveries of shares sold by R.N. Ghosh would be made through a scheduled bank, the Plaintiff's father was satisfied as to the bona fide of the said transactions. Thereafter, the Plaintiff issued several contracts in favour of R.N. Ghosh in respect of various shares purchased from him by the Plaintiff's firm from time to time and handed over the said contracts to the sub-broker Khagendra Nath Banerjee., The said contract notes are exhibits in this suit. Thereafter, between May 15, 1951, and June 7, 1951, various bills made out by the Defendant No. 1, Hindusthan Commercial Bank Ltd., from its Bhowanipur branch together with the relative shares scrips and blank transfer deeds were delivered to the Plaintiff and payments were received by the Defendant bank. The said bills described the Defendant No. 1 as a creditor to the. Plaintiff and also it was written that the said bills were made in the account of R.N. Ghosh. Thereafter, it was discovered that the said shares together with other shares were lost from the custody of the United Bank of India, Russa Road branch, during the year 1950-51 at which R.N. Ghosh was employed as a clerk. It is an admitted fact that criminal proceeding was started against R.N. Ghosh and others in respect of theft of the said shares together with other shares and ultimately on April 15, 1954, R.N. Ghosh was convicted. In the meantime, United Bank of India gave notice to the Calcutta Stock Exchange and also sent circulars to all bankers in Calcutta informing that various shares described in a list attached thereto were lost from their custody and put on guard all persons dealing with the said shares. The Plaintiff also came to know from the notice board of the Calcutta Stock Exchange about the stolen shares and, as the said shares were immediately resold by the Plaintiff- in the market to various brokers in the Stock Exchange hall and all such deliveries became bad, the Plaintiff refunded the prices of the shares to the respective buyers. Some shares were seized from the Plaintiff's custody and the other shares were seized from the custody of his ultimate buyers.
(3.) On May 7, 1954, the Plaintiff instituted this suit against the Defendant No. 1, Hindusthan Commercial Bank Ltd., and the Defendant No. 2, R.N. Ghosh alias R.K. Ghosh. It is alleged that the Plaintiff has not been able to serve the Defendant No. 2 and as such the suit is now only against the Hindusthan Commercial Bank Ltd. The Plaintiff's case in the plaint, so far as the Defendant No. 1 Hindusthan Commercial- Bank Ltd. is concerned, is, in substance, that by presentation of the bills in respect of various shares together with the relative share certificates and blank transfer deeds between May 15, 1951, and June 7, 1951, the Defendant bank induced and requested the Plaintiff to pay off and take, delivery of the said shares thereby representing to the Plaintiff and expressly and/or impliedly warranted that the said shares were good for delivery and the Plaintiff would enjoy quiet possession of the said shares and the Defendant No. 2 R.N. Ghosh had lawful right or title to the said shares. The Plaintiff acted on such representations and made payments in respect thereof to the Defendant No. 1, but subsequently it transpired that the said shares were stolen shares and the Plaintiff had to refund a total sum of Rs. 68,500-10-0 to the various buyers of the said stolen shares. The Plaintiff claimed the said sum paid as prices of the said shares from the Defendant bank alleging tortious, illegal, wrongful and fraudulent acts on the part of the Defendant bank and R.N. Ghosh whereby the Plaintiff had been deprived of the quiet possession and enjoyment of the said shares. It is to be noted that in the plaint the Plaintiff has made a claim against the Defendants jointly or severally' in para. 22 of the plaint and the decree asked for relief against both the Defendants in prayer (b) of the plaint. The Defendant bank denied the allegations in the plaint and the main contention of the Defendant bank is that they acted as a mere banker and relationship between R.N. Ghosh and the Defendant bank was that of a banker and customer, i.e. principal and agent, and as there was no privity of contract between the Plaintiff and the Defendant bank, there cannot be any liability or obligation to pay for any wrongful act of the Defendant No. 2, R.N. Ghosh. The Defendant bank denied any knowledge that the shares were stolen shares and that R.N. Ghosh had no title to those shares.;