1954 (6) TMI 16 - HC - Indian Laws

Summary

Issues Involved:
1. Negligence by treasury officers in paying out sums of money.
2. Vicarious liability of the State for the negligence of its officers.

Issue-Wise Detailed Analysis:

1. Negligence by Treasury Officers:
The District Board of Bhagalpur sued the State of Bihar for the recovery of Rs. 18,925/5/6, alleging that the local treasury officers were negligent in paying out sums of money based on forged cheques. The cheques in question were purportedly signed by the Chairman of the District Board, but the signatures were forged. The treasury had issued a cheque book based on a forged requisition form and made payments under these forged cheques without verifying the signatures against the specimen signatures kept in the treasury. The court found that the treasury staff had failed to compare the signatures on the cheques with the specimen signatures, which was a gross negligence on their part. The evidence showed that the officers did not follow the required procedures, leading to unauthorized payments.

2. Vicarious Liability of the State:
The second issue was whether the State of Bihar could be held vicariously liable for the negligence of the treasury officers. The court examined various legal precedents to determine the extent of the State's liability. It was established that the State is not liable for the wrongful acts of its officers if those acts were performed in the discharge of statutory duties. The court referred to the principle that the government is not responsible for the misfeasance or negligence of its officers when they are performing duties imposed by law. The court concluded that the treasury officers were performing their statutory duties under the Bihar and Orissa Local Self-Government Act, and hence, the State could not be held liable for their negligence. The court also noted that the relationship between the government treasury and the District Board is not akin to that of a banker and customer, as the treasury does not engage in commercial activities for profit.

Conclusion:
The court dismissed the appeal, holding that while the treasury officers were negligent, the State of Bihar could not be held vicariously liable for their actions as they were performing statutory duties. The appeal was dismissed with costs.