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TMI Blog1963 (4) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant alleged that the coal had been supplied by the appellant not intending so to do gratuitously, and the respondent had enjoyed the benefit thereof, and so, the respondent was bound to make compensation to the appellant in the form of the value of the said Coal under s. 70 of the Indian Contract Act. The appellant's case was that since the said amount had to be paid to it at its Esplanade office in Calcutta, the original side of the Calcutta High Court had jurisdiction to entertain the said suit. Since a part of the cause of action had accrued outside the limits of the original jurisdiction of the Calcutta High Court, the appellant obtained leave to see under cl. 12 of the Letters Patent. In its written statement, the respondent admitted the delivery of the coal to the Bengal Nagpur Railway Administration and did not dispute the appellant's case that it had forwarded to the respondent bills in regard to the amount alleged to be payable to the appellant for the said supply. The respondent, however, pleaded that the contract on which the suit was based was illegal inasmuch as it had been entered into in contravention of the provisions of s. 175 (3) of' the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant's claim dismissed with costs, but their decision was based on different grounds. Bose J. held that the contract sued on was invalid and that the claim made by the appellant for compensation under s. 70 of the Indian Contract Act was not sustainable. He also found that the appellant's contention that the said contract which was initially invalid had been duly ratified, had not been proved. it is on these grounds that Bose J. came to the conclusion that the appellant's claim could not be granted. Incidentally, it may be added that Bose J., was not prepared to consider the plea of negligence which was raised by the respondent for the first time in appeal. Mukarji, J., who delivered the principal judgment of the Appeal Court agreed with Bose J. in holding that the contract was invalid and s. 70 was inapplicable. He, however, took the view that the said contract had been duly ratified and so, he proceeded to examine the question as to whether the appellant's claim was justified on the merits. On this part of the case, the learned judge took the view that even if both the appellant and the respondent. dent were held to be innocent, since the respondent Appeal di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e intimation card on the production of which the respondent always proceeded to' issue a cheque against the bills received by it from the appellant, was received by the appellant or not, and if this question is answered in the affirmative, the other question which will call for our decision is whether by virtue of the fact that after the intimation card had been duly posted by the respondent to the appellant it fell into dishonest hands and was fraudulently used by some persons, that would create an impediment -in the way of the appellant's claim on the ground that the appellant was negligent and his negligence creates estoppel. Before addressing ourselves to these questions, it would be necessary to set out the material facts as to the dispatch of the intimation card and the fraudulent use which was made of it by persons in whose hands the said card appears to have fallen. It appears that according to the ordinary course of business, on receiving the bills from the appellant, the respondent used to send an intimation card to the appellant and the said card had to be sent back by the appellant with a person having the authority of the appellant to receive the payment and wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the result that by November 1, 1949, only ₹ 68/- were left in this account. That, in brief, is the story of the fraud which has been committed in respect of the cheque issued by the respondent to the appellant for the bill dated August 18, 1949. In the Courts below, the appellant denied that it had received the intimation card from the respondent,and it was alleged on its behalf that in delivering the cheque to the person who presented the said card with the authority purporting to have been issued by the appellant, it cannot be said that the respondent bad given the cheque to any person authorised by the appellant, and so, the appellant was justified in saying that it had not received the payment for its bill. In support of its case, the appellant examined its Director., Mr. Parikh and its officer, Mr. Bhat. The respondent led no oral evidence; it, however, relied on the fact that the intimation card bore the postal mark which showed that it had been posted and it was urged that the said postal mark raised a presumption that the card which had been duly posted in the Post office must have, in ordinary course, reached the addressee. The trial Court noticed the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt that he did not get the card may be literally true,, it would not be true in the sense that the card had not been delivered to the appellant Company. Besides., Mr. Parikh's statement that he did not employ any dispatch clerk and kept no inward or outward register is prima facie unbelievable, and so, Mukarji J.was inclined to hold that the intimation card may have been received by the appellant Company.Having made this finding, Mukarji J. proceeded to examine the true legal position in regard to the appellant's claim, and as we have already observed,he held that since the appellant was guilty of negligence which facilitated the commission of the offence by some strangers,it was precluded from making a claim against the respondent.As we have already seen, Bose, J. has put his decision on the narrow ground that the contract was invalid and s. 7o did not help the appellant. That ground, however, cannot now sustain the final conclusion of Bose,J., in view of the recent decision of this Court in the case of M/s. B. K. Mondal & Son's([1962] Supp. 1 S.C.R. 876). Therefore, in dealing with the present appeal,we will assume that the finding recorded by Mukarji J., is correct a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, neither party pleaded any negligence against the other. It is true that both the parties argued the point of negligence against each other in the appellate Court. The appellant urged that the respondent should not have delivered the cheque to the person who presented the bill and the intimation card because a stamped receipt had not been produced by the said person as it should have been; the appellant's case was that it was usual that a stamped receipt had to be produced alongwith the intimation card by a person duly authorised by the appellant before the cheque was delivered to him and since without a stamped receipt the cheque had been delivered, the respondent was guilty of negligence. This point has been rejected by Mukarji J., but that is another matter. On the other hand, the respondent pleaded that the appellant was negligent inasmuch as the intimation card which had been sent to it and which must be presumed to have been delivered to it fell into the hands of strangers owing to the negligent manner in which it was handled after it was delivered in the Letter Box of the appellant in 135, Canning Street, Calcutta. As we have already noticed, Bose, J., refused to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public of which he is one (Halsbury's Laws of England Vol. 15, page 243. par& 451)." There is another requirement which has to be proved before a plea of estoppel on the ground of negligence can be upheld and that requirement is that "the negligence on which it is based should not be indirectly or remotely connected with the misleading effect assigned to it but must be the proximate or real cause of that result (Halsbury's Laws of England Vol. 15 page 245 para 453,)." Negligence, according to Halsbury, which can sustain a plea of estoppel must be in the transaction itself and it should be so connected with the result to which it led that it is impossible to treat the two separately. This aspect of the matter has not been duly examined by Mukarji J. when he made his finding against the appellant. Mukarji, J. thought that the principle laid down by Ashhurst, J. in the case of Lackbarrow (1), was a broad and general principle which applied to the facts in the present case. It may be conceded that as it was expressed by Ashhurst, J., in the case of Lickbarrow, the proposition no doubt has been stated in a broad and general manner. Indeed, the same proposition ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Privy Council has seriously doubted the correctness of the broad observations made by Ashhurst J, in the case of Lickbarrow (2 T. If. 63, 70), and has not followed the decision in the care of Commonwealth Trust Ltd. ([1926] A.C. 72). Therefore, it must be held that the decision of Mukarji J, which proceeded on the basis of the broad and unqualified proposition enunciated by Ashhurst, J., in the case of Lickbarrow cannot be sustained as valid in law. There arc two other decisions to which reference may usefully be made in considering this point. In Arnold v. The Cheque Bank, (1876) C P.D. 578, 588), Lord Coleridge, C.J., in dealing with the question of negligence, observed that "no authority whatever had been cited before them for the contention that negligence in the custody of the draft will disentitle the owner of it to recover it or its proceeds from a person who has wrongfully obtained possession of it. In the case before them, there was nothing in the draft or the endorsement with which the plaintiff had anything to do, calculated in any way to mislead the defendants. It was regularly endorsed and was then enclosed in a letter to the plaintiffs correspondents, to be sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds the respondent having regard to the fact that the intimation card was an important document the presentation of which with an endorsement as to authorisation duly made would induce the respondent to issue a cheque to the person presenting it, can the Court say that in trusting its employees to bring letters from the letter box to the Director, the appellant had been negligent ? As we have already observed, in dealing with the present dispute on the basis that the intimation card bad been dropped in the letter box of the appellant, it is possible to hold either that the said card was collected by the Peon and given over to Mr. Parikh, or it was not. In the former case, after Mr. Parikh got the said card, it had been removed from Mr. Parikh's table by someone, either by one of the employees of Mr. Parikh or some stranger. In the latter case, though, technically, the card had been delivered in the latter box of the appellant, it had not reached Mr. Parikh. In the absence of any collusion between Mr. Parikh and the person who made fraudulent use of the intimation card, can the respondent be heard to say that Mr. Parikh did not show that degree of diligence in receiving the card ..... X X X X Extracts X X X X X X X X Extracts X X X X
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