LexBANK OF BIHAR LTD. versus MAHABIR LAL & ORS.
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842 SUPREME COURT REPORTS [1964) \IOI.. 1963 BANK OF BIHAR LTD. Febnuzr.J, 7. v. MAHABIR LAL & ORS. (K. SuBBA R.t.o, RAOHUBAR DAY.Ar. and J. R. MuonoLKAR, Jj.) lfegoliahle I...trumtnt-Firm ;prmnl• ch•q~ to &nk- .Amovnl lupl in IM hand8 of Poldar of Bank-If paymtnl lo Ji,.,._Sl!Jltmtnl in judgmenJ about liapptning in courl- ~ Cllallt11ge if and when permiUtd-VicarivUll liability /or criminal all of aertJant-ll'egotiable lrulrume11~ Acl, 1881 (XXV[ of 1881), ... 86, ll8. Rcspondenl3 I and 2 carried on business under the name and style of M/s.Jogilal Prohhu Chanel. Under a cash credit agreement in favour of the B1har Sharif Branch of the Bank and on the strength of a promissory note executed by the firms. tho firm drew a cheque on the Bank whir,h was pao;scd for payment. ' · The High Court found that the money was not paid to the firm but was kept in the hands of the l'otdar a servant or agent of the Bank fo1 being paid to anotl1er firm at Patna. This person accompanied the r.,pondcnts up to Patna but failed to meet the respondents at the shop of the Patna firm which was the place agreed upon. Before the High 0ourt the couns:I for the present appellant co11ceded that the Potdar had taken the money with him. Before this Court it w"' contended on behalf of the appellant that no concession wa• m>de as stated in the judg- ment of the High Court, to the effec1 that the Potdar took the money with him. It was further contended that the payment to the Potdar should be deemed to be payment to the firm. Reliance was also placed on ss. 85 and 118 of the Negotiable Instruments Act, 1881. Finally it was contended that the Bank could not be hr.Id responsible for the money misappropri- ated by the Potdar because his act was a criminal act. Held, that where a statement appears in the judgment of a court that a particular thing happened or did not happen befor it, it ought not ordinarily to be permitted to be challen- ged by a party unless both parti.. to the litigation agree that the statement is erroneous. I S.C.R. SUPREME COURT REPORTS 843 The money not having passed into the actual oustody of the firm or that of the custody of a person who was servant or agent of the firm, the firm cannot be held liable for it. In 01 der to avail of the provisions of s. 85 of the Ne[l'o- tiable Instruments Act it has to be established that payment had in fact been made to the firm or to a person on behalf of the firm. Section 118 of the Act was held not to have any bearing upon the case at all. Jugjivanda" J~mnadaB v. The Nagar Central Bank, Ltd. (1925) I. L. R. 50 Born. ll8, distinguished. Vicarious liability may in appropriate cases, rest on the master with respect to his servant's acts but it cannot possibly rest on a stranger with respect to the criminal acts of a servant of another. Gopal Chandra Bhattacharjee v. The Secretary of Stat• for India (1909) I. L. R. 36 Cal. 647 and Cheshire v. Bailey, [1905] 1 K. B. 237, distinguished. CIVIL APPELLATE JURISDICTION: Civil .Appeal No. 340 of 1960. Appeal from the judgment and dec.ree dated March 11, 1958, of the Patna High Court in F. Appeal .No. 230of1950. Sarjoo Prasad and R. G. Prasad, for the appellant. N. G. Chatterjee, JJf. K. Ramamurthy, R. K. Garg, S. (J. Agarwala and D. P. Singh, for the respondent No. 1. 1963. February 7. The Judgment of the Court was delivered by MUDHOLKAR, .J.-This is an appeal by a certi- ficate granted by the Patna High Court allowing the appeal preferred before it by the defendants l and 2 and dismissing the claim of the plaintiff Bank (the appellant before us) for a 1um of Rs. 35,000/-. 196! B•nk of Bihar Lt~. •• Mih•6ir Lal Mudl1olkar, J. 1963 &.le •I Boho< Ltd. •• Molvbtr UI M"'°"11l01, J. 844 SUPREME COURT REPORTS[l964) VOL. According to the Bank, defendants I and 2 carried on busilless at Bihar Sharif under the name ar.d style of Messrs. Jogilal Prabhu Chand. On February 17, 1941, they executed a cash credit agree- ment in favour of the Bank under which cash credit facilities were sanctioned up to a limit of Rs. 50,000/· against cloth bales on certain terms. Under that agreement a sum of Rs. 15,000/· was advanced to the Firm on that very day. On August 28, 1947 the Firm executed a promissory note in favour of the Bihar Sharif branch of the Bank for Rs. 50,000/· and approached the Manager for immediate advance of Rs. 35,000/- a~ they required that amount for payin
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