The New Marine Coal Co. (Bengal) Private... vs Union Of India

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 5 April, 1963

Coram: K.C. Das Gupta, K.N. Wanchoo, P.B. Gajendragadkar

In the case titled The New Marine Coal Co. (Bengal) Private Ltd. versus Union of India, decided on 5 April 1963, a bench consisting of K.C. Das Gupta, K.N. Wanchoo and P.B. Gajendragadkar heard the appeal. The appeal originated from a suit instituted by the appellant, New Marine Coal (Bengal) Private Ltd., against the respondent, the Union of India, before the original side of the Calcutta High Court. The suit sought recovery of a sum of Rs 20,343‑8/‑. The appellant asserted that it had supplied coal to the Bengal Nagpur Railway Administration during June 1949 and that the amount claimed represented the price of the coal together with the sales‑tax payable on that supply. Anticipating that the respondent might contend that the contract on which the claim was based was illegal because it did not comply with section 175(3) of the Government of India Act, 1935, the appellant pleaded an alternative case. Under this alternative claim the appellant alleged that the coal had been supplied without an intention to make a gratuitous gift, that the respondent had enjoyed the benefit of the supply, and consequently that the respondent was obligated to compensate the appellant by paying the value of the coal pursuant to section 70 of the Indian Contract Act. The appellant further contended that, because the amount was to be paid at its Esplanade office in Calcutta, the original side of the Calcutta High Court possessed jurisdiction to entertain the suit. As part of the claim a portion of the cause of action had arisen outside the ordinary territorial limits of that court, the appellant therefore obtained leave to sue under clause 12 of the Letters Patent. In its written statement the respondent admitted that the coal had been delivered to the Bengal Nagpur Railway Administration and did not dispute the appellant’s assertion that it had forwarded bills to the respondent for the amount claimed. Nevertheless, the respondent pleaded that the contract was illegal insofar as it had been entered into in contravention of the provisions of section 175(3) of the Government of India Act, 1935, and it argued that section 70 of the Indian Contract Act was inapplicable. The respondent further alleged that, following the usual course of dealings between the parties, it had issued an intimation card to the appellant, requesting that the appellant obtain payment by presenting a proper receipt and authority against its bills. After receiving the intimation card and a proper receipt executed on behalf of the appellant, the respondent stated that it had effected payment of the amounts covered by the bills by means of an “account payee” cheque drawn on the Reserve Bank of India in favour of the appellant, which cheque had been delivered to the person who purported to have authority to receive payment on the appellant’s behalf.

The respondent argued that it had already satisfied the appellant’s claim by delivering payment to a person it believed possessed authority to receive the amount on the appellant’s behalf. Consequently, the respondent contended that the appellant lacked any cause of action and therefore the suit should fail. On the basis of these pleadings, the trial judge framed seven substantive issues for determination. The first two issues concerned the jurisdiction of the court; however, the respondent did not pursue these points and the judge recorded no findings on them. Regarding the third issue, the trial judge concluded that the contract upon which the appellant relied was invalid and could not be enforced. The fourth issue dealt with the alleged payment of the bills, and the judge found the respondent not liable on that point. For the fifth issue, the trial court held that the respondent was obligated to pay the appellant compensation as claimed. The sixth issue, raised by the respondent under section 80 of the Code of Civil Procedure, was not pressed, and thus no conclusion was drawn. The seventh issue concerned the appellant’s allegation that the respondent had admitted the claim; the judge rejected this allegation. The decisive finding was the one on issue five, which determined the outcome of the suit. Accordingly, the court issued a decree ordering the respondent to pay the appellant the sum of twenty thousand thirty and eight rupees, with interest to accrue at six per cent per annum.

The respondent challenged this decree by filing an appeal before a division bench of the High Court, composed of Justice P. B. Mukarji and Justice Bose. Both judges agreed that the appeal should be allowed and that the appellant’s claim ought to be dismissed with costs, although they reached this conclusion on different grounds. Justice Bose held that the contract under dispute was invalid and that the appellant’s claim for compensation under section 70 of the Indian Contract Act could not succeed. He further found that the appellant had failed to prove that the originally invalid contract had been properly ratified. On this basis, Justice Bose concluded that the appellant’s claim could not be granted. It is also noteworthy that Justice Bose declined to consider a plea of negligence raised by the respondent for the first time in the appeal. Justice Mukarji, who delivered the principal judgment of the appellate court, concurred with Justice Bose that the contract was invalid and that section 70 was inapplicable. However, Justice Mukarji opined that the contract had been duly ratified and therefore examined whether the appellant’s claim was meritorious on the substantive facts. In addressing that question, the judge expressed the view that even if both parties were found to be innocent, the respondent had already part‑spent the money, and the appellant could not demand repayment again.

The learned Judge observed that even if both the appellant and the respondent were considered innocent, the respondent had actually part‑with the money; therefore the appellant could not demand that the respondent pay the amount again. He relied on the principle articulated by Ashhurst J. in Lickbarrow v. Mason (2 T.R. 63, 70), which states that “whenever one of two innocent persons must suffer by the acts of a third, he who enables such third person to occasion the loss must sustain it.” In the Judge’s view, the respondent had duly mailed an intimation card to the appellant, and the fact that the card subsequently fell into the hands of dishonest persons who fraudulently used it to obtain a cheque from the respondent demonstrated that the appellant, by his negligence, had enabled those fraudulent persons to secure the cheque. Consequently, the appellant was not permitted to claim the amount from the respondent. On these grounds, Justice Mukharji allowed the appeal and dismissed the appellant’s suit, ordering costs. The appellant then approached this Court, seeking review of that judgment, and presented a certificate granted by the High Court. In the lower courts, the parties had advanced detailed arguments on two principal questions: whether the contract that formed the basis of the suit was invalid, and if it was invalid, whether the appellant could sustain a claim for compensation under section 70 of the Indian Contract Act. Both questions have been definitively answered by a recent decision of this Court in State of West Bengal v. M/S. B. K. Mondal & Sons ([1962] Supp. 1 S.C.R. 876). That decision makes clear that the contract on which the suit relied is void and unenforceable, which is adverse to the appellant. The decision also clarifies that where, under a void contract, the appellant has performed his part and the respondent has received the benefit of that performance, section 70 would permit the appellant to claim compensation from the respondent; this point favours the appellant, and therefore a detailed discussion of it is unnecessary. Assuming, for argument’s sake, that the appellant is entitled to claim the amount from the respondent, two further issues remain. The first is whether the intimation card, on the basis of which the respondent consistently issued a cheque after receiving bills from the appellant, was actually received by the appellant. If that question is answered affirmatively, the second issue is whether the subsequent fraudulent use of the card, after it was duly posted by the respondent and fell into dishonest hands, creates a barrier to the appellant’s claim on the ground that his negligence gives rise to estoppel.

The Court first observed that before it could answer the two remaining questions, it was essential to set out the material facts concerning the dispatch of the intimation card and the fraudulent use of that card by persons who had apparently obtained it. In the ordinary course of business, the respondent, upon receiving bills from the appellant, habitually sent an intimation card to the appellant. The appellant was required to return the card together with a duly authorised representative who could receive payment. When the respondent received the returned card bearing the appropriate authority, it typically issued a cheque to the representative.

In the present case, it was undisputed that the appellant had sent a bill to the respondent on 18 August 1949, claiming a total sum of Rs 20,343 8⁄-. Subsequently, on 10 October 1949, the respondent mailed an intimation card to the appellant at the appellant’s business address, 135 Canning Street, Calcutta. The card informed the appellant that the amount shown in the bill would be paid upon presentation of a proper receipt and authority, between 11 A.M. and 3 P.M. on ordinary days and between 11 A.M. and 1 P.M. on Saturdays. The card was accompanied by a receipt form that the appellant was asked to sign, and the card was posted in the normal manner.

Later, a person identified as Mr B. L. Aggarwal produced the intimation card before the respondent. He also produced an endorsement that purported to show that the appellant had authorised him to receive the payment on its behalf. When the respondent examined the intimation card together with the alleged authority, it asked Mr Aggarwal to execute a receipt. After the receipt was executed in the usual form, the respondent handed over an “account‑payee” cheque for the amount claimed in the bill to Mr Aggarwal, who then departed from the respondent’s office with the cheque.

The Court further noted that, contemporaneously, a conspiracy had been hatched by certain persons who had obtained the intimation card. These conspirators allegedly formed a limited company that bore the same name as the appellant. According to a resolution that they claimed had been passed by the directors of this fictitious company on 17 October 1949, the opening of an account in the United Commercial Bank Ltd., Calcutta, was authorised. The resolution was purportedly signed by the Chairman of the Board of Directors, Mr Abinash Chander Chatterji. Using this forged resolution, the conspirators applied to open a bank account, and they also produced a set of Articles of Association that they claimed were those of the fictitious company.

In the proceedings, the Court explained that the parties to the conspiracy presented the Articles of Association of the fictitious company and, on that basis, secured the opening of an account with United Commercial Bank Ltd., Calcutta, by furnishing a cheque for five hundred rupees on 27 October 1949. The following day, 26 October 1949, the cheque that had been received from the respondent was credited to the newly created account. As was to be expected, withdrawals from that account began almost immediately; by 1 November 1949 only sixty‑eight rupees remained in the account. The Court characterised these events as the essential narrative of the fraud committed in connection with the cheque issued by the respondent to the appellant for the bill dated 18 August 1949. At trial, the appellant denied ever having received the intimation card from the respondent and contended that, because the cheque had been delivered to a person presenting the card on the alleged authority of the appellant, the respondent could not be said to have handed the cheque to any individual authorized by the appellant. Consequently, the appellant asserted that it was entitled to say that payment for its bill had not been received. To support this position, the appellant examined its director, Mr Parikh, and its officer, Mr Bhat. The respondent did not lead any oral evidence; instead, it relied on the fact that the intimation card bore a postal marking indicating that it had been posted. The respondent argued that such a postal marking gave rise to a presumption that a card duly posted at the post office would, in the ordinary course of business, reach its intended addressee. The trial court observed that the intimation card lacked a corresponding delivery mark, which it should have displayed, and therefore held that the burden of proving actual delivery rested on the respondent. After considering the oral testimony offered by the appellant and noting the complete absence of evidence from the respondent, the trial court concluded that the respondent had failed to demonstrate that the intimation card had indeed been delivered to the appellant. On the basis of that finding, the trial court entered a decree in favour of the appellant.

In this case the Court observed that the evidence concerning the delivery of the intimation card was undeniably inadequate. The record showed that Mr Parikh, who had been a Director of the appellant company since 1948, also served as a Director of K Wara Ltd., a firm that operated eight collieries comparable to those of the appellant. K Wara Ltd. maintained its registered office at 135 Canning Street, and the appellant company likewise occupied an office at the same address. Within the ground‑floor premises of that building a locked post‑box had been installed for the receipt of correspondence addressed either to the appellant or to K Wara Ltd. Access to the key of this post‑box was normally entrusted to one of the two peons employed in the building, who were responsible for opening the box, retrieving the letters and handing them over to Mr Parikh. Mr Parikh’s testimony asserted that he had never received the intimation card. The Court indicated that this denial could not be accepted at face value for two principal reasons. First, even if the post‑box had indeed been opened by a peon and the card had been placed inside, the peon might have failed to pass the card on to Mr Parikh; in such a circumstance Mr Parikh would have been unaware that the card had arrived. Consequently, while his statement that he did not personally obtain the card might be literally correct, it would not establish that the card had not been delivered to the appellant’s office. Second, Mr Parikh’s claim that his office employed no dispatch clerk and kept no inward or outward register was deemed prima facie implausible. On the basis of these considerations, Justice Mukarji was inclined to conclude that the intimation card could reasonably be assumed to have been received by the appellant’s company. Having reached this finding, Justice Mukarji examined the substantive legal position regarding the appellant’s claim for damages. The Court noted that Justice Mukarji held the appellant negligent, observing that such negligence had facilitated the commission of the offence by unidentified third parties and therefore barred the appellant from pursuing a claim against the respondent. Earlier, Justice Bose had based his decision on the narrow ground that the contract was invalid and that section 70 did not afford any relief to the appellant. However, the Court indicated that Bose’s reasoning could no longer support his final conclusion in light of the later Supreme Court decision in M/S B K Mondal & Sons (1962 Supp 1 SCR 876). Accordingly, for the purpose of deciding the present appeal, the Court assumed that Justice Mukarji’s finding was correct and treated the intimation card as having been duly delivered to the appellant. The remaining issue for determination, therefore, was whether, after the card’s delivery, its subsequent unauthorized possession and fraudulent use by an unknown person could give rise to an estoppel that would prevent the appellant from maintaining its present claim. The Court further noted that, despite the unsatisfactory nature of Mr Parikh’s evidence, this point required careful consideration in the final analysis.

The Court observed that although the testimony of Mr Parikh may be unsatisfactory and might lead to the inference that, despite his denial, the intimation card could have been delivered to Mr Parikh, the respondent did not allege that Mr Parikh intentionally permitted any of his employees or any other person to misuse the card fraudulently. In other words, the legal issue raised by the appellant required the Court to consider a proposition that Mr Parikh had no involvement whatsoever with the fraudulent act committed against the respondent and that the individual who obtained the intimation card from the office of Mr Parikh and subsequently used it for a fraudulent purpose acted independently, without the knowledge or consent of Mr Parikh. The essential question that fell for determination was whether the method by which the intimation card was kept in safe custody was insufficiently secure and effective, thereby allowing a third party to pilfer the card, and whether such a lapse could support the respondent’s contention that the appellant was negligent. If negligence could be established, the respondent argued that the appellant would consequently be estopped from advancing the present claim. The Court therefore needed to assess whether the alleged deficiency in safeguarding the card could give rise to a claim of negligence that would, by operation of estoppel, bar the appellant’s present relief.

In addressing this issue, the Court noted that the allegation of negligence, which formed the basis of the estoppel pleaded by the respondent, had not been included in the written statement filed by the respondent. It was striking that the pleadings of both parties entirely omitted reference to the fact, mutually known to them before the commencement of the present suit, that a cheque issued by the respondent had been fraudulently utilized by unknown persons. The appellant’s plaint made no mention of the cheque or its fraudulent use, and it framed the claim as if the respondent had failed to honour the bill presented by the appellant. Conversely, the respondent’s written statement disregarded the fact that the cheque had never been received by the appellant but had instead been obtained and encashed by strangers. Consequently, the pleadings before the Trial Court did not contain any allegation of negligence by either side. Although both parties later raised the issue of negligence before the appellate Court, the appellant argued that the respondent should not have delivered the cheque to the person presenting the bill and the intimation card because the presenter had not produced a stamped receipt, which the appellant claimed was a customary requirement. The appellant maintained that a stamped receipt together with the intimation card should have been produced by a person duly authorised by the appellant before the cheque was handed over, and that the failure to obtain such a receipt amounted to negligence on the part of the respondent. This argument was rejected by Justice Mukarji, a matter that the Court noted for separate consideration. On the other hand, the respondent asserted that the appellant was negligent because the intimation card, once sent to the appellant, was presumed to have been delivered but subsequently fell into the hands of strangers due to the negligent manner in which the appellant handled it after delivery.

The Court noted that the intimation card fell into the hands of strangers because it was handled in a negligent manner after being placed in the letter box of the appellant at 135 Canning Street, Calcutta. It further recorded that Justice Bose had declined to consider the plea of negligence raised by either party, while Justice Mukarji had examined the plea and rendered a finding that favoured the respondent and disfavoured the appellant. Counsel for the appellant argued that the respondent should have raised a claim of negligence in its original pleadings and that the appellate court erred by permitting the issue to be introduced for the first time on appeal. The Court agreed that this argument possessed a measure of merit, observing that negligence, in ordinary language, signifies the failure to exercise the level of care and diligence that the circumstances demand. It added that the determination of what constitutes negligence inevitably depends on the specific facts and circumstances of each case. Accordingly, the nature of the contract, the expectations surrounding performance by each party, the degree of care ordinarily expected, and the reasons for any lapse in due diligence are all relevant considerations for a judicial assessment of a negligence claim. Because the respondent had not articulated a negligence claim before the trial court, the Court recognised that the appellant could contend it was denied an opportunity to address the allegation and that considering the claim on appeal was therefore unfair. In addition to this procedural concern, the Court accepted another serious objection raised by counsel for the appellant concerning the technical meaning of negligence in an estoppel claim. He explained that when estoppel is pleaded on the basis of negligence, the term “negligence” does not refer to its everyday sense but acquires a specialised legal definition. To succeed on such an estoppel ground, it must be shown that the party against whom the plea is made owed a duty of care to the party invoking the plea. Just as estoppel may arise from misrepresentation or an act or omission, it may also arise from negligence, but only if that negligence is established in the technical sense. The Court quoted Halsbury’s observation that “before anyone can be estopped by a representation inferred from negligent conduct, there must be a duty to use due care towards the party misled, or towards the general public of which he is one” (Halsbury’s Laws of England Vol. 15, p. 243, para 451). The Court further noted that another element must be proved for a negligence‑based estoppel claim to succeed, namely that the negligent act must be the proximate cause of the misleading effect, a point that had not been fully examined by Justice Mukarji in his finding against the appellant.

The Court explained that, for a claim of estoppel based on negligence to succeed, the negligence must be the immediate and actual cause of the misleading effect, not merely a distant or indirect factor. Halsbury’s Laws of England, volume fifteen, page 245, paragraph 453, was quoted to emphasize that the negligent act must be closely connected with the result so that the two cannot be considered separately. According to this authority, only negligence that occurs within the very transaction that gave rise to the dispute can support an estoppel argument, and that negligence must be so intertwined with the outcome that it is impossible to treat them as distinct. The Court observed that Mukarji J. had not given due consideration to this requirement when he decided against the appellant. Mukarji J. had treated the principle laid down by Ashhurst J. in the case of Lickbarrow (2 T.R. 63, 70) as a broad, general rule that applied automatically to the facts of the present case. The Court acknowledged that Ashhurst J.’s pronouncement was indeed expressed in broad terms, and that the same sweeping principle had later been endorsed by the Privy Council in Commonwealth Trust Ltd. v. Akotey ([1926] A.C. 72).

The Court then recounted the facts of that Privy Council decision. The respondent, a cocoa grower in the Gold Coast Colony, had consigned 1,050 bags of cocoa by railway to a buyer named L., to whom he had previously sold cocoa. Before a price dispute could be resolved, L. sold the cocoa to the appellants and handed the consignment notes to their agent, who recognized the cocoa as belonging to the appellants. The appellants purchased the cocoa in good faith and paid the full price. When the respondent later sued the appellants for conversion, the Privy Council held that the respondent’s own conduct barred him from asserting his title against the appellants, and consequently his claim was dismissed. The Privy Council’s judgment relied on the well‑known statement of Ashhurst J. from Lickbarrow, thereby showing that the broad principle articulated by Ashhurst J. had received Privy Council approval. However, the Court noted that the issue was later examined in depth by the Privy Council in Mercantile Bank of India Ltd. v. Central Bank of India Ltd. ([(1937) L.R. 65 I.A. 75, 86]). In that later case, Lord Wright, delivering the judgment of the Board, referred again to Lickbarrow and expressed serious doubt about the validity of the broad proposition, stating that although undisclosed facts might have justified the earlier decision, the case did not appear safe to follow on its face. The discussion then turned to the opinion of Lord Sumner in a subsequent case.

In this portion of the judgment the Court surveyed several earlier authorities that had addressed the scope of the principle of estoppel, particularly with respect to the requirement of a duty between the parties. The Court first referred to the decision in R.E. Jones Ltd. v. Waring & Gillow Ltd. [1926] A.C. 670, in which the principle articulated by Ashhurst J. was expressly rejected because the Court held that estoppel could arise only where a duty could be identified. The Court then noted that Lord Lindley, in Farquharson Bros. & Co. v. King & Co. [1902] A.C. 325, similarly observed that the dictum of Ashhurst J. was overly broad. The Court further observed that other judges, whose comments were cited by Lord Wright in his reasons, had also expressed criticism of the same observation. Consequently, the Court pointed out that the Privy Council, in The Mercantile Bank of India Ltd. (1937) L.R. 65 I.A. 75, 86, had seriously questioned the correctness of the wide‑ranging observations made by Ashhurst J. in Lickbarrow [2 T.R. 63, 70] and had declined to follow the earlier decision in Commonwealth Trust Ltd. [1926] A.C. 72. On the basis of these precedents, the Court concluded that the earlier decision of Mukarji J., which was founded upon the broad and unqualified proposition set out by Ashhurst J. in Lickbarrow, could not be sustained as valid law. The Court then turned to two additional cases that were relevant to the discussion. In Arnold v. The Cheque Bank (1876) C.P.D. 578, 588, Lord Coleridge, C.J., while addressing negligence, remarked that no authority had ever been cited to support the contention that negligence in the custody of a draft would deprive the owner of that draft, or its proceeds, from a person who had obtained possession wrongly. He explained that, in the case before him, there was nothing in the draft or its endorsement that could have misled the defendants; the draft had been properly endorsed and was merely enclosed in a letter intended for the plaintiff’s correspondents and sent by post. Lord Coleridge observed that reliance on the honesty of servants performing the ordinary duty of mailing letters could not be characterized as negligence, and that no duty was owed to the general public to exercise the same level of care as if every servant were a notorious thief. These observations, the Court explained, demonstrate that before a plea of estoppel based on negligence can be raised, it must first be shown that a duty existed between the parties and that negligence concerning that duty has been proved. Finally, the Court referred to Baxendale v. Bennett, in which Bramwell, L.J., (1878) 3 Q.B.D. 525, 530 considered a similar issue. In that case the defendant had handed a blank acceptance on stamped paper to a person identified as H., authorising H. to insert his name as drawer. H. returned the blank acceptance in the same condition, and the defendant subsequently placed it in an unlocked drawer in his chambers where it was either lost or stolen. The Court’s analysis of these authorities underscored that negligence must be rooted in a duty owed by one party to another and must also be shown to be the proximate cause of the loss.

The Court recounted the facts of the earlier case in which a person filled in his own name on a blank acceptance without the authority of the original holder, and the plaintiff, as endorsee for value, instituted proceedings. The Court of Appeal decided that the defendant could not be held liable on the bill. In discussing the alleged negligence of the defendant, Bramwell L.J. remarked that “the defendant may have been negligent, that is to say, if he had the paper from a third person, as a bailee bound to keep it with ordinary care, he would not have kept it in a drawer unlocked.” However, the learned judge explained that such negligence did not constitute the proximate or effective cause of the fraud, because a criminal act was required to complete the wrongdoing. Consequently, the Court held that the defendant bore no liability on the bill. The decision illustrated that negligence must arise from a duty owed by one party to another and that the negligent act must be shown to be the proximate or immediate cause of the loss.

Applying that legal principle, the Court examined the respondent’s claim of estoppel against the appellant in the appellate proceedings. It considered whether the appellant, upon receiving the intimation card, owed a duty to the respondent to keep the card in a locked drawer with the key continuously in the possession of its Director. The Court noted that answering affirmatively would be difficult, but it entertained a hypothetical duty arising from the importance of the intimation card, which, when properly endorsed, would induce the respondent to issue a cheque to the presenter. The Court then asked whether reliance on employees to collect letters from a letter‑box and deliver them to the Director could be characterised as negligence on the appellant’s part. The record showed two possible scenarios: either the Peon retrieved the card from the appellant’s box and handed it to Mr Parikh, after which it was removed from Mr Parikh’s table by an employee of Mr Parikh or by an unknown stranger; or, alternatively, although the card was placed in the appellant’s box, it never reached Mr Parikh. In the absence of any collusion between Mr Parikh and the individual who later used the card fraudulently, the Court considered whether the respondent could argue that Mr Parikh failed to exercise the degree of diligence required in receiving and safeguarding the card. The Court concluded that it would be difficult to find in favour of the respondent on this point, especially given the ordinary practices of business correspondence handling.

In the ordinary course of business, any office that received a substantial amount of correspondence kept a locked letter box placed outside the premises. The key to this box was customarily handed to the office peon, who was responsible for retrieving the letters after they were delivered by postal workers. This practice operated on the expectation that all businessmen necessarily made, namely that the servants entrusted with collecting the letters would act honestly. Likewise, a businessman ordinarily presumed that letters placed on a desk or filed in a cabinet at another location would not be stolen by any of his employees. Accordingly, the Court observed that if the intimation card at issue had been removed by a fraudulent individual, it would be difficult to assign negligence to the appellant, nor could such negligence be treated as the proximate cause of the loss suffered by the respondent. The Court therefore concluded that Mukarji J. had erred in holding that the respondent could successfully rely on an argument of estoppel by negligence against the appellant. The Court further noted that the question whether the appellant’s claim against the respondent under s. 70 was decided by the earlier decision of this Court in M/S. B. K. Mondal & Sons [[1962] Supp. 1 S.C.R. 876], which was decided in favour of the appellant, required that the Division Bench of the High Court had erred in dismissing the appellant’s claim. Consequently, the Court set aside the decree of the appellate Court, restored the decree of the trial Court, and awarded costs throughout. The appeal was therefore allowed.