ABDUL HAMID KHAN vs PROVINCE OF WEST PAKISTAN AND 4 Other
This petition for special leave to appeal arose from a civil suit filed by the Government against a Treasury Contractor, Abdul Hamid Khan, to recover funds defalcated by his employee from the Kohat Treasury. The petitioner contested liability, arguing he had not entered into the alleged contract of guarantee, that his liability was limited to Rs. 30,000, and that the Treasury Officer’s failure to adhere to safety rules absolved him of responsibility. Additionally, he argued that the defalcation did not occur within the scope of employment under Section 238 of the Contract Act. The trial court permitted secondary evidence to establish the contract's terms and decreed the suit, a decision upheld by the High Court. The Supreme Court dismissed the petition, noting that the matter was concluded by concurrent findings of fact. The Court held that the petitioner failed to demonstrate that the alleged negligence or connivance of the Treasury Officer in facilitating the defalcation diminished the contractor's liability to indemnify the Government under the contract of guarantee. The petition was dismissed as no valid legal grounds for interference were established.
- Can secondary evidence be admitted to prove the terms of a contract of guarantee when the original document is missing from the record?
- Does the negligence or connivance of a Treasury Officer in facilitating defalcation diminish the liability of a Treasury Contractor to indemnify the Government under a contract of guarantee?
- Does the Supreme Court interfere with concurrent findings of fact in the exercise of its special jurisdiction?
- Section 238, Contract Act 1872
ORDER
1. MUHAMMAD YAQUB ALI, J.----This petition for special leave to appeal is concluded by concurrent findings of fact. Ijaz Ahmad an employee of the petitioner, defalcated Rs. 2,43,000 from the Kohat Treasury. Out of the sum Rs. 1,70,290 were recovered and for the balance amount the Government filed a suit on the basis of the contract of guarantee entered into by the petitioner at the time of his appointment as Treasury Contractor. The petitioner denied having entered into any such contract and pleaded inter alia that his liability, if any, was limited to Rs. 30,000. It was further claimed that since the Treasury Officer had failed to perform the duties imposed on him by the Rules intended to ensure against defalcation, the petitioner was not liable to reimburse the Government. Lastly, it was contended that defalcation, if any, did not take place in the course of the business assigned to Ijaz Ahmad, as employee of the petitioner, to attract the vicarious liability prescribed for by section 238 of the Contract Act.
2. In the absence of the original contract of guarantee which appeared to have been removed from the record, the trial Judge allowed the Government to lead secondary evidence of its terms and conditions. Letters addressed by the petitioner to the authorities concerned before his appointment as Treasury Con--tractor and during the operation of the contract also spelt out the terms and conditions of the contract of guarantee. Evidence was also led which proved beyond any doubt that the sum of Rs. 2,43,000 was defalcated from the Kohat Treasury between 14-5-1948 and 17-1- 1949, and the subsequent recovery of Rs. 1,70,290. The liability of the petitioner as Treasury Contractor was thus established under section 238 of the Contract Act and the suit was decreed.
3. On appeal the High Court for good and sufficient reasons concurred in the findings recorded by the trial Court and upheld the decree passed against the petitioner with the variation that interest was disallowed as the Government had not claimed any in the plaint.
4. The petitioner now seeks leave to appeal on grounds which as said in the beginning of the order are concluded by findings of facts. As to the legal issue the learned counsel was, in spite of our giving him an opportunity to study the scope of section 238 of the Contract Act and precedent cases on the point, unable to show that the negligence or connivance of the Treasury Con--tractor facilitating defalcation diminished his liability under the contract of guarantee to indemnify the Government.
5. No proper ground is thus made out to call for interference by this Court in the exercise of its special jurisdiction with the decree passed against the petitioner. The petition is, accordingly, dismissed.