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of <h1>Supreme Court dismisses bank's liability for employee's fraud, reduces awarded amount by Rs. 11,000.</h1> <h3>State Bank Of India Versus Shyama Devi</h3> State Bank Of India Versus Shyama Devi - 1978 AIR 1263, 1978 (3) SCR 1009, 1978 (3) SCC 399 Issues Involved:1. Whether the plaintiff deposited the various sums of money mentioned in the plaint with the defendant bank.2. Whether the amounts mentioned in the plaintiff's Pass Book are binding on the defendant bank.3. Whether the plaintiff made any deposit in contravention of any rule of the bank and the effect thereof.Detailed Analysis:Issue 1: Whether the plaintiff deposited the various sums of money mentioned in the plaint with the defendant bank.The plaintiff claimed to have deposited sums totaling Rs. 12,205, while the defendant bank admitted only Rs. 1,932/-. The trial court found that except for Rs. 4,000 and Rs. 105, the other amounts were deposited by the plaintiff, and the bank was bound by those entries. The High Court, on appeal, found that the disputed amount of Rs. 8,000 consisted of two items: Rs. 7,000 in the form of a cheque drawn by Bhagwati Prasad and Rs. 1,000 in cash. The High Court held that the cheque was fraudulently credited to the account of Kapil Deo Shukla, an employee of the bank, and thus the plaintiff had to suffer due to Shukla's actions. The Supreme Court re-examined the evidence and found that the cheque for Rs. 4,000 was not deposited in the usual course of business and was instead credited to someone else's account. The court concluded that the plaintiff failed to prove that the amount was handed over to an employee of the bank in the course of his employment.Issue 2: Whether the amounts mentioned in the plaintiff's Pass Book are binding on the defendant bank.The trial court held that the entries in the plaintiff's Pass Book were binding on the bank. The High Court found that the bank was liable for the fraudulent actions of its employee, Kapil Deo Shukla, as the entries in the Pass Book were made by him during his employment. The Supreme Court, however, held that the fraudulent entries made by Shukla in the Pass Book and Ledger could not shift the burden of proof to the bank. The court emphasized that the employer is not liable for the acts of the servant if the cause of the loss arose without the employer's actual fault or privity and without the fault or neglect of the servant in the course of their employment.Issue 3: Whether the plaintiff made any deposit in contravention of any rule of the bank and the effect thereof.The trial court found that the bank did not strictly enforce its rules, and thus the plaintiff was not debarred from claiming the deposit even if it was in contravention of the bank's rules. The Supreme Court did not specifically address this issue in detail, as it focused more on the fraudulent actions of the bank's employee and the liability of the bank.Conclusion:The Supreme Court allowed the defendant bank's appeal and dismissed the plaintiff's claim regarding Rs. 11,000 (Rs. 4,000 plus Rs. 7,000) and the interest thereon. The court reduced the decretal amount granted by the High Court by Rs. 11,000 and interest thereon, with no order as to costs. The court held that the bank was not liable for the loss caused by the fraudulent actions of its employee, Kapil Deo Shukla, as he was not acting within the scope of his employment when he committed the fraud.
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