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Case Analysis of Secretary of State for India in Council V Bank of India ltd

 Case Analysis of Secretary of State for India in Council V Bank of India ltd


Facts of the case:

  • A lady named Gangabai was the endorsee and receiver of a Rs 5000 government promissory note in this case. In his possession, a Broker named Acharya manufactured her endorsement in his advantage and approved it for value to the respondents. Respondents applied to the Public Debt Office in good faith under the Indian Security Act of 1920, and the promissory note payable to them was renewed in exchange.

  •  After learning of Acharya's deception, the lady sued the appellant and was found liable. The respondent, in turn, sued the appellant, claiming that he was entitled to be indemnified for the loss he had suffered based on the principle that the Public Debt Officer had issued the renewed note at the respondent's request and was thus entitled to be indemnified for the damage caused by the fact that what had been done had caused injury to a third party's rights.

Issues of the case:

  • The question is whether the appellant is debarred from relying on an indemnity implied under the Common law of India. The statement of the principle under which such an indemnity is implied is stated by Lord Halsbury:

  • When a person performs an act at the request of another, and the act is not necessarily tortious to the knowledge of the person performing it, and the act turns out to be injurious to the rights of a third party, the person performing the act is entitled to an indemnity from the person who requested it.


Judgment:

It was decided that an express indemnification agreement is not required in the face of an inferred right to indemnify that existed previously under Indian law. As a result, the appellant's claim to be reimbursed by the respondent against a responsibility he had incurred and had to meet in the circumstances of the case was denied.
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