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Issues Involved:
1. Whether the suit lies in the present form. 2. Whether the plaintiff advanced Rs. 5,000 to the defendant firm on December 24, 1946. 3. Whether the defendant Bank is liable to repay Rs. 5,000 deposited by the defendant firm. 4. Whether the plaintiff's suit is within the limitation period. 5. Whether the plaintiff is entitled to recover the amount in suit from the defendant Bank. 6. Whether the plaintiff is entitled to any interest. Detailed Analysis: Issue (i): Suit's Form and Effect The court decided in favor of the plaintiffs, affirming that the suit was properly filed in its present form. Issue (ii): Advancement of Rs. 5,000 The court held that no advance of Rs. 5,000 had been made by the plaintiffs to the first defendant on December 24, 1946. This issue was decided against the plaintiff. Issue (iii): Bank's Liability to Repay Rs. 5,000 The court determined that the Bank could not combine an account of one person with another as a joint account and thus could not set off the call deposit amount against the debts in the Sheikhupura branch. Consequently, the Bank was liable to repay Rs. 5,000 deposited with it. Issue (iv): Limitation Period The court found that the plaintiff's suit was within the limitation period. The starting point of the limitation period was the date of demand by defendant No. 1 or his assignee, not the date of the release of the security by the Government. The demand was made by defendant No. 1 on February 25, 1948, and by the plaintiff-firm on September 3, 1948. Therefore, the suit filed on March 27, 1949, was within the three-year limitation period prescribed under Article 60 of the Limitation Act. Issue (v): Entitlement to Recover Amount from Bank The court concluded that the Bank was liable to repay Rs. 5,000 to the plaintiffs. The court rejected the Bank's argument that the plaintiff-firm was a third party with no privity of contract with the Bank. The court referenced several legal principles and cases, including the English law principle that a stranger to the contract cannot take any advantage under it. However, the court found that the plaintiff was entitled to the amount due to the assignment of the claim by defendant No. 1 to the plaintiff. Issue (vi): Entitlement to Interest The court decided against the plaintiff regarding interest, holding that the plaintiff was not entitled to any interest. Relief: The plaintiff's suit was decreed for Rs. 5,000 with proportionate costs against defendant No. 2, the Bank. Additional Considerations: - The court discussed the concept of Banker's lien and set-off, concluding that the Bank could not claim a lien on the deposit of one partner for a balance due from the firm, as there was no mutuality of obligation. - The court also referenced several legal precedents and principles regarding the assignment of contracts and the Bank's right to set off deposits against debts, ultimately finding that the Bank's claim to set off was not valid in this case. Conclusion: The appeal filed by the Bank was dismissed, and the judgment of the Subordinate Judge 1st Class, Amritsar, was upheld. The parties were directed to bear their own costs throughout.
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