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TMI Blog1939 (4) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... cation that under agreements with the Travancore National and Quilon Bank Ltd., the Nayar Modern Bank made fixed deposits at the various Branches of the Travancore National and Quilon Bank at different times for the purpose of enabling the Nayar Modern Bank to open overdraft accounts on the security of such fixed deposits, that there were five such fixed deposits on the date when the Travancore National and Quilon Bank suspended payment and that after giving credit to the amounts drawn by it on overdraft account there remained a balance Rs. 23,950-3-4 which is now claimed. A statement of account is given in paragraph 4 of the affidavit and its accuracy is not traversed by the Official Liquidators. The ground on which the claim for preferent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the daily overdrawn balance of the said account." Paragraph 10 provides that the Nayar Modern Bank should pledge the deposit receipt in favour of the Travancore National and Quilon Bank as security for the due re-payment of any moneys that the Nayar Modern Bank may overdraw in the said account and that it shall always be open to the Travancore National and Quilon Bank to appropriate the same out of the amount of the said deposit without any reference to the Nayar Modern Bank. The Nayar Modern Bank originally commenced its dealings with the Quilon Bank and continued them after its amalgamation with the Travancore National and Quilon Bank. To understand the nature of the arrangement entered into at the inception of the dealings between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together with the other forms completed and the power of attorney, if any granted to the officers, who will operate on the account for registration in our books." No doubt these letters relate to a period before the amalgamation of the Quilon Bank with the Travancore National Bank but there has been no change in the nature of dealings had after the amalgamation. That it is so is clear from a letter dated 11th November, 1937, by the Travancore National and Quilon Bank to the Nayar Modern Bank Ltd., which runs as follows: "As per sanction obtained from our central office, we have the pleasure to inform you that we shall, as a special case, reduce the rate of interest on the overdraft from 2 to 1 over the deposit rate, that is to say, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id sums the Nayar Modern Bank should deposit sums of money with the Travancore National and Quilon Bank according to the ordinary course of business and pledge the deposit receipts to secure the amounts payable under the overdraft account. In effect the Nayar Modern Bank will be creating a first charge on the amounts owed by the Travancore National and Quilon Bank to it in the fixed deposit account so that this amount may be available to the Travancore National and Quilon Bank in preference to the other ci editors of the Nayar Modern Bank. The transactions therefore between the Nayar Modern Bank and the Travancore National and Quilon Bank did not constitute anything more than a relation of a debtor and creditor. In the case of the Fixed Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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