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TMI Blog1940 (9) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. Government Promissory Notes of the face value of Rs. 10,000 but valued by her at that time at Rs. 8,700. On the following day she deposited a sum of Rs. 1,300 in cash which was kept in fixed deposit. This fixed deposit matured on April 27, 1934, and the amount was then repaid to Mst. Krishna Piari, the Bank apparently remaining satisfied to have security for Nanak Chand to the extent of Rs. 8,700 only, or whatever amount the promissory notes might from time to time represent. As a result of this deposit made by Mst. KrishnaPiari in April 1933 Nanak Chand was appointed cashier with effect from May 1, 1933, and continued to be cashier up to October 15, 1935, when compulsory liquidation of the Bank was ordered. Prior to the compulsory liquidation, the Bank had gone into voluntary liquidation on July 12, 1935. On May 20, 1935, Mst. Krishna Piari served a notice on the Bank stating that she did not wish to continue as surety for Nanak Chand Kapur any longer and demanding back from the Bank her promissory notes. These notes were, however, never forthcoming and never returned to her. On July 4, Mst. Krishna Piari in the course of correspondence with the Bank agreed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be traced, the Official Liquidator could not return those notes. It was remarked that the notes had disappeared from the Bank and nobody knew what had happened to them, hence their return was impossible. He went on to consider the amount to which Mst. Krishna Piari was entitled in replacement of the notes, and he held that the notes were valued at Rs. 8,700 at the time when they were deposited and the present market value at the date of his order was only very slightly different from the value then stated, and he accordingly allowed the claim for Rs. 8,700 less Rs. 3,341 odd. On the second issue reliance was placed upon a decision of the Madras High Court, In the matter of Travancore National Quilon Bank Ltd. [1939] AIR 1939 Mad. 337; 9 Comp. Cas. 60 in which it was held, with reference to cash amounts deposited with the Bank by certain employees as security for the good behaviour of those employees, that "as the amounts were received by the Bank on a specific understanding to be applied by the Bank for a specific purpose, such amounts constituted trust money in the hands of the Bank and did not form part of the assets of the Bank divisible among its creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears to have lost sight of the provisions of Section 77 of the Indian Trust Act. That section provides that: "A trust is extinguished : ( a )When its purpose is completely fulfilled; or ( b )When its purpose becomes unlawful; or ( c )When the fulfilment of its purpose becomes impossible by destruction of the trust property or otherwise, or ( d )When the trust, being revocable, is expressly revoked". It is clear that ( b ) and ( c ) have no application in the present case. It is not shown that the trust property has been destroyed. Learned Counsel would suggest that clause ( d ) applies and that by her notice of May 20, 1935, Mst. Krishna Piari expressly revoked the trust, but a trust can only be revoked in the circumstances mentioned in Section 78 of the Indian Trusts Act, and learned Counsel has not sought to show that any of the provisions of that section is applicable to the present case. It is clear that there is no express revocation of the trust by the demand for the return of the money. On the contrary the demand made by Mst. Krishna Piari seems to be a demand for the performance of the trust. The trust created by the deposit of these notes with the Bank fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the Bank has not produced its accounts in Court, it cannot be heard to say that there is no evidence as to what has become of these Promissory Notes. Learned Counsel for the respondent referred in this connection to Chidambaram Chettiar v. Ayyappa Chettiar [1935] AIR 1935 Mad. 152 in which it was held that "If a defendant suppresses his accounts or has falsified them, the Court will presume everything most unfavourable to him consistent with the established facts." Learned Counsel for the respondent has further pointed out that it is not open to the appellant to contend that the respondent was not entitled to follow these sums on the ground that they are not shown to have been included in the Bank's monies, because in the list of debts and claims prepared by the Official Liquidator and supported by his affidavit dated February 24, 1938, he has described Mst. Krishna Piari's claim on p. 26 in the following form ; We includes her claim in the list of preferential claims under Section 234 of the Indian Companies Act and the entry in the list is as follows : S. No. 1. No. of the list 218. Name Mst. Krishna Piari. Particulars of debt or claim Security deposit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes for some period and then ceased paying. Had the promissory notes been in the hands of the Bank, as they should have been, Mst. Krishna Piari would have been able to recover the interest accruing right up to the date on which she got the promissory notes back. She is not an ordinary creditor, and she is in our opinion entitled to recover interest up to the time of payment of the amount due to her, as held by the learned Company Judge. The last point urged is that the learned Company Judge should not have directed payment of the amount due to Mst. Krishna Piari within 30 days. It is contended that there are a number of similar cases and that all these will have to be paid simultaneously, and if the assets are not sufficient they will have to be paid pro rata. Learned Counsel has, however, to admit that the Official Liquidator has money available to pay both this and all other preferential claims as was stated orally to the learned Company Judge. In these circumstances we can find nothing wrong with the order made by the learned Company Judge. A cross-objection has been filed on behalf of the respondent Mst. Krishna Piari in which it is urged, (1) that the G.P. Notes s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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