9911796707
TMI Blog1990 (4) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... United Commercial Bank Limited which has since been styled as 'UCO Bank', the appellant in this appeal. The case of the respondent-plaintiff was that there was an oral agreement with the Bank on September 2, 1950 under which the latter inter alia was to receive bills, documents and air receipts sent by or on behalf of the plaintiff from his agents or suppliers and would release and/or take delivery of goods sent by them, as and when the goods arrive at Agartala. The Bank would hold or keep the said goods stored in its godown for and on behalf of and on account of the plaintiff for his benefit etc. It was also alleged that payment of the bills in respect of goods dispatched to the Bank should be made by the plaintiff. He should be given delivery of the goods and air receipts by the Bank according to his convenience and requirement. It was further stated that under the said terms and conditions, the Banker constituted himself and acted as an express trustee and/or agent of the plaintiff in relation to the said goods and air receipts and thus stood in fiduciary relationship with the plaintiff. Complaining non-delivery of goods even after receiving payment thereof, the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the plaintiff. On Issue No. (9) as to the existence of agreement, it was observed: The evidence on record shows that regular accounts of goods for the plaintiff would be maintained by the defendant Bank. Although the purpose of current account No. 391 of the plaintiff cannot alter the nature being that of debtor and creditor attributable to the account, the factum of the account and its operation also indicate that there was an agreement between the parties. This does not however exclude necessary agreement or arrangement by the bank with the Calcutta parties. Debits in the account of the plaintiff started to be made from 13.9.50 in connection with transactions of the plaintiff, whereas the alleged agreement be- tween the bank and S.T. Bros, occurred in March, 1951. All these factors lead to the inference that there was an agreement or arrangement between the bank and the plaintiff regarding payment of bills and charges for the account of the plaintiff and otherwise and regarding storing of those goods received by the Bank in its godowns, of which the plaintiff came to be owner and for delivery of those goods as and when required by the plaintiff. These are the minim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als on record I find that there was fiduciary relationship between the plaintiff and the defendant bank. This issue is decided in favour of the plaintiff. Accordingly, the suit was decreed in part directing delivery of goods or the value equivalent to ₹ 1,26,500. A Commissioner was also appointed to take accounts with regard to the transactions. The High Court of Calcutta has affirmed the decree of the trial court. As to the question of relationship between the Bank and customer, the High Court observed: In our opinion if we find that the plaintiff paid the value of the goods and the appellant bank neither delivered the goods nor rendered accounts, a fiduciary relationship could exist between the plaintiff and the bank in respect of the goods for which value was paid by the plaintiff. The Bank by obtaining leave has now appealed to this court. In opening the appeal, Counsel for the appellant urged that the case of the plaintiff based on oral agreement which is expressly contrary to banking transactions ought not to be relied upon. It was claimed that the Bank was a collecting agent for the supplier of goods and not an agent or trustee for the respondent. Adjustment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overdrawings by the customer when allowed by the banker are treated as loans.' They will be debited to the current account. Indeed it is through the current account, and by means of overdrafts on it that loans and advances are normally made by bankers to their customers . (Law of Banking by Lord Chorley 6th ed. at 167-168). In Paget's Law of Banking, 9th ed. at 82-83, it is stated that the current or drawing account may be either a credit or an overdrawn account. A credit account is made up of moneys paid in by the customer, the proceeds of cheques and bills collected for him, coupons collected, interest and dividends paid direct to the banker and from various other sources, less any money properly paid out. Moneys from different sources, once they have found their way into the current account, are treated as one entire debt. This is the normal method of banking operation and the maintenance of the current account in this case appears to be not outside this principle and therefore, no inference could be drawn that the Bank stood in fiduciary relationship with the plaintiff. Next question for consideration is whether the Bank acted as agent of the plaintiff in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh the factum of delivery of goods to the plaintiff. The banker bailee gratuitous or for reward is bound to take the same care of the property entrusted to him as a reasonably prudent and careful man may fairly be expected to take of his own property of the like description. (See: Halsbury's Laws of England 4th ed. Vol. 3 para 93). In fact a paid bailee must use the greatest possible care and is expected to employ all precautions in respect of the goods deposited with him. If the property is not delivered to the true owner, the banker cannot avoid his liability in conversion. (See: (i) The Law Relating to Banking by T.G. Reeday 4th ed. p. 81; (ii) Law And Practice relating to Banking by F.E. Ferry 5th ed. p. 21). In the light of these principles the Bank could not avoid the liability to return the goods as agreed upon or to pay an equivalent amount to the plaintiff. Even if we assume that the goods were delivered to a wrong person, the Bank has to own the responsibility to pay the plaintiff. The liability of banker to customer in such a case is absolute even if no negligence is proved. In Hals- bury's Laws of England (supra, para 94), it is stated where the bank delivers t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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