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TMI Blog1955 (12) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... the money covered by the fixed deposit receipt and to credit the proceeds to the overdraft account. Vide Ex. P. 2. At the same time a letter Ex. P. 3, addressed by Shanmugha Nadar to the K. K. D. and V. B. K. and Co. was handed over, to the Hanuman Bank by Which the company was asked to pay the proceeds of the fixed deposit receipt with interest thereon to the Hanuman Bank Ltd. On 4-9-1946 the Kumbakonam branch of the Hanuman Bank Ltd. wrote to the K. K. D. and V. B. K. and company intimating them about the act of this pledge. 3. The fixed deposit matured on 15-6-1947. The following day P. W. 1 who was then the agent of the Kumbakonam branch, sent P. W. 2, an employee of the Hanuman Bank Ltd. to the K. K. D. and V. B. K. and Company with the receipt for payment. The agent of the K. K. D. and V. B. K. and Company told him that payment would be made after hearing from the parties, but he did not commit himself to anything in writing. On 17-6-1947, P. W. 2, went again and asked for payment. He was then told that the money payable on the fixed deposit receipt had been adjusted towards sums which Shanmugha Nadar owed to the company. Subsequently notices passed between the parties and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable. On 16-6-1947 he sent P. W. 2 to the company to collect the amount on the fixed deposit receipt. The fixed deposit receipt was returned without any endorsement and with the oral message that payment would be made in the evening. The fixed deposit receipt was presented again on 17-6-1947 and on that day it was returned with an endorsement that the amount had been adjusted. Thereupon he wrote Ex. P. 6, to the company, and then, the usual notices followed. 7. P. W. 2 was an accountant in the Kumbakonam branch of the Hanuman Bank Ltd., between 1938 and 1947, and, in general he corroborated the evidence of P. W. 1. 8. I considered it necessary to have the evidence of Shanmugha Nadar, the person in whose name the fixed deposit receipt stood, and, he was examined as C. W. 1. He testified that on 20-8-1946 his father Rathnaswami Nadar applied for overdraft facilities in the Hanuman Bank Ltd. He had a fixed deposit of ₹ 3000 in the K, K. D. and V. B. K. and Company. He handed over that receipt to the Hanuman Bank Ltd., by way of security. He also passed a letter Ex. P. 2. A further letter referred to at the end of Ex. P. 2 was delivered by himself in person at the office of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case reads as follows: "A direction in writing to pay the amount due on an instrument endorsed on such instrument, by the payee thereof, coupled with the delivery of the instrument so endorsed to the person to whom payment is directed is an assignment of such document within the meaning of S. 130 of the Transfer of Property Act. 12. In the present case Shanmugha Nadar, the depositor, very explicitly stated in Ex. P. 2, "You may take the amount from the K. K. D. Bank on maturity with interest and credit the same to the O. D. account when matured. To that effect I have also given a letter to the said Bankers and you may also get an undertaking letter from them if need be." These words, I think, clearly make manifest the intention of the parties and are sufficient to effect an assignment of the receipt and the money it represented. 13. The next Question is, was the K. K. D. and V. B. K. and Company given information of the fact that there had been an assignment in favour of the Hanuman Bank Ltd. of the fixed deposit receipt? Mr. Srinivasa Aiyar very strongly argued that no intimation had been given. But, the evidence and the probabilities of the matter are both overwh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame both by me and the Hanuman Bank Ltd. It is not therefore possible to say that the evidence of C. W. 1 is an afterthought. Mr. Srinivasa Aiyar pointed out that in the following paragraph in Ex. P. 5 Shanmugha Nadar has stated that he had made the pledge only after having obtained the permission of the K. K. D. and V. B. K. and Company and that this allegation is untrue and that in consequence his entire evidence must be discarded. In my view the circumstance that Shanmugha Nadar made this further statement in Ex. P. 5 is not sufficient to throw doubts on his other statement that he did inform the K. K. D. and V. B. K. and Company of the fact that the fixed deposit receipt had been dealt with in favour of the Hanuman Bank Ltd. We have further the oral evidence of P. Ws. 1 and 2 relating to the circumstances under which demand was made for payment of the fixed deposit and the request of the K. K. D. and V. B. K. and Company to present the document on the following day. One would have thought that if the K K. D- and V. B. K. and Company had not been notified they would have seized on that fact and mentioned it at once when they were looking out for an excuse to avoid payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "may in the absence of a contract to the contrary, retain, as a security for a general balance of account, any goods bailed to them"; a right which is compendiously described as a banker's lien. Now, it seems to me that it would not be strictly correct to treat the present transaction as one of lien. You can exercise a lien only over the property of some one else; you cannot exercise a lien over your own property. When goods are deposited with or securities are placed in the custody of a bank it would be correct to speak of the rights of the bank over the security or the goods as a lien because the ownership of the goods or securities would continue to remain in the customer. But, when moneys are deposited in a bank the ownership of the moneys passes to the bank and the right of the bank over the moneys lodged with it would not be really a lien at all. It would be more correct to speak of it as a right of set off or adjustment. 18. This, however, is really a subsidiary point, and, the question is - whether you call it a lien or a right of set off - can the K. K. D. and V. B. K. and Company lawfully claim to adjust the money covered by the fixed deposit receipt tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there were subsequent transactions between the company and the original depositor. From the time when the company had notice that the right was transferred to the plaintiff he had nothing to do with the subsequent transaction between the company and the person who delivered the note to him. 21. Another case in point is P.W. Greenhalgh and Sons v. Union Bank of Manchester, 1924 2 KB 153 (E). A Banker who has agreed with a customer to open two accounts in his name, and who holds bills which the customer has specifically appropriated to one account, is not entitled without the customer's consent, to transfer the proceeds of such bile to the other account. I recognize that the facts in that case and the facts before me are different. Nevertheless, this decision would show that the contention of Mr. Srinivasa Aiyar that a banker can adjust or set off whenever he pleases any money in his hands is not correct. 22. Mr. Srinivasa Aiyar next observed that in the present case if the depositor had on 16-6-1947 asked the K.K.D. and V.B.K. and Company for payment the company could have refused to pay him and told him that they had adjusted the money towards their claim. How then, ask ..... X X X X Extracts X X X X X X X X Extracts X X X X
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