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TMI Blog1924 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... nk are members of the said clearing house. 3. The practice of the clearing house in April was as follows:-Clearing took place twice daily, once in the morning at 12 and once in the afternoon at 3, except on Saturdays when the hours were 12 noon and 1 p. m. The various banks sent clerks to the clearing house to whom were handed over all cheques drawn upon their respective banks. Those cheques were then according to the applicant bank, provisionally debited against the respective banks in the accounts kept by the Imperial Bank of India and provisionally credited in favour of the banks producing them. The cheques were then taken by the various clerks to their respective banks for verification and approval. In case of non-payment of any docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, according to the applicant bank, provisionally made by the Imperial Bank of India in the accounts of the said two banks with the Imperial Bank of India. The Alliance Bank received provisional credit for the cheques delivered and the Chartered Bank was provisionally debited with the amount of the said cheques. The cheques were then brought away by the Chartered Bank's clearing clerk to the Chartered Bank for examination. 7. On examination, however, it was found that the said cheques were not in order; at any rate, they were not such as the Chartered Bank was prepared to accept, and they were accordingly dishonoured by the Chartered Bank and returned the same day to the Alliance Bank with a memo attached giving the reason for disho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in full of the three debit clearing vouchers and to demand that credit entries should be made in their account in the clearing with regard to the said throe debit clearing vouchers received by thorn on April 27, 1923, that being the last day on which the Alliance Bank did business. 10. According to the liquidators of the Alliance Bank of Simla, Ltd., there were no provisional credits or debits as suggested by the Chartered Bank and that the position was as follows: Each bank was entitled to receive from the Imperial Bank in accordance with the said rules a voucher authorising transfer, from its clearing banker's account with the Imperial Bank, such amount as might be found to its credit on striking a balance in respect of the agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r provided for by Rules 7 and 9 of dishonour by it or by the drawee bank of any cheque or other document included in the said aggregate debit or credit entry in the regulations for the Calcutta Bankers Clearing House. The object of the arrangement is really to dispense with the use of coin or bank notes in the settlement of large transactions that necessarily take place there. 14. The next question is, on the facts presented before me, what was the position of the Alliance Bank of Simla, Ltd., when they received the cheques in question from their customers for credit of their accounts? Did they receive as agents for collection or as holders for value of the cheques? 15. The character in which the Alliance Bank received the cheques in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time when they were entitled to claim thorn as part of their assets: Farrows Bank (1921) 1 Ch. 41. 18. There was in fact no relationship of debtor and creditor as between the Alliance Bank and their customers and, there-fore, my opinion on the facts presented before me is that the liquidators of the Alliance Bank of Simla, Ltd., must pay out of the assets in their hands the full amount claimed by the Chartered Bank in their application. 19. I am not unmindful of Mr. Page's vigorous argument based on the words of the regulations of the Calcutta Bankers' Clearing House and on the words used in the three debit notes signed by the Alliance Bank of Simla Ltd., but I must look at the substance of the transaction and resist being led ..... X X X X Extracts X X X X X X X X Extracts X X X X
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