1. Mr. Jageshar Prasad Shukul states that the nature of the transaction between him and the Bank was like this. Jageshar Prasad having some money to spare for investing in loans he handed over the money to the Union Bank and received a note-book in which it was stated that the money was for safe custody. As a matter of agreement and practice, however, Mr. Jageshar Prasad used to secure borrowers who would agree to pledge ornaments by way of security. The borrower was taken by Jageshar Prasad to the Manager of the Bank or he would go to the Manager of the Bank with a note from Mr. Jageshar Prasad. The ornament was kept by the Bank by way of security and money was advanced on an interest of 12 per cent, per annum. Out of this interest Jageshar Prasad used to get 9 per cent, and the Bank 3 per cent. No money of Jageshar Prasad used to be lent out by the Bank without any security of ornaments. ,Similarly when a man came to redeem his ornaments he would either take Jageshar Prasad to the Bank or take a note of his to the Manager of the Bank and on payment' the ornament would be released.
2. Mr. Harendra Krishna Mukerji, Official Liquidator, states that this is a correct representation of the transaction. Mr. Jageshar Prasad and Mr. Mukerji are also agreed that in the pass-book given to Mr. Shukul: the book numbers of transactions by which money was lent on security of ornaments used to be noted, and afterwards a slip of paper used to be given to Mr. Jageshar Prasad on which were entered the particulars of the transactions of the loans entered into on his behalf by the Bank.
3. The question under the circumstances is whether Mr. Shukul is to be treated as a secured creditor or whether he should rank as an ordinary creditor of the Bank.
4. No Counsel appears for Jageshar Prasad and I have heard Mr. Harendra Krishna Mukerji on behalf of the Bank.
5. In my opinion Mr. Shukul is in the position of a secured creditor. The reasons are these. His money was not at the disposal of the Bank like that of any other customer. Jageshar Prasad's money was always secured on a pledge of ornaments and the transactions were all entered into with the consent and approval of Mr. Shukul. It is true that the ornaments over which the money of Mr. Shukul was secured did not belong to the Bank. But if we look into the spirit of the transaction we see that Jageshar Prasad had the security of ornaments and he could never lose his money so long as the ornaments were available. It is common ground that Kedar Nath eventually disposed of the ornaments in a way detrimental to the interest of Mr. Shukul but that does not make any difference in principle. Kedar's act was in breach of confidence.
6. Holding as I do that Mr. Jageshar Prasad is a secured creditor I direct that he shall rank as such. No Counsel is appearing and, therefore, there is no order as to costs.