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M.K. Sreedhara Kurup Vs. the Central Banking Corporation of Travancore Ltd. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKerala High Court
Decided On
Case NumberAppln. No. 430 of 1966 in B.C.P. No. 4 of 1962
Judge
Reported inAIR1967Ker134
ActsCompanies Act, 1956 - Sections 511
AppellantM.K. Sreedhara Kurup
RespondentThe Central Banking Corporation of Travancore Ltd.
Advocates: C.K. Sivasankara Panicker and; P.G. Parameswara Panicker, Advs.
DispositionPetition allowed
Excerpt:
- .....only (and payment of the proceeds to him in cash) and not for collection and credit to his current account with the branch. it is true that he had a current account opened on 25-1-1955 in which the only credits seem to me the proceeds of bills collected on his behalf, and that he used to draw from this account such amounts as he required--not the amount of the bill collected from time to time. had matters rested there it might have been legitimate to infer that the cheque in question was also banded over for collection and credit to this account. but, if that were so, what the bank would have done would have been to give the applicant a credit slip by way of acknowledgment. what it actually did was, however, to pass him a letter of acknowledgment dated 28-1-1961 saying that the.....
Judgment:
ORDER

P.T. Raman Nayar, J.

1. I accept the applicant's case that the cheque dated 13-2-1961 for Rs. 8,000 was handed over by him on 28-2-1961 to the Mavelikara branch of the bank for collection only (and payment of the proceeds to him in cash) and not for collection and credit to his current account with the branch. It is true that he had a current account opened on 25-1-1955 in which the only credits seem to me the proceeds of bills collected on his behalf, and that he used to draw from this account such amounts as he required--not the amount of the bill collected from time to time. Had matters rested there it might have been legitimate to infer that the cheque in question was also banded over for collection and credit to this account. But, if that were so, what the bank would have done would have been to give the applicant a credit slip by way of acknowledgment. What it actually did was, however, to pass him a letter of acknowledgment dated 28-1-1961 saying that the cheque would be dealt with as desired.

And when the applicant wrote to the bank on 27-5-1961 demanding immediate payment and pointing out that the cheque had been handed over on promise of cash payment within six weeks--if the cheque had been handed over for collection and credit to his current account what the applicant would have done would have been to issue a cheque on his account for the amount required by him--the agent of the bank did not deny this in his reply of the same date but only said that he would Rive a reply after consulting the Manager, apparently of the head office. This it seems to me proves that the petitioner's case is true. That being so the bank's action in crediting the proceeds of Rs. 7989-36 to the applicant's current account on 1-4-1901 was unauthorised.

2. I allow this application and direct the liquidator to pay the petitioner the sum of Rs. 7989-36 in priority as a sum held by the bank in a fiduciary capacity.

3. The liquidator will apply for the consequential variation of the list of creditors.


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