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The Official Assignee of Madras (and as Such the Assignee of the Properties and Credits of Arbuthnot and Co.) Vs. D. Rajam Ayyar - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtChennai
Decided On
Judge
Reported in(1913)ILR36Mad499
AppellantThe Official Assignee of Madras (and as Such the Assignee of the Properties and Credits of Arbuthnot
RespondentD. Rajam Ayyar
Cases Referred and The Official Assignee of Madras v. Smith
Excerpt:
banker and customer - payment to bank with instructions as to disposal, effect of--'in suspense' account, meaning of. - - the madras railway clearly did not intend messrs. in their letter to raj am ayyar they suggest that if he desires to open an account with them he can do so, indicating clearly enough that till he does so, they are not his bankers- it is not clear why they received the money from the railway company, but possibly they hoped to get a new customer;.....madras railway company remitted money to messrs. arbuthnot & co., to the credit of the claimant, rajam ayyar. arbuthnot & co. informed rajam ayyar, who was not one of their customers, that this had been done and asked for his instructions. but before be could instruct them they suspended payment. now it seems to me that m this case the principle enunciated in the official assignee of madras v. smith i.l.r. (1909) mad. 68 is not applicable. the madras railway clearly did not intend messrs. arbuthnot & co. to use the money as their bankers, and arbuthnot & co., it seems to me could not possibly have done so. they were not the bankers of the railway company and the money remitted was not an advance to them by the railway company; it was money due to and in course of remittance to a third.....
Judgment:

Miller, J.

1. This is a somewhat peculiar case. The Madras Railway Company remitted money to Messrs. Arbuthnot & Co., to the credit of the claimant, Rajam Ayyar. Arbuthnot & Co. informed Rajam Ayyar, who was not one of their customers, that this had been done and asked for his instructions. But before be could instruct them they suspended payment. Now it seems to me that m this case the principle enunciated in The Official Assignee of Madras v. Smith I.L.R. (1909) Mad. 68 is not applicable. The Madras Railway clearly did not intend Messrs. Arbuthnot & Co. to use the money as their bankers, and Arbuthnot & Co., it seems to me could not possibly have done so. They were not the bankers of the Railway Company and the money remitted was not an advance to them by the Railway Company; it was money due to and in course of remittance to a third party and Messrs. Arbuthnot & Co. did not treat the money as money lodged with them as bankers. In their letter to Raj am Ayyar they suggest that if he desires to open an account with them he can do so, indicating clearly enough that till he does so, they are not his bankers- It is not clear why they received the money from the Railway Company, but possibly they hoped to get a new customer; for some reason they did receive it, but I do not think they held it as bankers of Rajana Ayyar. They held it so far as the evidence shows as agents of the Railway Company for remittance to Rajam Ayyar.

2. Mr. Downing argues that the money should be treated as money remitted to Arbuthnot & Co. by Rajam Ayyar without instructions; we must, he says, assume that Rajam Ayyar asked the Railway Company to remit to Arbuthnot & Co.

3. It is no doubt probable that some such request was made, but I am not prepared to assume against Rajam Ayyar that he did more than ask that the money might be sent to him through Messrs. Arbuthnot & Co. It would not be right to assume more than this seeing that he was not a customer of Messrs. Arbuthnote & Co., and so far as I know gave no instructions himself to Messrs. Arbuthnot & Co.

4. I find nothing here to raise the presumption that Messrs. Arbuthnot & Co. received or were intended to receive the remittance as bankers and I think therefore that the Appeal must be dismissed with all costs out of the estate.

Munro, J.

5. The distinction drawn by Miller, J., between this case and The Official Assignee of Madras v. Smith (1909) I.L.R. 32 Mad. 68 seems to me to be a real distinction though I do not thick it was seriously insisted upon at the former hearing. I therefore agree to the proposed order.

Abdur Rahim, J.

6. I agree that the appeal should be dismissed for reasons which I have stated at length in, the appeal against the order of the learned Commissioner in Insolvency.


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