Venkataramana Rao, J.
1. This is an application by the Secretary of the All India Spinners Association, Tamil Nad Branch, for payment to him of a sum of Rs. 9200 in preference to the ordinary creditors of the Travancore National and Quilon Bank. The claim for the said amount is put under two heads : (1) a sum of Rs. 5000 being the amount paid into the Tiruppur Branch of the Bank for getting a draft, No. 1506 of 1938, in exchange drawn by the Bank on its Bajapalayam Branch in favour of one Sankararaja; and (2) Rs. 4200 being the proceeds of three cheques delivered to the Tiruppur Branch of the Bank for collection, namely (a) cheque for Rs. 3000 bearing No. N. G. 7448I dated 15th June 1938 drawn on the Canara Industrial Banking Syndicate Ltd., Payyanur; (b) cheque for Rs. 500 bearing No. M.S. 621239 dated 17th June 1938 drawn on the Indo-Commercial Bank Ltd., Vijayapuram, Trivandrum; and (c) a cheque for Rs. 700 bearing No. 112315 dated 17th June 1938, drawn on the Indo-Commercial Bank Ltd., Chidambaram. The receipt of the cash of Rs. 5000 and the three cheques is admitted by the Official Liquidators. The claim in respect of Rs. 5000 is made on the basis that the amount was specifically entrusted to the Bank for the specific purpose< of being transmitted to Sankararaja through the Bank's branch at Bajapalayam. The Official Liquidators deny this fact and submit in their counter-affidavit that the Spinners Association purchased a draft for Rs. 5000 on payment of that sum and it was nothing more than an ordinary banking transaction done in the usual course of business. The facts bear out the contentions of the Official Liquidators. The money was, not entrusted to the Bank for any specific purpose and the Bank did not receive the money in the capacity of an agent for applying the said moneys for a specific purpose. The transaction was nothing more than a purchase by the Spinners Association of the draft. I therefore disallow the claim to preferential payment in regard to this amount.
2. But the claim in respect of the proceeds of three cheques stand upon a different footing. The three receipts given by the Bank unmistakably show that the cheques were received for collection only. Further the amounts were realized by the Travancore National and Quilon Bank only subsequent to 20th June 1938, that is after the Bank suspended payment. It seems to me that the decision of Astbury J. confirmed by the Court of Appeal in In re Farrow's Bank Ltd. (1923) 1 Ch. 41 concludes the matter. In that case a cross cheque was paid into the Bank for collection and the moneys were received after the Bank suspended payment. In the course of the judgment, the learned Judge observed thus:
It is common ground that the time at which this cheque was cleared in fact and the moneys made available for Barclay's Bank as agent for Farrow's Bank was 12-30 on Monday, 20th December. Farrow's Bank however had stopped payment, if not on Saturday or Sunday certainly in the early hours of Monday morning and long before 12-30 in the day. That being so, it seems to me that after ceasing to act as a going concern and stating their intention no longer to act as a going concern they had no longer any authority from Voyce to take what was in fact his money received after the stoppage and convert it into money forming part of their assets in respect of which they would be entitled to assume the position of debtors instead of agents.
3. Following this decision I uphold the claim of the Spinners Association to preferential payment in respect of the sum of Rs. 4200 being the proceeds of the said three cheques realized by the Bank after suspension. The applicant will get Rs. 35 plus Rs. 5 for the Judge's summons for his costs which will be paid by the Official Liquidators from the assets of Travancore National and Quilon Bank. The Official Liquidators will have Rs. 35 as and for their costs.