Venkataramana Rao, J.
1. This is an application by one Veerappa Chettiar claiming a set-off of the amounts due and payable by the Bank in respect of Fixed Deposit Receipt No. 64/38 dated 6th March 1938 in the accounts of its branch office at Karaikudi for Rs. 7500 in the name of himself and his mother 'Visalakshi Achi payable to either or survivor and four cash certificates of the total value of Rs. 2071-8-0 against a sum of Rs. 10,087-15-9 owing by him to the Bank on overdraft account. Mr. Sitarama Rao, his learned Counsel, has not chosen to press his claim in regard to the cash certificates.
2. Therefore the only question that has to be considered is that relating to the amount covered by the fixed deposit receipt. It is the case of the applicant that the said sum solely belongs to him and his mother Visalakshi has no interest therein and that her name was included at the time of the original deposit in 1937 as the applicant was then in failing health. The Official Liquidators oppose the claim on the ground that from the terms of the fixed deposit receipt it is a joint debt payable by the Bank and there is nothing to indicate that Visalakshi was only a namelender and therefore there could not be a set-off of a joint debt against a separate debt. It is no doubt true that where there is an amount payable by A in his individual account and an amount payable to A and B in their joint account, the two accounts cannot be set-off, but if it could be shown that, though the account is in the name of A and B, A is solely entitled to the amount, a set-off has always been allowed. As Cotton L.J. puts it in Ex. parte Morier; In re Willis , Percival & Co. (1880) 12 Ch. D. 491, the question is whether
it can be said that the money so absolutely belongs to that one of the two persons in whose joint names the account stands, who has another account of his own that we must treat it as his sole property, and require the balance to be struck between the two accounts.
3. Whether the property belongs solely to A, can be found on evidence: vide Hirschorn v. Evans (1988) 2 K.B. 801 where a deposit receipt stood in the name of a husband and wife was examined to find out whether the money belonged solely to the husband or jointly to the husband and wife. Mr. Sitarama Rao has examined the applicant to prove that the money covered by the fixed deposit receipt solely belonged to him. It is clear from the evidence that he was carrying on business for some years before the deposit in the Bank, that the moneys from his business were from time to time invested in the Chartered Bank of India Ltd., that the account in the Chartered Bank stood solely in his name, that in March 1937 there was a balance of nearly Rs. 9000 in the Chartered Bank and he drew a cheque on the Chartered Bank for Rs. 8670 in favour of the Travancore National and Quilon Bank Ltd., and that he directed the latter Bank to issue a fixed deposit receipt for Rs. 7500 in the name of himself and his mother Visalakshi payable to either or survivor and utilise the balance in the purchase of some rubber shares. It is also clear from his deposition that Visalakshi was indebted to him in the sum of over Rs. 2000 on the date of the said deposit, and that the said deposit was renewed for another year on 6th March 1938. I see no reason to disbelieve his evidence. It must therefore be found that the said sum of Rs. 7500 is the sole property of the applicant. Once this conclusion is arrived at, the applicant will be entitled to a set off as claimed by him. The rule of law is absolutely clear and is thus stated in Hart's Law of Banking, 'Vol. I, at pages 309 and 310 thus:
Where a person has an account in his own name and has another in the joint names of himself and a second person with the same banker, upon the bankruptcy of the latter the one account cannot be set off against the other, unless the person having the sole account is solely interested in the balance of the joint account, so that equity would have compelled the other person, without imposing any terms or directing any enquiry, to transfer the account into his name alone.
4. sIt is based on the case in Ex. parte Morier; In re Willis , Percival & Co. (1880) 12 Ch. D. 491 and the principle laid down in that case has always been accepted as good law. In that case two persons, a brother and sister were executors of an estate and they had a joint account in their joint names. The brother was also indebted to the Bank in a separate account. The question arose whether the amount in one account could be set off against the amount in the other. It was found in that case that it could not be ascertained that the brother was solely entitled to the amount because it depended upon the taking of an account and finding out whether the account would result in a balance in favour of the brother. The learned Judges took the view that the brother and the sister were in the position of joint creditors of the Bank having joint assests in the Bank and no set-off could be allowed. In the course of the judgment, James L. J. remarked thus:
Unless it could be made out clearly that A and B were trustees of the fund for A, it seems to me there could not be an equitable set off, because the money is due in autre droit and where the money is due in autre droit the only exception which equity has introduced into the principle of a legal set off is when the money is really and truly the property of one man in the name of another, not when the result of taking the accounts would be to shew that the ultimate balance would be his property, but when it is nothing but what we used to call in the Privy Council a benami account, that is, an account put by one man in the name of another merely for his own convenience.
5. The learned Counsel for the Official Liquidators sought to rely on the following observations of Brett L. J, namely, that a set off could not be allowed unless a Court of Equity, 'without any terms or any further enquiry, would have obliged the sister to transfer the account into her brother's name, alone.' His contention is that this language imports that without any evidence the property must be found to belong to the applicant and not as a result of any evidence being adduced. It seems to me that the contention is based on a misapprehension of the language used by Brett L.J. What Brett L.J. really meant by the use of the expression 'without any further enquiry' was without taking any account. That this must be his meaning is clear from the observations of James L.J. in the same case in the passage above cited and also at pages 499 and 500 as Brett L.J. concurred in the judgment of James L.J., for the reasons given by that learned Judge (vide p. 500). It is in this sense that Brett L.J. used the expression 'further enquiry' in his judgment. In view of my finding that the amount of Rs. 7500 covered by the fixed deposit receipt solely belongs to the applicant I direct a set-off of the said sum against the money owing by the applicant to the Bank. The applicant will have the cost of the Judge's Summons and Rs. 100 as and for his Counsel's fee. The Official Liquidators will have Rs. 100 for their costs, the costs to come out of the assets of the Bank.