GURBAX RAI Vs. PUNJAB NATIONAL BANK NEW DELHI

JUDGEMENT

(1.) M/s. Ralla Ram, Gurbax Rai, a firm ('firm' for short) of which Ralla Ram, Gurbax Rai and Kartarchand were partners carried on business at Khanewal, District Multan (now in West Pakistan). A cash credit account was opened in the name of the firm with the branch of the Punjab National Bank ('Bank' for short) at Khanewal in the year 1946, the ceiling for borrowing having been fixed at Rs. 15 lacs. There were numerous transactions in this cash credit account. The firm used to draw and reimburse the advances according to its requirements subject to ceiling. In the year 1948, the Bank terminated the facility and called upon the firm to clear the account in which there was a debit balance of Rs. 3 lacs. The bank filed a Suit No. 67 of 49 against the firm and its partners for recovering Rupees 3,17,470/2/-

(2.) The firm in turn filed Suit No. 304 of 1949/16 of 1964 against the Bank praying for rendition of accounts in respect of the cash credit account. The principal contention in the suit by the firm was that the firm had pledged certain goods with the Bank and the Bank as a pledgee had not taken reasonable care of the goods pledged. It appears that the goods were destroyed in a fire and the Bank recovered from the insurer Rubi General Insurance Co., a sum of Rs. 59,570/2/- which the Bank was bound to give credit. The firm as defendant sought amendment of its written statement to raise the plea which was granted.

(3.) Both the suits are consolidated.