BHARAT NIDHI LIMITED Vs. TAKHATMAL DEAD

JUDGEMENT

(1.) M. R. Malhotra was working as a contractor to the military and other authorities. He needed funds for the execution of his contracts. The appellant Bank formerly known as the Bharat Bank Ltd., agreed to finance the contracts and to advance monies to Malhotra against his bills for supplies under the contract. For the purpose of carrying out this arrangement Malhotra executed an irrevocable power of attorney in favour of the appellant on July 13, 1946. The power of attorney recited.

(2.) The sole question in this appeal is whether the power of attorney dated July 13, 1946 coupled with the endorsement on the bill dated July 19, 1948 amounts to an equitable assignment of the monies due under the bill in favour of the appellant. There are many decisions on the question as to what constitutes an equitable assignment. The law on the subject admits of no doubt. In Palmer vs. Carey, 1926 Ac 703 at page No. 706 Lord Wrenbury said:

(3.) The question whether a document amounts to an equitable assignment or not is primarily one of construction but we may mention a few decisions which throw light on the matter. In Jagabhai Lallubhai vs. Rustamji Nauserwanji, (1885) ILR 9 Bom 311 the Bombay High Court held that an agreement to finance the borrower and a power of attorney of even date to receive the monies due to the borrower under certain contracts had the effect of an equitable assignment of the funds. In Loonkaran Sethiva vs. State Bank of Jaipur, C. A. No. 644 of 1966, D/- 25-4-1968 this Court held that a power of attorney authorising a lender to execute a decree then pass in favour of the borrower or which might be passed in his favour in a pending appeal and to credit to the borrower's account the moines realised in execution of the decree amounted to an equitable assignment of the funds.