KRISHNA KISHORE KAR Vs. UNITED COMMERCIAL BANK

JUDGEMENT

(1.) This is a suit for recovery of Rs. 2,26,858.26 instituted by the plaintiff against the defendants on account of the following facts: It is alleged in the plaint that the plaintiff, in his business of Isis Coal Company, had opened a cash credit account with the defendant bank. In his said business, the plaintiff had dealings and transactions with Durgapur Project Limited, the defendant No. 2 herein, On 2-8-62, the defendant No. 1 at the request of the plaintiff, executed a bond for Rs. 2,00,000/- in favour of the defendant No. 2 guaranteeing payment for coal supplied and to be supplied to the plaintiff by the defendant No. 2. As against this bond, the plaintiff, on 2-8-1962, executed a counter guarantee in favour of the defendant No. 1 on certain terms and conditions contained therein. The period of guarantee was from 2-8-1962 to 1-8-1963 (Ext. A pages 6 and 7). In respect of the Bank guarantee the defendant No. 2 had demanded margin money from the plaintiff to cover the said guarantee and pursuant to the same the plaintiff from time to time paid an aggregate sum of Rs. 1,83,500/- which was admitted by the defendant bank by letter dated 4-5-1963 (Ext. A page 27).

(2.) The plaintiff alleged that the guarantee period in favour of the defendant No. 2 had expired and he had paid in full the entire dues of the defendant No. 2 and had demanded refund of the margin money of Rs. 1,83,500/- from the defendant Bank but it failed and neglected to refund the same. The bank is holding the said sum by way of Trust or money had and received and is bound to refund the same with interest. Hence this suit,

(3.) The defendant bank filed its written statement disputing that plaintiff had paid the defendant No. 2 in full on account of the fact that the bond was not returned by the defendant No. 2 duly discharged. According to the defendant Bank a sum of Rs. 19,787.32 p. was due to the Bank by the plaintiff in the cash credit account and the bank is entitled to recover the same. It was further alleged that on 27-11-1962, the Bank at the request of the plaintiff, had executed another guarantee bond for Rs. 1,00,000/- in favour of the President of India guaranteeing payment for plaintiff's transactions with the Eastern Railway. AS against this guarantee, the plaintiff also executed a counter guarantee in favour of the bank. In terms of these two bonds, the bank was unconditionally authorised to pay to the President of India and/or the Eastern Railway on demand without any reference to the plaintiff. It was also agreed that the plaintiff would reimburse the Bank on demand and in default Bank was to recover the same from the accounts or securities held or to be held by the Bank (Ext. A pages 14 and 17). The defendant bank alleged that it had paid Rs. 56,740/-to the Eastern Railway on their demand and as such became entitled to recover the same from the plaintiff. The sum of Rs. 19,787.32 and Rs. 56,740/- aggregating to Rs. 76,527.32 were adjusted by the bank against the sum of rupees 1,83,500/- in exercise of its lien and/or general lien. Alternatively, the defendant bank was entitled to appropriate and set off its said claims against Rs. 1,83,500/- and had already appropriated the said sum of Rs. 76,527.32 against the said sum of Rs. 1,83,500/-. The plaintiff was not entitled to refund as the defendant No. 2 did not return the guarantee bond duly discharged. The allegations of trust or money had and received as alleged in the plaint were all denied specifically.