GHANASYAM SAHA Vs. PIONEER BANK LTD., (IN LIQUIDATION)

JUDGEMENT

(1.) The appellant, Ghanasyam Saha. was a customer of the Pioneer Bark Limited, now in liquidation, and appears to have become so by opening an overdraft account in the Burra Bazar Branch of the bank on the 2nd day of Dec. 1944. One of the terms on which the account was opened was that the appellant would be able to draw money to the limit of Rs. 25,000 and he hypothecated some pulses and grains in the bank's godown as security for the loan on the same day the account was opened. The appellant also executed a Hundi for Rs. 25,000 by way, it would seem, of a further collateral security. What happened subsequently is somewhat obscure. On the 26th of Aug., 1948, the appellant admittedly executed two fresh Hundies, one for Rs. 20,000 and another for Rs. 5,000 in favour of the Pioneer Bank, but accepted the Hundies as payable at the Reserve Bank of India. The Hundies were endorsed by the Pioneer Bank in favour of the Reserve Bank. The appellant's case is that the Pioneer Bank repledged the securities he had given to the Reserve Bank of India and that he was told of the transaction when, on the 13th of Sept., 1948, he went to the Pioneer Bank and offered to pay up the whole debt at once. On the next day, that is to say, on the 14th of Nov., 1948, the Pioneer Bank obtained an order for a moratorium. The appellant claims to have gone to the Reserve Bank on the same date and offered to have his goods released on payment of the sum due from him, but his case is that as the Hundies were for Rs. 25,000, he was required by the Reserve Bank to) pay that amount. He did pay it on the 18th Sept., 1948, and obtained a release of his goods as also the cancellation of the Hundies.

(2.) On the 25th of June, 1949, the Reserve Bank appears to have intimated to the Pioneer Bank that it had received from the appellant a sum of Rs. 24.825-5-6 and that the Pioneer Bank had been credited with that amount. The period of the moratorium expired on the 10th of July, 1949, but on the next day, a winding up older was made. The Pioneer Bank thus received advice of the credit that had been given to it by the Reserve Bank for Rs. 24,825-5-6 before the order for winding up. It is admitted on behalf of the bank that on the amount being applied to the satisfaction of the appellant's debt, there was a surplus of Rs. 3.112-14-3 which stood to the appellant's credit.

(3.) In the liquidation of the respondent bank, the appellant claimed for the payment of the whole of this; amount of Rs. 3.112-14-3 on the footing that he was entitled to be treated as the preferential creditor, Inasmuch as the security which had yielded the amount had been given for a specific purpose and, therefore, any surplus out of the proceeds of the security could not become a part of the general assets of the company, liable to distribution among the ordinary creditors. The application was resisted by the liquidator and Banerjee J. admitted the appellant only as an ordinary creditor of the Bank. Thereupon, the present appeal was preferred.