PUSHPA WATI Vs. ORIENTAL BANK OF COMMERCE

JUDGEMENT

(1.) WHETHER or not the Bank with which the Fixed Deposit Receipts are kept as security for any overdraft made by the purchaser, is empowered to make the payment to a third party without any authority from the purchaser in order to discharge his debt liability of a third party ? is the only question of law that arises for determination in the present appeal.

(2.) SMT . Pushpa Wati plaintiff along with her husband Chaman Lal (now deceased) purchased two Fixed Deposit Receipts by depositing Rs. 25,848.27 in the Oriental Bank of Commerce, Branch Office at Batala (for short 'the Bank), which were to mature on 26.6.1979. On the date of maturity the amount was to swell to Rs. 33,060.63. Smt. Pushpa Wati and her husband Chaman Lal were also partners of the firm M/s. Khullar Trading Company, G.T. Road, Batala (for short 'the firm'). The firm was having cash credit facility from the Bank. They deposited the said D.D.Rs. with the Bank as security for any amount which may be advanced to the firm by the Bank. The plaintiffs adjusted the cash credit account with the Bank by making payments from some other source, and, as such they did not owe anything to the Bank with regard to the cash credit account. In the meantime, a demand was raised by the Excise and Taxation Officer, Excise and Taxation Department, Batala, on the pretext of discharging the liability of Chaman Lal plaintiff (now deceased) towards the Department as he had stood as a guarantor on behalf of some other persons. Thus, a payment of Rs. 55,000/- was made to the Excise and Taxation Department by way of Banker's Cheque. The said amount also included the amount of F.D.Rs. in question and certain other amounts. When on maturity of the F.D.Rs. the plaintiffs raised a demand from the Bank to make the payment of the F.D.Rs. to them, the Bank refused to make the payment as the said amount had already been paid to the Excise and Taxation Department. Smt. Pushpa Wati and her husband Chaman Lal filed a suit for recovery of Rs. 33,060.63 against the Bank. The Bank contested the suit. On the pleadings of the parties, the Sub-Judge Ist Class, Batala, inter alia, framed the following issue :-

(3.) I have heard the learned counsel for the parties and gone through the evidence adduced on record.