IN RE: TRAVANCORE NATIONAL AND QUILON BANK LTD S BARKATALLY; K ANANTARAMAN Vs. JAMES VOCE PIRRIE AND CYRIL GILL (OFFICIAL LIQUIDATOR)

JUDGEMENT

(1.) The applicant is a debtor of the company in liquidation. On 17 February 1938, he borrowed from this banking company a sum of Rs. 1000, and as security for his loan he deposited 450 shares of two other companies. On 30 May 1938, repayment of this loan was demanded by the company. The applicant wrote a letter to the agent of the company on 4 June 1938. This letter is not available, but the contents are set out in the applicant's affidavit in support of his application in para. 4, and it is not controverted that his recollection in regard to the contents is accurate. The letter was to the effect that the applicant was the holder in due course of a fixed deposit receipt with the Bank for a sum of Rs. 1000 standing in the name of Sri Bageerathi Ammal maturing on 28 July 1939, and he requested an adjustment of this debt from the company against the amount due from the applicant. An interview took place on the day of, or shortly after, the letter I mentioned, between the applicant and the agent. The substance of this interview is set out in para. 3 of the counter-affidavit and is not challenged by the applicant in his reply. At this interview, the applicant informed the agent that the depositor of Rs. 1000, the subject of the fixed deposit receipt, had attempted to obtain payment from the company for the amount covered by the receipt but was unsuccessful, and the applicant requested that he should be allowed to set off against his debt to the company the debt which was maturing in favour of the depositor. The recollections of the applicant and the agent are now at issue in regard to what subsequently transpired. The applicant says in his affidavit that the agent promised to allow a set off; on the other hand, the Official Liquidator in his affidavit says that he was informed by the agent that he promised, on being given the fixed deposit receipt signed by the depositor, to place the matter before the management and ascertain their views. Whatever may have been said, in my view, it is quite clear from the letter of the applicant dated 18 June 1938 what was the position he accepted. Two days previously, he had been told by the company that an adjustment could not be allowed against his debt before the date of maturity of the fixed deposit receipt but that this was being held as collateral security for the loan. The applicant's reply in his letter of 18 June 1938 was that ho had paid the depositor the purchase consideration and he requested that the fixed deposit should be transferred to his name if it were not possible for the company to reconsider his original request to be allowed to set off. He also asked for return of the share certificates deposited as security. It is quite clear that, whatever may have been stated, he accepted the position that on that day there was no set off and the debt due from him was still outstanding to the company.

(2.) It is urged on behalf of the applicant) that no matter what may have transpired in June 1938, he is now entitled to set off against moneys due from him the moneys which ordinarily would have become due on the maturity of the fixed deposit receipt. In the light of the admissions and concessions which Mr. Krishnaswami Ayyar has made on behalf of the Official Liquidators, it is not necessary for me to go into the question of the right to set off. It is conceded that a debt, although not presently payable, can be set off against moneys owing to a company in liquidation. The application of the applicant was opposed on these grounds : (1) that there was no valid assignment; and (2) if there was, to allow a set off would amount to a fraudulent preference. It is now conceded that if the assignment in favour of the applicant is binding and established, then the applicant is entitled to set off. What is disputed is whether there was a valid assignment in law.

(3.) There was a loan made to the applicant which he was requested to repay. Atabout the date when repayment was demanded, the depositor of the Rs. 1000 endeavoured to obtain repayment of the money, the subject of the receipt from the bank. It was then that the applicant commenced his negotiations to set off against his debt the moneys deposited with the company by the depositor. The only documents supporting an assignment are, (a) the deposit receipt which on the back bears the signature of the depositor which signature is merely one evidencing discharge of the moneys due from the bank; (b) a letter dated 16th June 1938 signed by the depositor and addressed to the company in which it is stated that the depositor had assigned her rights in the fixed deposit receipt to the applicant and authorized the company to apply the amount towards the applicant's loan account. In the affidavit supporting this application the applicant contents himself with saying that he was the holder of this fixed deposit receipt in due course. In the counter affidavit, in para. 10, it is stated that the Official Liquidators do not admit and put the applicant to strict proof that he is a bona fide assignee for value of the amount covered by the fixed deposit. In his reply the applicant merely says that he is a bona fide assignee for value. Seeing that it is contested that he is a bona fide assignee of this deposit receipt, one would have thought in his reply he would have set out the consideration which he paid. There is not a word about that. Learned Counsel on behalf of the applicant has referred me to Section 130, Sub-section (1), T.P. Act 1882, which provides that a transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorized agent.