P L D 1970 Dacca 211 (PLP)

I also put it to you that somehow or other you prevailed upon the Bank staffs to deliver your cash warrant without making payment. No." Exhibit 3 is a cash warrant for a sum of Rs. 2,

200. This it appears was paid for by debiting the amount from the petitioners account but it is inexplicable how cash warrant for such a huge sum as Exh. 4 was paid for in cash. In this respect the evidence of Opposite‑Party No. 3 R. N. Ghosh seems to be more acceptable. He has given the circumstances very explicitly. He has stated that the partnership was in urgent need of money to pay tile workers before the Eid but they could not obtain the payment for the work done by them unless the formal contract was drawn up. For this they were required to deposit a security of the said sum in the shape of cash warrant. Tile circumstances relating to the issue of the said cash warrant is deposed by him as follows "On the 18th when I went to the Bank Mr. K. F. Rahman was with me. The Manager of the Bank gave instruction to his peon that he was to remain present in the Lank on the next day at about 9 a.m. He was due to leave for Culcutta on the Eid holidays on the 23rd and he was to take some papers to the head office from the Bank. From that I came to know that he would be present on Sunday in the Bank. Did you go to the Bank on Sunday. Yes. Myself and Mr. Rahman went. How did you get the cash warrant. That was after 9 at about 9 or 9‑15 we reached the Bank. We made him to understand that if we do not get the call deposit we cannot submit the formal tender for carriage of cement from the resource godown to Rajshahi Building Division. If we do pot deposit this formal tender no payment was expected before Eid. And our position would be ridiculous if we do get the payment and if we do not get the payment we cannot pay board hire and truck hire before the Eid. I made him understand in 2 methods. One was that' we jointly make the payment by 30th of April and the other method is if no payment is received before that day the payment would be made against the fixed deposit of my wife on that day. On that assurance this cash warrant was handed over to you. Yes." He has stood the test of cross‑examination very well and I accept this evidence of D. W.

4. The Bank's officers and records also confirm this evidence. D. W. 3 states "On 17th April 1964, did you attend office. Yes, I did. Was any cash warrant of the value of Rs. 11,400 purchased by Khandaker Faizur Rahman. On that day no cash warrant of such amount was issued from the bank. Had there been any cash warrant sold on that date of the value of Rs. 11,

400. If it would have been issued there would have been mentioned in the bank's book (with objection). Rough cash book was maintained by me. This is cash analysis of the Southern Bank Ltd. This is the cash analysis book used to be maintained by the Accounts department. What are items that are maintained in cash analysis book. Total sums of different heads used to be maintained in this book. Is there any entry in that book on 17th April 1964, regarding this amount of Rs. 11,

400. No. Was any draft cash book maintained by you. Yes. Is that rough cash book. Yes. This book was maintained by me. Is there any entry on' 17th April 1964, regarding this amount of Rs. 11,

400. No. Sir, there is no entry in respect of Rs. 11,400. (Exh. K and Exh. L)." Exhibit EE is the corresponding counterfoil of the cash warrant kept by the Bank. There is a clear note in the said counterfoil to the effect `entry not passed today', Exh. EE(2). The petitioner and his partner took out a number of cash warrant for their business. The Bank has honoured every one of them. I fail to understand why the Bank should not have honoured this cash warrant if the amount had been deposited with them. The clear evidence of Amal Bhadra D. W. 3 and of Opposite‑Party No.

3. D. W. 4 supported by the bank's records clearly indicate that the amount was not deposited but the cash warrant was issued by the then Manager of the bank on the assurance that the amount would be paid by 30th April 1961, as a favour to its trusted clients. I therefore determine this point against the petitioner. Next I take up point No. 3 namely whether the transfer of the sum of Rs. 70,680 from the petitioner's account to R. N. Ghosh's account was valid. In this connection it has been strenuously argued by Mr. Choudhury that the transfer was made hurriedly without any instruction from the petitioner. He has argued that the Bank officials were acting in collusion with R. N. Ghosh, opposite‑party No.

3. The Bank officials already were aware that the Bank would go into liquidation shortly. R. N. Ghosh also was aware of that and this hurried transfer was made to enable R. N. Ghosh to make up his deficit account and to purchase in the name of his wife a fixed deposit of Rs. 40,000.00 so that even if the Bank went into liquidation, R. N. Ghosh would profit at least to some extent. He has further argued that the Bank has not been able to show any legal authority for the transfer and in the absence of such legal authority the transfer was void. The evidence of the petitioner with regard to these two cheques is that after the deposit of the same the Bank went into liquidation and he went to see the Manager Dhiraj Lal Chaterjee Opposite‑Party No. 2 and he had told him that the cheques had been forwarded to the State Bank of Pakistan for clearance and that as the Bank had gone into liquidation the matter will be dealt with by the State Bank. After that he went away from Khulna for construction work in Faridpur but he us‑‑ud to male inquiry from the Southern Bank about his two cheques anal the former Manager of the Bank used to tell hire that the list was not vet prepared. In December 1964, he received a letter from a the State Bank of Pakistan stating that Rs. 101.50 paisa was balance in his account and he was asked to receive the same in settlement to his claim. He alleges that he went on inquiry why the balance was only Rs. 101.50 paisa and he was told as the State had suspended the operation of the Bank's account as his cheques were not cleared and that he would be informed later. According to this evidence certain factors remain unexplained. From the records it is clear that the cheques were presented on 20th and 21st April. There is clear evidence on behalf of the Bank that such cheques are cleared within 24 hours if presented early and it cannot be presumed that the petitioner was not aware of this fact. Therefore when the Bank's operation was suspended on 28‑4‑64 there was a clear interval of seven days by which time the cheques would be cleared and credited to the account of the petitioner. From the records it appears that the Bank cleared the cheque presented on 20th April 1964, and purchased the cheque presented on 21‑4‑

64. That is to say that on 21‑4‑64 the Bank credited the petitioner's amount for the whole sum of the two cheques although the second cheque was not yet cleared. On 21‑4‑64 it appears that the amount was transferred to the account of R. N. Ghosh by transfer voucher Exh. U. Each. U shows that Rs. 70,680 was credited to the account of R. N. Ghosh by debit ing the account of K. F. Rahman, as per advice. The voucher was signed only by R. N. Ghosh. From this Exhibit and the fact that the second cheque had not yet been encashed, Mr. Choudhury would like the Court to conclude that this was an unauthorised transfer made on behalf of R. N. Ghosh by the Bank authorities. I will take up the defence of the Bank in this respect later. But for the moment I cannot understand how the petitioner could remain quiet at least after December 1964, without agitating the question how the cheques remained not cleared even on the date of the suspension of the Bank's work on 28‑4‑

64. This appears to me to be an unbelievable statement and can be explained only by the fact that the transfer was made with the knowledge of the petitioner, if not direct advice. That the petitioner accepted the transfer as a valid transfer will appear from Exh. G, an agreement breaking up the partnership, executed by both the petitioner and R. N. Ghosh on 10‑3‑65 wherein it is clearly stated that the first party that is petitioner and the second party that is R. N. Ghosh mutually settled up their accounts up to 10th March 1965. So as between the petitioner and the Opposite‑Party R. N. Ghosh this amount was taken into consideration on 10th of March 1965. Therefore the transfer in favour of R. N. Ghosh was accepted by the petitioner. The petitioner has clearly admitted as correct the relevant contents of Exh. G. Now let me see what the Bank has to say in this matter. The Bank's case is that the transfers were made from the accounts of K. F. Rahman to that of R. N. Ghosh and vice versa on the advice of either of them and often only one would sign the transfer voucher at the time of transfer and the other would sign at sometime later. As evidence of this practice the Bank had but in several transfer vouchers. Exh. A is a transfer voucher dated 20‑2‑64 in which the amount of Rs. 1,500 is debited from the account of R. N. Ghosh and credited to that of K. F. Rahman. It is signed only by R. N. Ghosh. Exh. C is transfer voucher dated 9‑3‑64 in which a sum of Rs. 45,541 is being debited from the account of the petitioner K. F. Rahman and credited to that of R. N. Ghosh. The voucher shows the signature of R. N. Ghosh dated 9‑3‑

64. The petitioner has signed the same on 28‑3‑

64. This Exhibit clearly shows that the bank accepted the instruction of either party and transferred the amount as directed when the other party would confirm the transfer later. Exh. E is a transfer voucher dated 2‑3‑64 in which a sum of Rs. 6,000 is being transferred to the account of R. N. Ghosh from the account of the petitioner. But it shows only the signature of R. N. Ghosh and the petitioner never signed the said voucher but nevertheless he has not complained regarding the said transfer. Thus it is clear that the Bank accepted the instruction of either partner with regard to the transfer from one account to the other. It is the evidence of the banking officer that in certain cases when a large amount was concerned, confirmation of the transfer was obtained from the partner whose account had been debited for the sake of the safty of the Bank. From all these facts and circumstances it appears that the transfer in question was a valid transfer as per arrange ment between the two partners and the bank. The question now arises whether the transfer was legal so far as the bank is concerned. In this connection Mr. Chowdhury had argued that Bank had no authority to transfer the amount without written instruction from the depositor that is the petitioner and has relied on the evidence of D. W. 1 Mr. M.

1. Siddique to the following effect "Transfer voucher is never signed by the transferee. It is the practice of the Bank that by the depositor, that is debtors and creditors asked to sign on the back of the vouchers on letter of authority from the person whose account is debited. But the signature of the transferor is a must. Yes." The transfer in question as represented by Exh. U not showing the signature of the petitioner was according to Mr. Chowdhury illegal. In this connection the evidence of D. W. 2 Mr. M. A. Rab another banking officer was to this effect "The Manager could accidentally be caught hold by me at Khulna when I enquired of the transactions, he said that the payments were made by him according to the practice prevail ing with these two account holders. These two transactions were irregular. This I cannot say, because I was not in the Bank at that time. Whether it was regular or irregular as what was the dealing with these two accounts and the Manager who passed for payment. Transfers are effected by way of transfer voucher or letter of authority. Well, this depends upon the practice of the Bank. If the Banker is satisfied with the dealing with the customers on whose account and from whose account he is transferring, he can at times do by obtaining the signatures on vouchers, general order or whatever they may arrange with the customers. By signature or by general order in writing. Or any other mode arranged with the bankers." These two banking officers took charge of the bank after the impugned transfer. D. W. 3 Amal Kumar Bhadra was all along in the bank and his evidence is to the following effect "What was the practice followed by the Bank so far as this 2 parties are concerned regarding their mutual dealing of their accounts. Have you got any idea. Yes. I have got some idea. Amounts used to be transferred between the accounts of R. N. Ghosh and K. F. Rahman in that away. If one is to be present at the time when the amount is to be deposited then the other partner will come later and confirm it." Mr. Bhadra has given the evidence as to the arrangement between these two partners with regard to their respective accounts. Mr. M. A. Rab D. W. 2 has clearly testified that it is for the banker to be satisfied with the dealing of the customers on whose accounts the transfers are made and could be done by obtaining the signature on vouchers, order or whatever they may arrange with the customer. From this evidence it is clear that the arrangement between these two accounts was such that transfers could be made at the instance of one account holder without waiting for confir mation by the account holder from whose account the transfer was made. As already pointed out Exh. E shows a transfer from the petitioner's account to that of the Opposite‑Party No. 3 which was made only on the instruction of Opposite‑Party No. 3 but no complaint is made by the petitioner with regard to the sum so transferred. Similarly Exh. D shows that the transfer was made at the instance of the Opposite‑Party No. 3 on 9‑3‑64 and the petitioner confirmed it on 28‑3‑

64. Therefore this was the arrangement between the bank on the one hand and the two account holders on the other. Therefore it follows that the bank was acting legally in making the transfer in question. So in my opinion the transfer represented by Exh. U was also a legal transfer so far as the bank is concerned. The next point is whether the transfer if valid created any liability on respondent No. 3 and whether respondent No. 3 was liable to re‑imburse the said amount. Mr. Islam has raised serious objection to consideration of this question in the petition filed under section 235 read with section 07 of the Banking Companies Ordinance. Strictly speaking this question falls outside the scope of an inquiry under section 235 of the Companies Act, 1913. Section 235 of the Companies Act reads as follows : 235.‑(I) Where, in the course of winding up a company, it appears that any person who has taken part in the formation or promotion of the company, or any past or present director, manager or liquidator, or any officer of the company has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the Court may on the application of the liquidator, or of any creditor or contributory made within three years from the date of the first appointment of a liquidator in the winding up or of the misapplication, retainer, misfeasance or breach of trust, as the case may be, whichever is longer, examine into the conduct of the promoter, director, manager liquidator or officer, and compel him to repay or restore the money or property or any part thereof respectively with interest at such rate as the Court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplica tion, retainer, misfeasance or breach of trust as the Court thinks just. (2) This section shall apply notwithstanding that the offence is one for which the offender may be criminally responsible." The section is made applicable to any person who has taken par in the formation or promotion of the company, or any past and present Directors, Manager or liquidator or any officer of the'' company. Mr. R. N. Ghosh does not fall into any of the above categories. But if the second portion of the section is closely examined then Mr. R. N. Ghosh may be made liable. After examining into the conduct of the promoter, Director and t Manager, liquidator or officer the Court can compel him to restore the money or property or any part thereof. Now it is the admitted case of the bank that with the transferred amount Mr. R. N. Ghosh purchased fixed deposit of Rs. 40,000 from the same bank. Therefore the amount of the petitioner was still with the bank on the date of the liquidation and in the name of R. N. Ghosh's wife. Section 67 of the Banking Companies Ordinance reads as follows "

67. Special provisions for assessing damages against delinquent directors, etc.‑(1) Where an application is made to the High Court under section 235 of the Companies Act, 1913 (VII of 1913), against any promotor, director, manager, liquidator or officer of a banking company for repayment or restoration of any money or property and the applicant makes out a prima facie case against such person, the High Court shall make an order against such person to repay and restore the money or property unless he proves that he is not liable to make the repayment or restoration either wholly or in part Provided that where such an order is made jointly against two or more such persons, they shall be jointly and severally liable to make the repayment or restoration of the money or property. (2) Where an application is made to the High Court under section 235 of the Companies Act, 1913 (VII of 1913), and the High Court has reason to believe that a property belongs to any promotor, director, manager, liquidator or officer of the banking company, whether the property stands in the name of such person or of any other person as the ostensible owner, the High Court may, at any time, whether before or after making an order under subsection (1), direct the attachment of such property or of such portion thereof as the High Court may think fit and when the property so attached stands in the name of ostensible owner, it shall remain subject to attachment unless the ostensible owner can prove to the satisfaction of the High Court that he is the real owner and the provisions of the Code of Civil Procedure, 1908 (Act V of 1908), relating to attachment of property shall, as far as may be, apply to such attachment." This section also shows that the application must be directed against any promoter, director, manager, liquidator or officer of a Banking Company. But subsection (2) shows that where any application has been made under section 235 of the Companies Act the High Court has power to follow the property whether ill stands in the name of the above‑mentioned persons or of any other person as the ostensible owner. Therefore this application) is clearly maintainable also against R. N. Ghosli as it is alleged that he purchased fixed deposits with the transferred sum in the name of his wife. Further it appears from section 61 of the Banking Companies Ordinance that all matters in which a Bank in liquidation is involved must be decided by this Court. The liability of Mr. R. N. Ghosh to repay the amount of the transfer cannot be decided without making the Bank a party. As such this question is also to be decided by this Court. Therefore I hold that this point can be and shall be decided by this Court in this application. So far as the liability of Mr. R. N. Ghosh is concerned Exh. G is a complete answer. 1t shows that the partnership business continued till the date of the execution of the said deed of agreement namely Exh. G that is 10th of March 1965. All receipts and payments as between the partners were accounted for up to that date. The outstanding payments due to partnership firm is clearly arranged for in the said agreement. Therefore it is absolutely clear that all sums received on account of the business between the two partners up to 10th March 1965, had been accounted for. In this view of the matter the said sum of Rs. 70,680 must be taken to have been accounted for. That the relationship between the two partners continued even after the liquidation of the bank is further corroborated by the evidence of P. W. 1 himself who clearly admits the agreement Exh. G (excepting the date as regards the commencement of the partnership with which we are not concerned) but also admits he took overdraft of Rs. 1,10,000 from the Commerce Bank Limited against two fixed deposits certificates, one belonging to him and another to Mr. Ghosh each for the value of Rs. 45,

000. He further admits that he pledged the fixed deposit of Mrs. Keya Rani Gliosh in the Southern Bank with the Commerce Bank Limited in June and Julv 1964. I am therefore convinced that the good relationship between the partners continued till March 1965, when all these sums due from each other was accounted for and a valid agreement was arrived at. In this view of the matter there is no doubt that Mr. R. N. Ghosh has no liability so far as the sum of Rs. 70,680 is concerned. It is clear that this application is an attempt by the petitioner to make some illegal gain taking advantage of some apparent irregularity and the accommodation given by the Bank. The apparent irregularity proceeded from the accommodation given to the petitioner by the Bank. As regards the charge of collusion of R. N. Ghosh with the Bank Official to the effect that the hurried transfer was made with the knowledge of the forthcoming liquidation I hold that there is no substance. The accounts clearly show that R. N. Ghosh had with the Bank on the date of Liquidation an outstanding sum of Rs. 60,

000. In the current account he had favourable balance of Rs. 10,000 and odd and in the fixed deposit account in the name of his wife Mrs. Keya Rani Ghosh he had Rs. 70,000 from which he had taken a loan of Rs. 20,

000. If R. N. Ghosh was aware of the coming liquidation, as a prudent man he would not have left this huge sum in the Bonk. In view of the above findings it is not necessary for me to enter into the question of the maintainability of the petition but us arguments were advanced on both sides I would just refer to the same and give my conclusion on this point also. So far as tile charge against the Banking Officer is concerned the applica tion is maintainable both under section 235 of Companies Act and also under section 67 of the Banking Companies Ordinance. All matters relating to a Banking Company in liquidation require to be decided by this Court under section 61 of the Banking Companies Ordinance. As such the petitioner had no other forum and I therefore hold that the petition was maintainable. In conclusion I hold that no consideration was paid for the Cash warrant amounting to a sum of Rs. 11,400 Exh

4. As such the Bank is not liable to pay the sum. I further hold that the transfer made by Exh. U was a valid transfer and the Bank is not liable in any way for the amount of Rs. 70,

680. Lastly I hold that the said sum of Rs. 70,680 had been accounted for as between the petitioner and Opposite‑Party no. 3 and as such Mr. R. N. Ghosh is also not liable for the said amount. The petitioner is therefore dismissed with costs. Certified for one counsel for each of the contesting opposite‑parties. A. M/S. A. H. Petition dismissed.