P L D 1960 Dacca 255 (PLP)

(5) Is the alleged deed of assignment legally valid and genuine and for consideration ? Did it pass any title ? (6) Had the defendant‑bank any transaction with the alleged assignee ? If that, did the consignee acquire any interest in the two Letters of Credit ?

19. Before I take up for consideration the aforesaid issues, it should be indicated here that the plaintiff‑Company claims that, by a deed of assignment executed by the firm of S. M. Hanif on the 22nd of March, 1955 (Exh 6), the assets of the said firm in Pakistan including the claim of the said firm in the said excess payments alleged to have been made in respect of the bills of exchange drawn under Letters of Credit Nos. 15/30 and 15/32 were duly assigned to the plaintiff Company for a consideration of Rs. 1,000. 20. 1n this suit a large number of documents have been exhibited in this Court, as also some oral evidence has been adduced on behalf of the parties. Three witnesses have been examined by the plaintiff of whom the first was the Deputy Chief Officer of the State Bank of Pakistan at the time he gave his evidence. He merely appeared to produce certain documents called for by the plaintiff. Although the deposition of this witness was duly read over by him and corrected, but, unfor tunately, he did not turn up ultimately to append his signature to the said deposition. However, nothing very much turns upon his evidence except for the fact that he opined that the documents produced by him relating to correspondence with regard to the dispute between the plaintiff and the defendant bank did not express the official views of the State Bank of Pakistan.

21. The plaintiff's witness No. 2 was the Deputy Chief Officer of the Banking Control Department of the State Bank of Pakistan at Dacca at the relevant time, who dealt with this matter and under whose signature the opinion of the 5th of December, 1952, was issued. He maintained that although the defendant‑bank has disputed that they agreed to be bound by the opinion of the State Bank, they did so. He further maintained that the opinion he gave was on behalf of the State Bank of Pakistan and that he had every authority to give that opinion as such officer of the Banking Control Department.

22. P. W. 3 is the plaintiff' himself. He proved the deed of assignment (Exh. 6) in favour of the plaintiff‑Company by the firm of Messrs S. M. Hanif, as also that the consideration mentioned therein was paid. He also proved certain other documents. But the main question on which he appears to have given evidence is as to the existence of the agreement to refer the dispute to the State Bank of Pakistan. According to him, he personally went to the Head Office of the defendant‑bank at Bombay and there met the Managing Director one Mr. Captain, who has since died, and there an understanding was arrived at between him and Mr. Captain that the matter would be decided upon the opinion of the State Bank of Pakistan. He, however, in cross‑examination admitted that no reference to this had been made in the plaint and there is nothing in writing to show that any such agreement was entered into with Mr. Captain.

23. On behalf of the defendant‑bank also, two witnesses were examined. The first was a junior officer of the bank. He attempted to prove certain cyclostyled copies of circulars said to have been issued by the Reserve Bank of India ; but these were only marked for identification as obviously such cyclostyled copies could not be admitted into evidence. This witness could not say anything more than that he had received such cyclostyled copies purporting to have been issued by the Reserve Bank of India. He was recalled and a second attempt was made to prove certain certified copies of the said circulars through him. The certificate, however, appeared to be of an officer of the Reserve Bank of India at Bombay and, therefore, those were also not admissible in evidence.

24. D. W. 2 was the Manager of the Narayanganj Branch of the Central Bank of India from December, 1955. Before that, he was the Accountant at the said Branch. He is the person who has verified the written statement in the present case. The main feature of his evidence is that he proved the defendant's case with regard to the dates of the establishment of the Letters of Credit and the relevant documents that were taken at that time. He proved also the authorities to draw that were executed by the firm Messrs S. M. Hanif. He proved in particular the dates of receipts of the bills of exchange at Narayanganj as mentioned in the written statement and the dates of presentation thereof to the said firm. According to him, the party was present in the bank and the memos, of presentation were handed over to him on the 15th and the 16th of September, 1949, respectively and it was he who personally presented those memos. at his office to the Plaintiff‑firm's partner. According to this witness, the party also signed on the back of the memos. but no such memo. has been filed in this case. He also proved that the final adjust ment in respect of these two bills was made on the 31st of December, 1949.

25. The oral evidence in this case is, in my opinion, not of much value except as to the question of the arbitration agree ment. So far as the other questions are concerned, there is fortunately abundant documentary evidence in this case, upon which the main questions raised in this suit will inevitably have to be decided.

26. I, therefore, now propose to take up the issues raised in this case. Issues Nos. 2, 5 and 6 are allied and really relate to the locus standi of the present plaintiff to institute this suit and to their claim to have acquired the right to realise the said alleged excess payment to the defendant‑bank. These issues were, during argument, not very seriously pressed. As I have already stated, the plaintiff' himself proved the deed of assignment, Exh. 6, dated the 22nd of March, 1955. This deed of assignment is sufficiently clear and clearly assigns the right, title and interest of the firm of Messrs S. M. Hanif in the said alleged excess payments to the present plaintiff. It appears that no notice of this assignment was given to the defendant‑bank. But it seems to me that this is a valid transfer of a cause of action or action able claim under section 130 of the Transfer of Property Act and is complete and effectual on the execution of the instrument, from which time the rights and remedies of the transferor became vested, in the transferee, whether notice of such transfer was given or not. Having read the terms of the deed of assignment, it also seems to me that it cannot be said that this is an assign ment of a mere right to sue. I, therefore, answer these issues as follows : that the plaintiff has the locus standi for maintaining the suit and that the deed of assignment, Exh. 6, validly, for a' genuine consideration, passed title in the excess honey said to have been lying in deposit with the 'defendant bank to the plaintiff Company. The defendant‑bank, of course, did not have any transaction with the assignee, the present plaintiff, but this is not a sufficient reason for disentitling the present plaintiff to maintain the suit, because, I hold that the firm of S. M. Hanif has validly assigned the right, title and interest to the Company S. M. Hanif (Dacca), Ltd., in the said two Letters of Credit and this transaction is covered by the said two Letters of Credit.

27. I next take up for consideration issues Nos. 3 and

4. As I have indicated earlier, the contention of the defendant‑bank appears to be that the contract between the defendant‑bank and the firm of Messrs S. M. Hanif is to be found solely and exclusively in the two authorities to draw executed by the said firm and, since these were executed in Pakistan and were to be performed in Pakistan, there was no manner of doubt that the "rupees" mentioned therein were Pakistani rupees and nothing else. Hence, it was futile for the plaintiff now to attempt to confuse the 'issues by raising various contentions as regards the exchange value and as regards the money in which the bills of exchange were payable. .

28. These letters of authority are Exhs..F and H. Exh. F is the letter of authority relating to Credit No. 15/30. It was executed at Narayanganj on the 22nd of August, 1949, and it authorised the defendant‑bank to establish the Letter of Credit in question. It‑is addressed to the defendant‑bank at Nara yanganj informing them that Messrs Janak Ltd. of Calcutta are authorised to draw without recourse to the extent of Rs. 5,83,000 `at sight' for invoice costs against the bill of lading and insurance certificate and invoice covering transhipment of 575 bales of cotton piece‑goods from Calcutta to Narayanganj and in this the said firm also undertook, inter alia, to hold the defendant‑batik harmless in the event of any damage to merchandise shipped or deficiency or defect therein or in the documents above described. It also purported to declare that the documents and merchandise covered thereby shall form a collateral security for the due acceptance and payment of drafts drawn thereunder, which the firm undertook to accept upon presentation. It was further stipulated that it would be at the sole option of the defendant to claim payment of any bill pursuant thereto either at the rate of exchange prevailing on the due date or at the rate prevailing at the date of payment or, in the event of any legal proceedings in respect of such bill, at the rate prevailing at the date of decree in such proceedings and the firm further bound itself to make payment of the said bill at whichever of the above rates the defendant‑bank may choose. The engagement entered into thereby was to apply to all bills drawn within the 10th of September, 1949. The other Exh. H was executed on the 7th of September, 1949, and was in similar terms except that it was in favour of Messrs National Textiles, Calcutta, for the sum of Rs. 3,60,

000. Under this authority, Letter of Credit No. 15/32 was established.

29. According to the plaintiff, however, the contract of agreement between the parties was not of such a simple or straightforward nature. In fact, there were several contracts embodied in these transactions and the rights and liabilities of the parties in respect of each of the various contracts were to be determined in different ways. It is urged on behalf of the plaintiff that, in order to determine the true nature of these transactions, one must look at all the relevant documents together, namely, the request to open the Letter of Credit, Exh. G, the letters of authority to draw, Exhs. F. & H, the credits themselves established, Exhs. 7 (1) and 7.(2), and the bills of exchange, Exh. 7 (4), Ext. L and Exh. N. as also a subsequent clarification of the terms thereof contained in Exh. I, in order to ascertain the true nature of the transactions between the parties.

30. Looking at these documents, it is contended that the transactions entered into were for the purpose of importing goods from India into Pakistan and for securing the payment for the said goods to the exporter in India. For this purpose, it was necessary, since India and Pakistan were different indepen dent countries having different monetary systems of their own, although described by the same nomenclature, to follow the procedure normally adopted in the trade for foreign transactions. Thus, letters of credit had to be opened of the type of docu mentary letters of credit, the usual documents executed to secure the banker, giving the importer this credit, namely, letters of hypothecation or authority to draw and then there was ultimately the bill of exchange.

31. The request in the present case, as contained in Exh. G, which is also Exh. 7, was clearly a request to open a letter of credit to make payment at Calcutta, on presentation of shipping documents comprising of invoices in duplicate and the bills of lading, to the exporter at Calcutta the invoice value of the goods, and it was pursuant to this request that the letters of credit, Exhs. 7 (1) and 7 (2), were opened and, as collateral security for these letters of credit, the firm Messrs S. M. Hanif executed the authorities to draw, namely, Exhs. F. and H. Although Exhs. F and H were executed at Narayanganj, the real intent of the parties was by this means to make payment at Calcutta and then to honour the bill of exchange, that would be drawn by the foreign exporter at Calcutta, in Pakistan when the bills should arrive. Now, so far as the last transaction was concerned, that would be governed by the usual law governing such a transac tion. Thus, in order to interpret as to what was the real purport of the bill of exchange, whether the rupees mentioned in Exh. 7 and Exhs. F and H were really Pakistani rupees or Indian rupees, all the facts have to be taken into consideration. If it was to be the invoice cost of the goods exported from Calcutta, then necessarily that invoice cost had to be in Indian rupees and not Pakistani rupees. It seems to me that there is a great deal of force in' this contention raised on behalf of the plaintiff. According to the general practice of the trade, letters of credit become necessary mainly for the purpose of facilitating foreign transactions. A foreign exporter or supplier of goods normally requires to be assured of receiving payment for the goods. He may or he may not know the person seeking to purchase the goods. It is, therefore, the normal practice that, in order to strengthen the credit of the purchaser, the banker usually inter venes and adds to that credit his own and, assured by the credit of the banker, the foreign exporter usually, in assurance of that credit, ships the goods and draws bills of exchange which are negotiated at that place through that banker and thus payment is made to the foreign exporter. Letters of Credit of the type utilised in the present case are normally described as documentary letters of credit. In other words, it is a conditional letter of credit conditioned by the attachment of the documents mentioned therein. A letter of credit of this type is, as such, a document or order by one banker in one place, authorising some other banker, acting as his agent or correspondent in another place, to honour the drafts or cheques of a person named in the document, upto the amount stated in the letter and charge the total amount of the drafts so honoured or payments so made to the grantor of the letter of credit. For this facility provided for the advance ment of international trade and commerce, bankers usually take certain precautions in order to secure themselves against the normal risks. The precaution usually is to take, by way of collateral security, the goods being imported and the documents relating to the goods, so that, in the event of the purchaser failing to honour the bills, the, banker can recover the amount by the sale of the goods. In the present case, the authorities to draw, which have been executed by the plaintiff, furnished such collateral security by declaring that the goods imported are pledged for the recovery of the amount, by way of collateral security, as also contained the usual conditions to keep the banker indemnified from all losses and damages.

32. On behalf of the defendant, reliance has been placed, for pointing out the true nature of the transaction involved in the letter of the credit transaction, on the case of British Impex Industries, Ltd. v. Midland Bank Ltd. (1958 A E P 264). But it does not, in my view, assist us very much in the resolving of that question. There the only question was as to whether when in such a transaction the letter of credit is a documentary letter of credit and one of the documents mentioned is a "bill of lading," what exactly is connoted by the words "bills of lading". The Court was of the view that in normal circumstances the mention of bills of lading simpliciter would mean clean bills of lading.

33. But, of course, in determining as to what exactly was meant, the intention of the parties should be gathered from the contract itself. The learned Advocate also referred to a passage in Sheldon's Practice and Law of Banking at page 186 in order to show the legal relationship between the different branches of a bank and its head office, presumably in order to support his contention that the instructions given to the Central Bank Branch at Calcutta, contained in Exhs. 7 (1) and 7 (2), with regard to clean bills of lading, formed no part of the contract between the bank and the plaintiff. In this connection I need only point out that the decision above referred to does not appear to support this contention. When the letter of authority itself and the letter of request, Exh. 7, written by the firm to the defendant bank make it clear that the bills of lading must accompany the bill of exchange, and it is only on that condition that payment would be made, then, if bills of lading are normally to be understood as meaning clean bills of lading, this contention of the plaintiff' would appear to have some justification in it. In any event, Exh. 1 tends to support this contention of the firm Messrs S. M. Hanif that the requirement of the bills of lading being clean also formed part of the contract. Otherwise, it would not have been necessary to obtain instructions from the firm and to ascertain if the bills are not clean then for what amount the bills may be accepted. This latter Exh. 1, expressly authorised the defendant‑bank to accept bills up to 95% of the invoice value if the bills were not clean.

34. Having regard to the view that I have formed in this case upon the documents, the contract in substance and in essence was a contract to enter into a foreign transaction and for effecting payment in a foreign country, namely, India. I find myself unable to accept the contention of the defendant that the rupees referred to in the authority to draw, Exhs. F and H, necessarily referred to Pakistani rupees. Clause 4 thereof clearly negatives this contention, for, if the rupees referred to therein were Pakistani rupees, the insertion of this clause was wholly redundant.

35. So far as the bills of exchange themselves are concerned, the defendant, of course, contends that even the rupees mentioned in the bills of exchange must necessarily mean Pakistani rupees, because the bills were to be ultimately paid in Pakistan and, therefore, according to the rules of International Law, the proper law of the contract was the lex loci solutionis. In a written note given to me on behalf of the defendant, this point is particularly stressed. It is pointed out that since there is no provision in our own Negotiable Instruments Act corresponding to the provisions of section 72 of the English Negotiable Instruments Act laying down special rules of interpretation governing transactions in respect of bills of exchange, the rules of International Law should apply and, in support of this contention, reliance has been placed on a number of English authorities in order to point out that the generally accepted view is that the law of the country of performance determines the rights and obligation of the parties in such cases, as also the questions of interpretation of the document. Having regard to the view that I have formed, it is unnecessary for me to refer to these cases in any great detail except to mention that the cases relied upon for this purpose were the cases of Adelaide Electric Supply Company, Limited v. Prudential Assurance Company, Limited (1934 A C 1221) ; Mayor, Councillory and Citizens of the City of Anckland and another v. Alliance Assurance Company Limited (L R 1937 A C 587). In my view, these cases have no application to the present case, for, the learned Advocate overlooked that section 134 of the Negotiable Instruments Act introduces a similar provision in the case of negotiable instru ments, as is done in the old section 72 of the English Negotiable Instruments Act. Section 134 provides that: "In the absence of a contract to the contrary, the liability of the maker or drawer of a foreign promissory note, bill of exchange or cheque is regulated in all essential matters by the law of the place where he made the instrument and the respective liabilities of the acceptor and indorser by the law of the place where the instrument is made payable". This, as is now well‑accepted, is not quite the same principle as is generally followed in respect of other documents according to the rules of International Law. These provisions are quite understandable if one remembers that even a bill of exchange does not embody a single but really a series of different contracts hanging on to the original contract. Thus, the contracts of the drawer or acceptor or indorser are distinct and separate and, in dealing with each of them, different considerations arise. But, so far as the interpretation of the instrument is concerned, I think it is now equally well‑accepted that the interpretation is to be according to the law of the place where the bill of exchange is drawn, in the present case, Calcutta. If that be the rule, then the rupees mentioned therein must necessarily mean Indian rupees ; and, once it is held that the rupees mentioned therein are Indian rupees, then the question does arise as to how the payment of those Indian rupees is to be made in Pakistan where the drawee of the bill is. The rule is that no payment in a country can be made except in the legal tender of the country. If that; is so, then a foreign exchange transaction becomes necessary and the drawee has to purchase the amount of the Indian rupees mentioned in the bill of exchange for the purpose of making that payment. When the rate is at par, no difficulty arises. But when the rate is different, it has to be calculated on the basis of the rate of exchange prevailing on the date when the bill became payable. This rule is also embodied in Dicey's book on the Conflict of Laws, Sixth Edition, Rule 164.

36. Again, assuming that there is an ambiguity as to the currency mentioned in the bills of exchange or, in other words, as to what has been called the money of account or the money of the contract, then under rule 163 enunciated by Dicey in his above‑mentioned book, the money of account must be ascertained by construing the contract in accordance with its proper law. If the proper law in the present case under section 134 of the Negotiable Instruments Act is the law of the place where the bill was drawn; then also it‑follows that rupees therein mentioned are Indian rupees and not Pakistani rupees, as contended by the defendant.

37. It has next to be determined as to what was the rate at which these bills were payable. The contention of the plaintiff, as already pointed out, appears to be that since the bills were not accepted by him until the 21st of September, 1949, the rate of exchange must be determined by the date of his acceptance. He further claims that prior to this date he was legitimately entitled not to accept the bills by reason of the fact that the bills of lading accompanying the bills were not clean bills of lading. Even assuming that he was entitled to do so, it seems to me that the plaintiff is now precluded from contending that the bills were not presented to him before devaluation of the Indian currency. In more than one letter this fact of presentation has been unequivocally admitted by the plaintiff. The one letter to which I attach great importance is the letter written on behalf of the plaintiff by the plaintiff's Solicitors in Calcutta to the defendant‑bank. This is Exh. 10 (1), dated the 12th of May, 1951. In the second paragraph of this letter, the Solicitors, Messrs Khaitan & Company, clearly say that: "Although the bill was presented to our clients on 16‑9‑49, our clients did not accept the same as the documents were not clean". In saying so, presumably, the Solicitors were under the impression that in the case of the present bills of exchange presentation for acceptance was necessary. The bills, however, as rightly pointed out by the learned Advocate for the defendant, were "at sight" and not "after sight" and again, in the letter of authority to draw, it is clearly stated that the firm S. M. Hanif undertook to accept on presentation all bills drawn pursuant thereto. Such bills did not require to be presented for acceptance under section 63 of the Negotiable Instruments Act. Under section 21 of the Negotiable Instruments Act, bill "at sight" or bill payable "at sight" or on presentment means a bill payable on demand and a bill payable `after sight' means a bill payable after presentment for sight and after acceptance, or noting for non‑acceptance. The bills in the present case, Exhs. 7 (4), L and N, clearly show that they were payable "at sight". The 'earned Advocate for the defendant, in support of this contention, relied on the decision in the case of Nand Lal v. Firm Gulam Pai Narain Das and others (A I R 1923 All. 345). That was a case of a hundi but the same principle was followed there, namely, that since the hundi was payable on demand,‑ presentation for accept ance was not necessary.

38. The next case is the case of Firm Khuda Baksh Nur Rahi v. Yasin and another (A I R 1937 Pesh. 103). That also was a case of a hundi payable "at sight" and, in such a. case too, presentation for acceptance was held not to be necessary.

39. I am in agreement with the view that in a case of al bill of exchange payable at sight no presentment for acceptance is necessary. But yet there must be presentment together with the documents, as pointed out by the Calcutta High Court in the case of Durgo Prasad Seri v. Kali Charan Aichri (A I R 1924 Cal. 1065). That was the view taken by a Division Bench of the Calcutta High Court reading sections 21 and 64 of the Negotiable Instruments Act together with Article 70 of the First Schedule to the Limitation Act. In the present case, such presentment is clearly admitted, namely, that the presentment or‑sighting was done on the 16th of September, 1949 in this view of the matter, even according to the rules laid down by Dicey in his Conflict of Laws, the date of payment is the date on which the bill was payable according to its tenor, and the rate of exchange prevailing on that date must determine the rate at which the foreign currency must be purchased in order to make the payment. The date on which the actual payment is made is, to my mind, not the E relevant date. If the date of actual payment were, as contended by the plaintiff, to determine the rate at which the money of account must be converted into the money of payment, the legal tender of the country of payment, then a recalcitrant party could easily choose the rate of payment by choosing an appro priate date for payment according to the market fluctuation.

40. In the present case, having regard to the tenor of the bills of exchange and the rules of interpretation to which I have adverted earlier. I am of the view and I hold that the bills were payable on presentation and that they were presented on the 16th of September, 1949. Since on that date the rate was at par, the devaluation having taken place subsequently, the contention of the plaintiff that he had made over‑payment cannot be accepted. These two issues are accordingly answered to the effect that the contract between the parties was to pay the amount expressed in the bills of exchange, that is to say, the invoice value of the goods exported in Indian rupees and that, in the present case, since the bills of exchange were duly sighted and/or presented and the date thereof was the 16th of September, 1949, the date on which they became payable was the said date and on the said date the rate of exchange was at par. Hence the payment had to be made at par. Therefore, no amount was paid in excess and the plaintiff is not entitled to get any refund.

41. Having regard to the view I have taken as to the rules governing the interpretation of the bills of exchange: in the present case, it is not necessary for me to refer to a large number of English authorities cited before me by both sides to point out the appropriate rule of International Law for determining the proper law of the contract.

42. Coming now to issue No. 1, namely, the question of limitation that was raised, the first part of the plaintiff's con tention is that since the money was held in a suspense account pending clarification of the exchange issue, the money was held in trust and, therefore, section 10 of the Limitation Act excluded the operation of the statute of limitation. Alternatively, it was contended that since there was an agreement to refer the dispute to the arbitration of the State Bank of Pakistan, the limitation should begin to run from the date on which the defendant‑bank refused to be bound by the opinion of the State Bank of Pakistan, namely, April or May, 1953. Further that, in any event, this was a case which was governed by Article 120 and not Article 62 of the Limitation Act.

43. On behalf of the defendant‑bank, however, it was con tended that section 10 had no application in the present cases for, section 10 only applies to what may be called "Express, Trusts". This was purely and simply a suit for money paid on account of the plaintiff and, therefore, it was covered by Article 62 of the Limitation Act. It is next contended that the alleged arbitration agreement must fail, since there was no valid agree ment in writing to refer to arbitration.‑ Since the enactment of the Arbitration Act of 1940, it is contended, a suit to enforce an arbitration agreement said to have been entered into orally cannot be maintained. In any event, assuming that there was such an arbitration agreement, the plaintiff's suit was bad because he could not then file a suit to enforce his award but must follow the procedure laid down under the Arbitration Act and file his award in Court.

44. The last contention put forward on behalf of the defendant‑bank must be accepted. The oral evidence of the plaintiff himself clearly indicates that this alleged agreement was arrived at Bombay with the Managing Director of the defendant bank orally. He also frankly admitted that he could produce no writing to show such an agreement. Indeed, from the documents on the record also, this is abundantly clear. I find that the first letter that the Deputy Chief Officer of the State Bank of Pakistan wrote to the defendant‑bank was to the effect that Messrs Hanif had lodged a complaint against the defendant‑bank (vide Exh. XI). If it was only a complaint, then it was a unilateral affair and it was not an agreement in any sense of the term at all. In any event, the contention is also sound that, since the enactment of the Arbitration Act of 1940, such oral arbitration agreements cannot be enforced.‑ No separate suit lies for this purpose. This view is supported by two decisions of the Madra', High Court in the cases of Rashid Jamshed Sons & Co. v. Moolchand Jothajee (A I R 1945 Mad. 371) and Moolchand Jothajee v. Rashid Jamshed Sons & Co. (A I R 1946 Mad. 346).

45. I may also state here that if section 10 of the Limitation Act does trot save the suit, the suit would be one which would come under Article 62 of the Limitation Act and would thus be a suit for money had and received. The residuary Article 120 would not apply in the present case.

46. As to whether section 10 applies or not, a large number of decisions have been relied upon by both sides. As I have already disposed of the suit on its merits, I do not propose to enter into a detailed, discussion of this question of limitation except to indicate that, in my view, the money, it appears from Exh. 7 (5), was held in a suspense account pending clarification of the exchange issue. Read with Exh. 8, where the plaintiff clearly specified that they were paying the full amount in Pakistani currency under protest and they would claim any refund allowance under the new Exchange position, this would be sufficient, in my view, to constitute a trust for a specific purpose within the meaning of section 10 of the Limitation Act. The term "Express Trust" has, .of course, not been defined anywhere, but the general consensus of opinion seems to me that the words "a trust for a specific purpose" is borrowed from the English Law and really means what "Express Trust" means in English Law. With regard to "Express Trusts", I would like to quote the words of F. W. Maitland from his book on Equity, 1936‑Edn. page 74, where he points out that although other text‑writers divide trusts thus created into express and implied. "It is difficult to draw the line, for, since no formal words are necessary for the creation of a trust and since whenever the trust is created by the act of a party there almost of necessity will be some words used‑even if a deaf‑mute created a trust by `talking on his fingers', there would be words used the distinction comes to be one between clear and less clear words and clearness is a matter of degree" and concludes at the same page that "very often it will be found that the term "Express Trust" is given to all trusts created by act of party."

47. Considering even the decisions that have been relied upon by the respective parties; it is abundantly clear that no precise description of an express trust can be deduced from there. I propose to refer only to two to show the wide divergence of opinion on this point. In the case of Kishtappa Chetty v. Lakshmi Ammal (A I R 1923 Mad. 578), a Division Bench of the Madras High Court took the view that the phrase "trust for a specific purpose" in section 10 is "merely a more expanded mode of expressing the same idea conveyed by "express trust" in English Law; and it is used in this section in contradistinction to "trusts arising by implication of law, trusts resulting and trusts constructive". Further that the word "vested" in section 10 means "nothing more than properly having control of the property". The decisions of the Calcutta High Court are somewhat to the same effect. Thus in the case of Bibhutibhushan Datta v. Anadinath Datta (I L R 61 Cal. 119), relying upon the decision in the case of Khaw Sim Tek v. Chuah Hooi Gnoh Nech (49 I A 37), it was pointed out that a specific purpose within the meaning of section 10 is a purpose which is either actually and specifically defined in the terms of the will or the settlement itself, or a purpose which, from the specified terms, can be certainly affirmed. So far as the other extreme view is concerned, it has been canvassed by the learned Advocate for the defendant‑bank that, by the use of the words "become vested in trust for any specific purpose" in section 10, it is necessary that there must be a transfer of a legal ownership in the trustee for a definite purpose defined by the creator of the trust. The Division Bench of the Calcutta High Court in the case above referred to observed that. "While transfer of proprietary rights is not intended, mere transference of management or control is not enough to satisfy the requirements of `vesting' as contemplated by section 10 ; a right to call for a transfer and to possess the property for the purposes of the trust and also a power to dispose of it according to the terms of the trust without reference to the owner are the essentials that constitute the `vesting'. " The view, therefore, that vesting connotes legal ownership was not accepted in that case. The definition given to `vesting' in the said case would fit in with the facts of the present case also, because here too if it was agreed that the amount would be held in a suspense account pending clarification of the exchange issue, the parties thereby agreed that the money would be held for the benefit of the person or party or parties entitled to it upon the clarification of the exchange issue. That was a sufficient vesting for a sufficiently specified purpose.

48. In the subsequent case of Mohamed Habeeb Alum v. Anjuman Ara Begum (I L R 62 Cal. 393), the Calcutta High Court went even further and Panckridge, J., opined that a trust for a specific purpose is not confined to such cases where the purpose is specified in the instrument itself but that even if it is possible from the evidence before the Court to say with reasonable certainty that the money was held for a specific purpose, that would be a trust for a specific purpose. A similar view has also been taken in Bombay in the case of Naroandas Ramji and another v. Narrondas Ramji and others (I L R 1931 Born. 418). In England also, in the case of Seagram v. Tuck (18 Ch. D 296), a Receiver has been held to be a trustee for the persons entitled thereto, in respect of money realised by him, although his final accounts have been passed and recogniz ances vacated. Calcutta High Court in the case of Osmond Deeby v. Kshitish Chandra Achnrjya Chowdhury (I L R 41 Cal. 771) also took the same view. However, it is unnecessary to multiply the decisions on this point. In my view, section 10 would, in these circumstances, be attracted ‑in the present case and the suit would not be barred by limitation. The position with regard to bills of exchange, it appears, was never clarified or settled by the State Bank of Pakistan, for, in Exh. V, dated, 11‑10‑49 it clearly stated that it had decided to refrain from expressing any view in the matter.

49. However, since I have come to the view that the date on which the bills were payable would determine the rate of exchange for the conversion of the amounts of the bills into Pakistani currency and that the rate on the said date, namely, the 16th of September, 1949, was at par, this suit fails and is dismissed with costs. The sums deposited in this Court by the plaintiff as security for costs will now be paid to the defendant bank in adjustment of the costs due to it. K.B.A Suit dismissed.