Banker's lien and set-off require strict mutuality; an assignee may enforce a deposit claim when notice is proved.

An assignee of a depositor's claim may enforce a call deposit in its own name when the assignment is proved and the bank has notice of the demand. A bank cannot invoke banker's lien or set-off against that deposit unless there is mutuality of obligation and identity of parties in the same capacity; a deposit in one partnership account cannot be adjusted against dues of a different partnership lacking reciprocity. Limitation runs from the date the demand becomes enforceable against the bank, not from earlier release of security, so the suit was treated as within time under Article 60 of the Limitation Act.

---

---

Issues: (i) Whether the plaintiffs, as assignees of the depositor's claim, were entitled to recover the call deposit amount from the bank; (ii) whether the bank could exercise a banker's lien or right of set-off against the call deposit by adjusting it towards dues of a different partnership account; (iii) whether the suit was barred by limitation.

Issue (i): Whether the plaintiffs, as assignees of the depositor's claim, were entitled to recover the call deposit amount from the bank;

Analysis: The letters proved an assignment of the depositor's claim in favour of the plaintiffs, and the bank had notice of the demand. Once the assignor's right to receive the deposit was transferred, the assignee was competent to enforce the claim in its own name, provided the bank had no lawful right to retain the money against another demand.

Conclusion: Decided in favour of the plaintiffs.

Issue (ii): Whether the bank could exercise a banker's lien or right of set-off against the call deposit by adjusting it towards dues of a different partnership account;

Analysis: The right of a banker to retain or apply monies depends on mutuality of obligation and identity of parties in the same capacity. A deposit standing to the credit of one person or one partnership cannot be set off against the debt of a different account lacking mutuality. Section 170 of the Indian Contract Act was confined to goods bailed and did not govern such a cash deposit. On the facts, the two partnership constitutions were different, so the necessary reciprocity for set-off was absent.

Conclusion: Decided against the bank; no lien or set-off was available.

Issue (iii): Whether the suit was barred by limitation;

Analysis: The limitation period ran from the date when demand for payment became enforceable against the bank, not merely from the earlier release of the security by the Government. The demand made in 1948 brought the suit within the statutory period under Article 60 of the Limitation Act.

Conclusion: Decided in favour of the plaintiffs; the suit was within limitation.

Final Conclusion: The bank failed to establish a valid right of set-off against the deposit, and the plaintiffs were entitled to recover the amount decreed by the court below.

Ratio Decidendi: A bank can appropriate a deposit only where there is mutuality of obligation between the same parties in the same capacity; in the absence of such mutuality, a banker's lien or set-off cannot defeat an assignee's enforceable claim to the deposit.

---