Assignment of fixed deposit receipts protects the assignee; lien and set-off cannot defeat rights after notice.

An assignment of a fixed deposit receipt is effective when the depositor clearly expresses an intention to transfer the receipt and the money covered by it, even without any special form. Where the bank and company are informed of the assignment, the assignee's title to the deposit is protected. After valid assignment and notice, the debtor cannot defeat the assignee's rights by asserting a banker's lien, set-off, or a pre-existing equity. The assignee bank, having taken the deposit in the ordinary course of banking business, is not required to make further inquiry once the assignment has been made and intimated.

---

---

Issues: (i) Whether the fixed deposit receipt and the money represented by it were validly assigned to the bank by the depositor, and whether notice of such assignment was given to the company; (ii) whether the company could still adjust the deposit against its own claim by invoking a banker's lien or right of set-off.

Issue (i): Whether the fixed deposit receipt and the money represented by it were validly assigned to the bank by the depositor, and whether notice of such assignment was given to the company.

Analysis: A transfer of a fixed deposit receipt need not be in any particular form if the intention to transfer the receipt and the money covered by it is clear. The depositor's letter expressly authorised the bank to take the amount on maturity and credit it to the overdraft account, which manifested an assignment within the meaning of the law relating to transfer of property. The evidence also showed that the company had been informed of the assignment shortly after it was made.

Conclusion: The assignment was valid, and the company had notice of it.

Issue (ii): Whether the company could still adjust the deposit against its own claim by invoking a banker's lien or right of set-off.

Analysis: A banker's lien or right of set-off cannot be exercised after the fund has been validly assigned, or after the banker has notice of the assignment. The company's silence after notice, coupled with its conduct in not asserting any claim against the assignee at the relevant time, also attracted estoppel. The assignee bank took the deposit in the ordinary course of banking business and was not bound to make further inquiry once the assignment had been made and intimated.

Conclusion: The company's plea of lien or set-off failed, and the assignee bank was entitled to the deposit amount.

Final Conclusion: The liquidators were entitled to recover the amount due on the fixed deposit with interest and costs, and the company's adjustment of the deposit could not defeat the assignee's rights.

Ratio Decidendi: An assignment of a fixed deposit becomes effective when the intention to transfer is clearly expressed and communicated, and after notice of such assignment the debtor cannot lawfully defeat the assignee's title by invoking lien, set-off, or a pre-existing equity.

---