TaxTMI 
TaxTMI 
TaxTMI 
1939 (11) TMI 15
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and style of the S.N. Firm which suspended business on 30th April, 1935. Between 25th March, 1935 and 17th April, 1935, the plaintiff-respondent had paid this firm a total sum of ₹ 6,950 at Trichinopoly in the following circumstances. The plaintiff had arranged to purchase certain lands in the village of Thiruvarambur from one S.V. Nallasivam Pillai of Tuticorin. When the plaintiff told the third defendant of this plan the latter suggested that the transaction could be arranged through the defendant's branch at Tuticorin which he said was close to Nallaperumal Pillai's shop of that place. The plaintiff's case was that the payment referred to above was made by him under an arrangement that the firm of defendants 1 to 7 sho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uite correctly too, that had the plaintiff adopted the second course and had he taken a draft on the defendants' branch at Tuticorin the position taken up by the plaintiff at the trial might have been untenable. It might then have been assumed that the transaction was an ordinary banking transaction between plaintiff and the firm which would have relegated the plaintiff to the position of an ordinary customer of the bank who would have had to take his turn with the other customers of the bank for obtaining satisfaction. On the ground therefore that the bank held the plaintiff's money in a fiduciary capacity as the result of which the property in the amount did not vest in the Official Assignee, the Court below has recognised the pla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the appellant's case that the amount was paid into plaintiff's current account and that it was to carry interest at 5 annas per cent, has not been substantiated. It seems to us that the test for ascertaining whether there was any fiduciary relationship or only the relationship of banker and customer between the parties is put succinctly in Hart on Banking, Volume I (Fourth Edition) at page 582, where the decision in In re Brown : Ex parte Plitt 60 L.T. 397 : 6 Mor. 81 is considered. In that case Julius Plitt handed a cheque to Alexander Brown a banker with whom he had no banking account and obtained a receipt to the effect that the cheque was given for collection. Brown was adjudicated bankrupt after he had collected the amount of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nds, not for the purpose of being remitted when received to the principal, but for the purpose of being employed in a particular manner, in the purchase of land or stock; and which moneys the factor or agent is bound to keep totally distinct and separate from his own money; and in no way whatever to deal with or make use of them. How a person who is intrusted with funds under such circumstances differs from one in an ordinary fiduciary position I am unable to see. 8. The mere fact that the plaintiff had no prior banking transaction with the defendants' firm will not of course by itself be sufficient to exclude the possibility of the plaintiff having become a customer of the bank when he paid in the amounts. This is made clear in the ju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions payable by the depositor. The scope of the decision in Farley v. Turner (1857) 26 L.J. Ch. 710 is explained in the judgment in that case, and it was held that the depositor was a customer of the bank and not a person entitled to preferential treatment since no trust was created. 10. The decisions of this Court reported in Official Assignee of Madras v. Rajam Aiyar I.L.R.(1910) 36 Mad. 499 , Official Assignee of Madras v. Melapparangavur Sarvajana Sahaya Nidhi I.L.R. (1910) 34 Mad. 125 and Official Assignee of Madras v. Smith I.L.R.(1908) 32 Mad. 68 do not lay down any principles opposed to the rulings quoted above. 11. The account books of the parties in the present case show that the amounts were credited in anamath or suspense acco....