PUNJAB AND KASHMIR BANK LTD Vs. L SOHAN LAL KHANNA

JUDGEMENT

(1.) THIS is a defendants appeal against a judgment and decree of the District Judge, Kashmir, by which the plaintiff respondents suit for the recovery of Rs. 20,812/8/ has been decreed to favour of the plaintiff against the defendant -appellant, namely, the Punjab and Kashmir Bank Ltd., Srinagar, and the parties have been left to bear their own costs.

(2.) THE main facts out of which this appeal has arisen are as follows: A Hindu joint family business firm, namely, Devkinandan Bodh Raj Khanna consisted of Devkinandan Khanna, the father, and three sons, Bodh Raj Khanna, Sohan Lal Khanna, the plaintiff, and Kanshi Ram Khanna. The firm in the name and style of Devkinandan Khanna and Bodhraj Khanna held Rs. 25,000/ - only in fixed deposit with the defendant bank for one year from 30 -9 -1946 to 30 -9 -1947 vide Ex. D. 1. The firm had given authority both to Bodh Raj Khanna and the plaintiff to operate the account, vide Ex. P. W. CL/1 so far as the plaintiff was concerned. On 4 -10 -1947, Bodh Raj withdrew Rs. 5,000/ - in cash from the Bank and the remaining sum of Rs. 20,812/87 - Rs. 812/8/ - was the interest due on the fixed deposit was allowed to be kept in the defendant Bank in the name of the plaintiff by the firm in floating suspense account, an intimation whereof was given to the plaintiff by the defendant, vide voucher Ex. P. 2. But the defendant Bank, which was in serious difficulties right from the date of the partition, namely, 15 -8 -1947, suspended payment in October, 1947 and on 26 -7 -1948 a scheme of arrangement for meeting the claims of the creditors of the Bank was sanctioned under S. 153 -A, Companies Act by this Court in re: Jammu and Kashmir Companies Act and the Punjab and Kashmir Bank Ltd. Srinagar, Case No. 9 of 2005 instituted on 26 -5 -1948 A on the basis of a similar scheme sanctioned by the East Punjab High Court on 28 -5 -1948. On 14 -10 -1952, a fresh order made by this Court sanctioned the amended scheme of arrangement proposed by the Bank and according to this arrangement the deposits with the Bank covered by the scheme included the sums held by the Bank under suspense account. On 27 -8 -1949, the plaintiff instituted the present suit claiming recovery of the full amount of Rs. 20,812/8/ - kept in the Bank in his favour in floating suspense account on the ground that it was held by the defendant as a trust for the plaintiff. The defendant contested the suit on the plea that the amount in question was not and could not be treated as trust money. The written statement went on to say "It could not and was never recognized as trust and the manager had no power to accept it a such. It is a deposit as defined in the scheme sanctioned by the High Court." It was also averred that the suit was not maintainable.

(3.) WE have heard the learned counsel for the parties at great length. The only point which falls for determination in this case is whether the amount in dispute was held by the Bank as a trust or whether it is covered by the term deposit as contained in the scheme sanctioned by the High Court. We have gone through the evidence with great care and, although we were taken through string of authorities of different High Courts in this case, we feel that the nature of the transaction which took place between the firm Devki nandan Bodh Raj Khanna and the defendant Bank on 4 -10 -1947, can best be determined by the evidence led by the parties in this case and the circumstances disclosed by it. The main evidence on this point is contained in the depositions of Bodh Raj, Sant Ram and Charanjit Lal, P. W.s and Madsudhan, Radha Krishen and Janki Nath, D. W.s. From this evidence it is quite clear that huge demands were made on the bank after 15 -8 -1947 and whatever cash the Srinagar Branch the principal Branch in Kashmir had, was spent up. In October, 1947 presumably due to the raids and the suspension of traffic on the Jhelum Valley Road remittances from Rawalpindi stopped altogether & the coffers of the Bank in Kashmir became empty, vide evidence of Madsudhan, accountant of Srinagar Branch. Although Bodh Raj, P.W., brother of the plaintiff, would make us believe that the transaction between the plaintiff and the defendant Bank was a natural one in so far as he has stated that Rs. 5,000/ - were withdrawn in cash by him on