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1950 DIGILAW 60 (KER)

Central Banking Corporation Ltd. v. Nedungadi Bank Ltd.

1950-08-07

GOVINDA PILLAI

body1950
Judgment :- The State Aided Bank of Travancore now known as the Central Banking Corporation Ltd., Alleppey is the petitioner in all these cases. A Company called Thomas D'Cruz & Co., Ltd. was the defendant in O.S. 39 of 1111 and O.S. 24 of 1110 of the District Court of Alleppey. This Company was also the defendant in O.S. 165 of 1111, 1739 of 1111 and 306 of 1111 of the Alleppey Munsiff's Court. The plaintiffs are different in all these cases and in execution of money decrees obtained by the plaintiffs certain amounts due to the defendant-company from two shipping companies named Hall Line represented by the local agents Messrs Aspinwall & Co. Ltd., and Clan Line represented by Messrs Peirce Leslie & Co. Ltd., on account of rebate in freight for goods got down by the defendant-company had been attached. The Central Banking Corporation preferred claims the attachment on the ground that the goods belonging to Thomas D'Cruz Company Ltd., had been pledged to them by Ext. II agreement, that a floating charge had been created on that Company's goods for money due to the claimants, that the relate attached being portion of the freight paid for the transport of the goods pledged to the Bank enured to the benefit of the claim, that the defendant-company had agreed to the claimant drawing such rebates, that the two local agents, i.e.. Messrs Aspinwall & Co. Ltd., and Messrs Peirce Leslie & Co. Ltd., had agreed to pay these rebates to the claimant and that the attachment was invalid so far as the amounts covered by the rebates were concerned. 2. The decree-holders in all the five objected to this. The District Court called up the Munsiff's Court case also and tried all the claim petitions jointly as a common question arose in all the cases. The Court below found that no charge had been created in favour of the claimant by virtue of Ext. II agreement, that there was no equitable assignment of the rebate, that the case of equitable assignment was not specifically pleaded in the petition and that the claimant could not therefore get any right over the rebates said to have been disputed by the agents of the shipping companies in court. The claimant therefore filed the revision petitions mentioned above as well as C.R.P. 331/1121 which is not yet ripe for argument. 3. Ext. The claimant therefore filed the revision petitions mentioned above as well as C.R.P. 331/1121 which is not yet ripe for argument. 3. Ext. II agreement no doubt allows a floating charge in favour of the claimant as regards certain goods specified in Schedule A to that agreement and to any other addition or substitution made thereto belonging to the defendant-company for the repayment of sums of money as may be found due from time to time from the defendant-bank on any account whatsoever so long as there is any balance due to the claimant bank. There was also a further covenant in Ext. II that the stocking trade would at all times be at 50% above the amount due to the bank. There is therefore no doubt that the claimant-bank had secured a floating charge over the goods pledged under Ext. II. But the amount in question would not come under the category of goods thus pledged. The defendant-bank would be getting down goods from foreign countries on payment of freight. It is usual for the shipping companies to refund a portion of this freight to the consignee as rebate. It is this amount that is attached. This will not come under any of the clause in Ext. II and so in my opinion no charge on the rebate has been created by this agreement. 4. But it is seen that the defendant-company had arranged with the local agents of the shipping company to send all rebate cheques due to them including those for the quarters ending 31 March 1935 and 30 June 1935. Ext. VIII dated 25th September 1935 is a letter from Messrs Aspinwall and Company Ltd., to the claimant where they mentioned that they had made a note to send direct all rebate cheques due to Messrs. Thomas D'Cruz Ltd., Alleppey, including those for the quarters ending 31st March and 30th June 1935 as for the authorisation letter dated 16.10.1935. Ext. XI dated 19th September 1935 was a previous letter from Messrs Aspinwall Company Ltd., to the claimant informing them that the defendant Company had authorised them to pay the rebate due to them for the quarters ending 31st March 1935 and 30th June 1935. Ext. Ext. XI dated 19th September 1935 was a previous letter from Messrs Aspinwall Company Ltd., to the claimant informing them that the defendant Company had authorised them to pay the rebate due to them for the quarters ending 31st March 1935 and 30th June 1935. Ext. X dated 21st September 1935 is a reply from Messrs Peirce Leslie & Co., Ltd., to the claimant making mention of a letter from the defendant-company in instructing them to send cheques for rebates due to them direct to the claimant for the quarters ending 31st March 1935 and 30th June 1935. Ext. XI dated 25th September 1935 is copy of a similar letter sent by Messrs. Peirce Leslie & Co. Ltd., to the defendant-Company. These letters would show that the defendant-company had arranged with the local agents of the two shipping companies to send the rebates directly to the claimant. This would no doubt amount to an equitable assignment of the rebates due to the defendant-company to the claimant. When a debtor directs a third party to pay a certain sum of money to his creditor out of a particular fund in the possession of the third party, there must be some communication from the debtor to the creditor, a communication which from the express or implied intention of the parties would be deemed in equity to be a transaction under which the debtor assigns the right to recover the debt to the creditor. If that is done that is sufficient to infer a case of equitable assignment as in this case. The ruling in Mamman v. Krishnan Nair (30 TLJ 350) is in point. The letters Exts. VIII to XI would clearly show that the rebates due to the defendant-company for the quarters ending with 31st March 1935 and 30th June 1935 had been assigned to the claimant. The view of the lower court that this case of equitable assignment had not been specifically pleaded is not correct. The fact of this transfer had been mentioned in paragraph 6 of the claim petition and this was answered in paragraph 5 of the objection petition by the creditor in O.S. 39 of 1111. The parties understood also the position and the lower court was apprised with the same. 5. The third contention noted in paragraph 4 of the order refers to this. The parties understood also the position and the lower court was apprised with the same. 5. The third contention noted in paragraph 4 of the order refers to this. There is therefore a case of equitable assignment made out so far the rebates due for the two quarters mentioned above. The claim petition in the four cases which I am dealing now should have been allowed to the extent of the rebates that accrued for the quarters ending with 31st March, 1935 and 30th June 1935. There is no means of finding out the exact amount that would be covered on account of the rebates for these two periods. A further enquiry in this matter is therefore necessary and the case are sent back to the lower court to find out the rebates due from the two shipping companies to the defendant-company for the quarters ending 31st March 1935 and 30th June 1935. The claims as regards these amounts will be allowed. This will be the order in the four cases O.S. 39/1111 and 24/1110 of the District Court and O.S. 306 and 173 of 1111 of the Munsiff's Court. There was no appearance for the creditors in O.S. 306 of 1111 and 173 of 1111 (C.R.P. 332 and 333 of 1121). In view of the complications created by the claimant for want of detailed pleading I would direct the parties to suffer their costs in all the four cases. The revision petitions are allowed to the extent mentioned above and this will be the order in all the four petitions. Remanded.