Brief facts of Devendrakumar Lalchandji vs Gulabsingh Nekhesingh
, A.I.R 1946 Nag
In this case, the Plaintiff is Devendrakumar Lalachandji and the Defendant is
The plaintiff is a banker and the defendant is a customer of that bank. The
defendant had opened two accounts; one is deposit account and another is loan
account with the plaintiff. The plaintiff alleged that the defendant had
instructed the plaintiff to transfer rupees 265-5-0 from the deposit account to
the loan account. The defendant admitted that he did not instruct the plaintiff
to transfer money from one account to the other. So, when the plaintiff filed a
suit claiming Rupees 290-10-0 on the loan account, the defendant denied the
claim. Along with denying the claim of plaintiff, the defendant made a counter
claim of Rupees 135-11-2.
The lower Court held that the defendant did not instruct
the plaintiff to transfer money from the deposit account to the loan account. It
also held that the plaintiff has no lien over his money against the deposit
account. So, the lower court in its trial dismissed the plaintiff's suit and
gave the decision in favor of the defendant. The defendant counter claim was
decreed by the lower court. As the plaintiff was not satisfied by the lower
court's decision, he applied for the revision against this decision. The
decision of the trial court was challenged by the plaintiff in revision in the Nagpur High Court.
Name of the Court:
The judgment was pronounced by the Nagpur High Court.
Name of the Judge:
The judgment was given by Puranik, J.
Date of the Decision:
The decision date was February 6, 1945.
Case No. :
Civil Revn. No. 542 of 1943.
- Whether the money deposited can be covered by the words goods bailed?
- Whether the banker has a lien?
The arguments presented by both the parties in the court are discussed here.
- Arguments by the Plaintiff:
- The learned counsel for the plaintiff argued that the word �goods'
includes money. So, the money can be the subject matter of the Bailment.
- The plaintiff argued that the Section 171 of the Indian Contract Act,
1872 is applicable by stating that the principle embodied in the section
would apply. As per this section, the defendant's counter claim for Rupees
135-11-2 was not available.
- Mainly, the petitioner argued that he claimed a lien by way of defence and
there is no bar of limitation.
- The counsel for the plaintiff argued that if any special provisions are
not present in Indian Contract act, 1872, then the principles of English law
should be applied under the Section 6 of the Central Provinces Laws Act.
- Arguments by the Defendant:
- The defendant's counsel contended that the money deposited cannot be
covered by the words �goods bailed'. They argued that the words �goods' is
not defined in the Indian Contract Act and also they mentioned that the
money was excluded from the definition of goods under the Section 2 (7) of
the Sale of Goods Act.
- The counsel for the defendant argued that the banker has no such lien to
transfer the money. The defendant contended that he did not instruct the
plaintiff. So, counter-claim can be applicable in this case.
- The counsel for the defendant argued that the plaintiff did not plead
that it was the settled law of land or that it was the usage of the banking
- The defendant argued that the plaintiff's claim on the basis of the loan
was barred by time and denied the claim of the plaintiff.
- The Nagpur High Court held that the decision made by the trial court is
contrary to law and therefore, it is wrong. The court held that the plaintiff's
claim is within time and the defendant has no right to recover from the
plaintiff because the plaintiff has such a lien on all the moneys of the
- As a result, the court held that the plaintiff is entitled to the decree
for the amount claimed (i.e. 290-10-0).
- The court held that the plaintiff, who is a banker, succeeds on facts as
well as law.
- The judge of the Nagpur High Court allowed the application for revision,
decreed the plaintiff's claim and dismissed the counter claim of the defendant,
with costs in both of the courts.
Analysis of the Case
- The Nagpur High Court accepted the plaintiff's contention. The court
explained the scenario of the case as per the English Law. Generally, banking
business in carried on the same lines on which it is carried on in England and
it is but natural that the bankers in India should treat themselves governed by
the rules that govern such business in England.
- When the defendant denied the claim of the plaintiff and stated that
claim on the basis of the loan was barred by time, the Court had explained
that even if there are no instructions from the defendant to transfer money,
the plaintiff's claim is within the time and his claim is justifiable.
- The court explained the challenge of plaintiff against the defendant and
the decision of the lower court by giving valid reason. While dealing with
the deposit account, the defendant found very little amount left to his
credit obtained which is known as an Overdraft. So, the defendant put his
signature in the account books of the plaintiff stating that the defendant
was overdrawing on the deposit account so that the bank can transfer money
from deposit account to the loan account. By keeping signature, he had given
the permission to the plaintiff to transfer the money.
- So, here the judge declared his decision based on the concept of English
Law, which is Section 6 of the Central Provinces Laws Act. It states the
rules of justice, equity and good conscience. This law was applied because
of the lack of provisions in the Indian Contract Act to deal with the
In this case, the petitioner was a banker and the
defendant was the customer of the same bank. The plaintiff made an allegation
that the 265-5-0/- was transferred from the deposit account to the loan account
as per the instructions of the defendant. But the defendant denied this claim
and made a counter-claim of 135-11-2/-. So, the plaintiff filed a suit claiming
290-10-0 on the loan account. The lower court gave the judgment in the favor of
the defendant and the plaintiff's suit was dismissed. So, the plaintiff made an
appeal against this decision and this case was further dealt by the Nagpur High
Then, the plaintiff's counsel argued that the
Section 171 of the Indian Contract Act was applicable to the facts of the case
and the words �goods bailed' include the deposited money. In the appeal, the
case was dealt in the assumption that there were instructions to transfer money
by the defendant. Hence, Section 171 was applied but there was confusion in the
words �goods bailed'. The counsel for the plaintiff in his argument mentioned
that word �goods' includes money and the section 171 of the Contract Act can be
applicable. So, the counter-claim of the defendant cannot be enforced.
As the plaintiff claimed a lien by way of
defence, there is no bar of limitation because bar of limitation won't apply to
anything that is claimed by way of defence. So, in this case, the banker has
such a lien over the defendant's accounts. Also, one argument was raised by the
plaintiff that if any special provision was absent in the Indian Contract act,
1872 to deal with the banker's lien, the rules of justice, equity and good
conscience should apply under the Section 6 of the Central Provinces Laws Act.
So, this law was applied in this case. Under this English Law, the banker has
such a lien over all the securities of the defendant.
Also, if the banker wants
to combine the two accounts or transfer the money form one account to the other,
he can do it under this English Law. The court held that even if there were no
instructions from the defendant to the plaintiff to transfer money, the banker
had lien and had authority to do the act. When the defendant argued that the
plaintiff done that act without his consent and the claim on the basis of the
loan as barred by time, the court held that the plaintiff's claim is within time
and defendant has nothing to recover from the plaintiff.
The court had proven that the defendant had
permitted the plaintiff to withdraw the money from the deposit account to the
loan account by keeping the signature in the account books of the plaintiff when
he found that only little balance was left to his credit while dealing with the
deposit account. So, the Nagpur High Court gave the judgment in the favor of the
plaintiff and held that the lower court's decision was wrong. The court held
that the plaintiff succeed on facts as well as law. The judgment was concluded
by decreeing the claim of the plaintiff and dismissing the counter claim of the
defendant, with costs in both the courts.
The laws applied in this case are:
1. Section 6 of the Central Provinces Laws Act.
2. Section 171 of Indian Contract Act, 1872.
3. Section 148 of Indian Contract Act, 1872.
4. Section 2 (7) of the Sale of Goods Act.
- Lien is one of the rights available to a person to retain possession of
goods owned by another person until the assertion of the person having the
control is satisfied. Under the Indian Contract Act, 1872 the Bailee is free
to employ or operate the Right of Lien in a Contract of Bailment.
- Devendrakumar Lalchandji Vs. Gulabsingh Nekhesingh, https://www.casemine.com/judgement/in/5ac5e2f24a932619d903b2d4