Judgment

SHAH, J.: Mr. Justice Bachawat of the High Court of Judicature at Calcutta decreed Suit No. 1039 of 1948 filed by one Pearey Lal - hereinafter called the plaintiff-for a decree for Rs. 1,35,000/- with interest against the New Bank of India Ltd. The appeal of the Bank against the decree was dismissed by a Division Bench of the High Court. With special leave the Bank has appealed to this Court.

2. The Bank had its registered office originally at Lahore but after the partition of India the office was transferred to Amritsar. The plaintiff who was a resident of Lahore had accounts with several banks including the New Bank of India Ltd. In view of the impending partition, the plaintiff was anxious to transfer his moveable property outside the territory which it was apprehended would be included in Pakistan, and he gave instructions for transferring his accounts with the Bank to its other branches in India. He also paid an amount of Rs. 1,25,000/- on July 18, 1917, into the Bank at Lahore with instructions to transmit the same to the Bank s branch at Calcutta which it then proposed to open in the near future. An amount of Rs. 10,000/- was also paid into the Bank at Lahore on July 19, 1947, with similar instructions. In respect of these two transactions the Bank executed receipts which are set out below:

"Received the sum of Rs. 1,25,000/- (Rupees One Lac and twenty-five thousand) only from Mr Peareylal on account of amount to be remitted to Calcutta branch for preparing various F. D. Receipts subject to his instructions on or after the opening date when he would call upon them personally

Lahore for the New Bank of India Ltd.

The 18th day of Sd. Illegible

July, 1947. Manager."

........... ......... ............ ....... .........

........... ......... ............ ....... .........

Received the sum of Rs. 10,000/- (Rupees ten thousand) only through Mr. Peareylal for transmission to our Calcutta Office for making up various F. D Receipts at his instance when he calls upon them personally on or after the opening date of the Branch.

Lahore for the New Bank of India Ltd.

19-7-47 Sd. Illegible

Manager."

The two amounts were transmitted by the Bank to Calcutta. A branch of the Bank was opened at Calcutta on September 24, 1947, but within a few days thereafter the Bank ceased making payments. It appears that a moratorium for a limited period was declared under an Ordinance issued by the Governor-General restraining the Bank from making payments to its depositors. In December, 1947, after the expiry of the period of the moratorium the plaintiff applied to the Bank s branch at Calcutta for facility to withdraw the whole amount but the Calcutta Branch raised certain technical objections against such a course. On March 24, 1948, the plaintiff commenced an action against the Bank inter alia for a decree of Rs. 1,35,000/- in the Calcutta High Court on its original side. During the pendency of the suit the High Court of East Punjab sanctioned a scheme for arrangement under Ss. 153 and 153A of the Indian Companies Act, 1913, for settlement of the liability of the Bank. By the first clause of the scheme the expression "deposit" was to include "Fixed Deposits, Bank s own cash Certificates, Current Accounts, Deposits at Call, Savings Fund Accounts. Amounts lying in Sundries or in any other kind of Credit Accounts, Bank Drafts Cash, Orders & documents of the like nature & amounts due to Bankers over & above the value of Government Securities lying with them against such depositors". It was directed by the scheme, as it finally emerged, that the depositors were to be paid 70 1/2% of the deposits held by them and to be allotted shares of the face value of 5% of the deposits.

3. The plaintiff claimed by his suit that he had entrusted to the Bank at its registered office at Lahore Rs. 1,35,000/on July 18 and 19, 1947, with instructions to transmit the same to the branch of the Bank which it proposed to open at Calcutta and to hold the amount subject to further