Implied authorization of a Local Board to issue negotiable orders and the determination of a holder in due course.

Oldfield, J.

1. I agree with the judgment which my learned brother is about to deliver. I desire only to add that it is probably impossible, and for the purpose of the present case is unnecessary, to give an exhaustive definition of the term bank or banker, and that in agreeing with my learned brothers observations I do not desire to commit myself to any.

Seshagiri Ayyar, J.

2. The first defendant in Original Suit No. 52 of 1916 was a contractor under the District Board of Trichinopoly. The plaintiff obtained a decree against him. He attached a certain sum of money in the hands of the District Board Engineer on the allegation that the money belonged to the first, defendant. Thereupon, the second defendant put in a claim petition on 16th October 1914. His claim was allowed. On 17th October 1914, the plaintiff brought the present suit Original Suit No. 52 of 1916) for a declaration that he is entitled to attach the money as belonging to the first defendant. He obtained an injunction on 20th October 1914. It was served on the District Treasury of Trichinoply on the 22nd. On the vary same day, without knowledge of the injunction, a cheque was issued to the second defendant. He endorsed it over on 23rd October to the fourth defendant, who was a banker. Subsequently, the money was paid to the fourth defendant on his undertaking to return it in case the plaintiff succeeded in the suit. Plaintiff succeeded before the District Munsif, but that judgment was reversed by the District Judge. He has preferred this Second Appeal.

3. The main question for consideration is whether the fourth defendant is a holder in due course. To decide this question, we have to see what the position of the Treasury is with reference to the District Board of Trichinopoly. In form, the order which directed the payment of money to the second defendant is a cheque. If it is cheque, there can be no doubt it can be negotiated, The learned vakil for the appellant contended, that as the Treasury is not a Bank, it was not competent to the District Board Engineer to issue a cheque on it, under Section 6 of the Negotiable Instruments Act. Mr. Srinivasagopala Achariyar contended that the Treasury is a bank within that section. After giving careful consideration to the question, I have come to the conclusion that the Treasury is not a bank Many of the Judges in England have felt considerable difficulty in defining a bank, Lord Brougham in Foley v. Hill (1848) 2 H.L. Cas., 28, 43 mentions certain characteristics of a bank. In the view of the noble and learned Lord, the element of making a profit by the business must exist in such cases. The case nearest in point is Halifax Union v. Wheelwright (1875) L.R. 10 Exch., 183. In that case Baron Cleasby, delivering the judgment of the Court, expressed himself thus at page 193: First it was said that, taking that statute together with several other statutes on the same subject, the word banker was not to be restricted to persons regularly engaged in the business of banking, but that any person who receives the money of another into his charge, and according to the course of business between them, pays it out by having drafts drawn upon him payable to order, ought to be considered a banker within that enactment. We cannot accede to that argument.

4. The present case is practically identical with the one decided by the Exchequer Court. The definition attempted by Mr. Hart in his book on the Law of Banking, namely that. A banker is one who, in the ordinary course of his business, honours cheques drawn upon him by persons from and for whom he receives monies on current accounts,

5. Indicates that the business must have a commercial side to it. The mere fact that a Treasury receives money from the District Board and respects orders issued to it for payment will not constitute the Treasury a bank; moreover, the District Board cannot be regarded as a customer.

6. It was suggested by the learned advocate for the respondent that as the m