Case: United Commercial Bank Ltd Vs. Okara Grain Buyers Syndicate Ltd. &amp; Anr

to specify the authority in exercise of which it is claimed that the amount was forfeited. A copy of a letter dated March 4, 1949, from N. A. Haroon, Officer on Special Duty, West Pakistan Government, Finance Department, Lahore, addressed to the Manager, United Commercial Bank Ltd. was also produced by Shamim Yazdani. It is recited in the letter that he was directed to enclose a list of securities of non-Muslims deposited with the Branch Office and forfeited at Lyallpur, Okara and the Bank was requested to make arrangements for early realization of the amount for payment to the District Food Controllers concerned. Neither the original letter nor its authenticated copy has been produced. There is no reference to the source of the authority of the officer who purported to forfeit the amount. The letter even does not recite that the order of for feiture was made by him acting on behalf of the Government of Pakistan.9. It is common ground that the money deposited had not been paid by the Bank to the Government of Pakistan till the High Court decided the appeal. Counsel for the Bank urged that once an order was passed forfeiting the amount, the Bank held the amount on behalf of the Government of Pakistan. But underlies that argument the assumption that such an order was in fact passed by the Government of Pakistan. In the absence of any evidence to that effect, we are unable to hold that any such order of forfeiture was passed. We do not feel called upon in this case to consider whether an order passed by the Government of a foreign country forfeiting the property of an Indian national must be recognized by the Courts in this country as a complete discharge of the obligation in circumstances similar to those in this case, when the question is raised in the Courts here.10. It was faintly suggested that the amount of Rs. 40,000 had vested in the Custodian, Evacuee Property in Pakistan. But the question was never mooted at any stage of this litigation, and we cannot permit counsel for the Bank to make out that case for the first time in this Court.11. Finally it was contended, relying upon the judgment of this Court in Delhi Cloth and General Mills Co. Ltd. v. Harnam Singh, (1955) 2 SCR 402 = (AIR 1955 SC 590 ) that the dispute must be determined by the law of Pakistan and not by the law of India. In that case, the plaintiffs were residents of Lyallpur and were appointed by the Government of undivided Punjab to administer a scheme for rationing of cloth. The Cloth Mills through its branch office at Lyallpur supplied those persons with cloth from time to time and maintained a running account of the transactions. On partition in 1947, Lyallpur was allotted to Pakistan and the plaintiffs migrated to India as refugees. The Pakistan Government issued an Ordinance vesting all evacuee property in Pakistan in the Custodian of Evacuee Property in Pakistan, and prohibited payment of money to evacuees in Pakistan and ordered that all moneys payable to, or claimable by evacuees, be paid to the Deputy Custodian of Evacuee Property in Pakistan. Payments so made were to operate as a discharge charge from further liability to the extent of the payment. Breach of this law was punishable as an offence The Deputy Custodian of Evacuee Property demanded of the Mills the money payable to the plaintiffs and in satisfaction of the payment the Mills paid the amount. In defence to a suit filed by the plaintiffs in the Court of the Subordinate Judge, Delhi, the Mills pleaded that they had discharged their liability by payment made to the Deputy Custodian of Evacuee Property in Pakistan. This Court held that Lyallpur was the place of primary obligation, that the elements out of which the contract to day arose were most densely grouped at Lyallpur, and Lyallpur was the natural seat of the contract and the place with which it had its closets and most real connection. Accordingly the proper law of the contract was the law of Pakistan, and that even under the English doctrine the situs of the debt was Lyallpur and therefore either way the law of Pakistan applied.11-A. Assuming that it was the law of Pakistan which applied to the repayment of the debt due under the receipt, the Bank has failed to prove its defence that they are not liable to pay the money due under the deposit receipt. To recapitulate the facts, the amount was deposited by the Syndicate it was repayable to the Syndicate when demanded; the notice of repayment of the amount was served at the date when the deposit was made. The District Magistrate, Montgomery had no contractual relationship with the Bank, nor was the Bank constituted a trustee for the District Magistrate.The Bank has failed to prove that in exercise of any statutory or sovereign authority the Government of Pakistan have forfeited the amount. Nothing has been placed which may support the plea that under the law of Pakistan the Bank is not liable to repay the amount due under a deposit receipt on the due date, because an officer of the State is said to have the custody of the receipt evidencing the deposit.12. The order for payment of interest at a rate exceeding 2 per cent per annum was also challenged by the Bank. But the rate of interest was stipulated only for the period of the deposit receipt. The Syndicate claimed interest at the rate of 6 per cent per annum from the date on which the petition was filed before the Tribunal under the Displaced Persons (Debts Adjustment) Act, 70 of 1951. Interest from the date of the petition was within the discretion of the High Court, and the High Court has awarded interest at the rate claimed. We do not see any reason to interfere with the rate of interest awarded by the High Court.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We are of the view, even if Condition No. 5 of the terms of deposit receipt is a condition precedent to the enforcement of the obligation of the Bank in favour of the Syndicate, that the High Court was right in exercise of its equitable jurisdiction to direct that the money be paid to the Syndicate without production of the receipt. It may reasonably be inferred that the receipt is lost or destroyed and the Courts equitable jurisdiction may appropriately be exercised in this case. Whether the District Magistrate has the receipt is on the evidence problematic. Again the High Court has fully protected the Bank against any possible loss by directing that an indemnity be given by the Syndicate to the Bank for restitution if the Bank is made to pay the amount to the District Magistrate, Montgomery, and this eminently reasonable direction is not liable to be set aside.Finally it was contended, relying upon the judgment of this Court in Delhi Cloth and General Mills Co. Ltd. v. Harnam Singh, (1955) 2 SCR 402  = (AIR 1955 SC 590 ) that the dispute must be determined by the law of Pakistan and not by the law of India. In that case, the plaintiffs were residents of Lyallpur and were appointed by the Government of undivided Punjab to administer a scheme for rationing of cloth. The Cloth Mills through its branch office at Lyallpur supplied those persons with cloth from time to time and maintained a running account of the transactions. On partition in 1947, Lyallpur was allotted to Pakistan and the plaintiffs migrated to India as refugees. The Pakistan Government issued an Ordinance vesting all evacuee property in Pakistan in the Custodian of Evacuee Property in Pakistan, and prohibited payment of money to evacuees in Pakistan and ordered that all moneys payable to, or claimable by evacuees, be paid to the Deputy Custodian of Evacuee Property in Pakistan. Payments so made were to operate as a discharge charge from further liability to the extent of the payment. Breach of this law was punishable as an offence The Deputy Custodian of Evacuee Property demanded of the Mills the money payable to the plaintiffs and in satisfaction of the payment the Mills paid the amount. In defence to a suit filed by the plaintiffs in the Court of the Subordinate Judge, Delhi, the Mills pleaded that they had discharged their liability by payment made to the Deputy Custodian of Evacuee Property in Pakistan. This Court held that Lyallpur was the place of primary obligation, that the elements out of which the contract to day arose were most densely grouped at Lyallpur, and Lyallpur was the natural seat of the contract and the place with which it had its closets and most real connection. Accordingly the proper law of the contract was the law of Pakistan, and that even under the English doctrine the situs of the debt was Lyallpur and therefore either way the law of Pakistan applied.11-A. Assuming that it was the law of Pakistan which applied to the repayment of the debt due under the receipt, the Bank has failed to prove its defence that they are not liable to pay the money due under the deposit receipt. To recapitulate the facts, the amount was deposited by the Syndicate it was repayable to the Syndicate when demanded; the notice of repayment of the amount was served at the date when the deposit was made. The District Magistrate, Montgomery had no contractual relationship with the Bank, nor was the Bank constituted a trustee for the District Magistrate.The Bank has failed to prove that in exercise of any statutory or sovereign authority the Government of Pakistan have forfeited the amount. Nothing has been placed which may support the plea that under the law of Pakistan the Bank is not liable to repay the amount due under a deposit receipt on the due date, because an officer of the State is said to have the custody of the receipt evidencing the deposit.12. The order for payment of interest at a rate exceeding 2 per cent per annum was also challenged by the Bank. But the rate of interest was stipulated only for the period of the deposit receipt. The Syndicate claimed interest at the rate of 6 per cent per annum from the date on which the petition was filed before the Tribunal under the Displaced Persons (Debts Adjustment) Act, 70 of 1951. Interest from the date of the petition was within the discretion of the High Court, and the High Court has awarded interest at the rate claimed. We do not see any reason to interfere with the rate of interest awarded by the High Court.