Texas v. Bombay Banking Co. (Banking Law)
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The case involves Texas Co. Ltd suing Bombay Banking Co. over a sum of money allegedly fraudulently concealed by their agent, Prabhakar Vaidya, who overdrawn his account by 300,000. The court held that the knowledge of the agent was not enough to impute notice on the principal, and the appellants failed to prove that the money belonged to them rather than to Vaidya. Consequently, the appeal was dismissed with costs.
![Texas Co. Ltd
Vs. Bombay Banking Co.
(AIR 1919 PC 20)
By,
MOHAMMED HAROON RASHEED
B.A.LL.B (Hons.), [BSW] & [LLM]
Advocate
Email ID: adv.mdharoon@gmail.com
1
(c)2014 MD HAROON RASHEED, ADVOCATE](https://image.slidesharecdn.com/texasv-150830185239-lva1-app6892/85/Texas-v-Bombay-Banking-Co-Banking-Law-1-320.jpg)
Texas v. Bombay Banking Co. (Banking Law)
- 1. Texas Co. Ltd Vs. Bombay Banking Co. (AIR 1919 PC 20) By, MOHAMMED HAROON RASHEED B.A.LL.B (Hons.), [BSW] & [LLM] Advocate Email ID: [email protected] 1 (c)2014 MD HAROON RASHEED, ADVOCATE
- 2. Facts Appellants, a corporation incorporated under laws of the State of Texas in the USA having control over extensive field of oil. Their head office for India is in Bombay and for purpose of securing distribution throughout Bengal, they entered into agreement with one Prabhakar Vaidya. The respondent was agent of Vaidya’s firm. 2 (c)2014 MD HAROON RASHEED, ADVOCATE
- 3. Vaidya entered into a series of agreement between himself and variety of people. In addition to Vaidya position as agent for appellant, he was also member, together with one Kothavle in an V. N. Apte & co. who were treasure and agent of Respondent’s bank. Vaidya overdrawn to extent of 3,00,000 from the respondent bank. Appellant company instituted a suit Claiming repayment of sum of money on the ground that the money was theirs in Vaidya’s account, with knowledge of bank. 3 (c)2014 MD HAROON RASHEED, ADVOCATE
- 4. ISSUE • Is Sub-agent hired by agent working for agent or comes under purview of principal? • Whether the knowledge of agent alone is enough to impute constructive notice on principal? 4(c)2014 MD HAROON RASHEED, ADVOCATE
- 5. To succeed the claim, appellant should prove: a) Money was theirs. b) bank know the fact when received it. Later the appellants proved that money in the respondent bank was theirs and not of Vaidya’s and he was fraudulently hiding the fact from the bank and claiming the cash as his own 5 (c)2014 MD HAROON RASHEED, ADVOCATE
- 6. Laws Indian contract act, 1872 section 194. Agent should never fraudulently hide or conceal information with malafide or dishonest intention from the principal or the partner. 6 (c)2014 MD HAROON RASHEED, ADVOCATE
- 7. Judgment Agreement never said anything about the Sub-agency. Vaidya who had complete control over money told everyone that money was theirs and not the Respondent’s hereby fraudently hiding the source of the money. In this case it was held by Judges that it is entirely insufficient to impute constructive notice on bank who was acting as a partner for Vaidya which was only within his knowledge and was solely due to his own improper conduct. Thus, appeal dismissed with the cost. 7 (c)2014 MD HAROON RASHEED, ADVOCATE
- 8. (c)2014 MD HAROON RASHEED, ADVOCATE8