STATE BANK OF INDIA versus GHAMANDI RAM (DEAD) THROUGH SHRI GURBAX RAI

Citation: [1969] 3 S.C.R. 681 · Decided: 13-02-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
681 
STATE BANK OF INDIA 
v. 
GHAMANDI RAM (DEAD) THROUGH SHRI GURBAX RAI 
February 13, 1969 
B 
[I. C. SHAH, V. RAMASWAMI AND A. N. GROVER, II.] 
c 
D 
E 
I' 
G 
H 
Hindu Law-Joim Hindu family firm-I/ ·~rsol( or 'body of indivi-
duaJs not incorporated'. 
Private International Law-Priority between voluntary and involur.-
tary assignments of debts. 
The respondent was the karta of a joint Hindu family firm carrying on 
business, before the partition of India, in area now forming part ot Pakis-
tan. The firm had a cash credit account with the Imperial Bank (now 
State Bank of India) in that area and had pledged its goods with the Bank 
as security for repayment of the advances. After the partition, the family 
and its members came away to India and became evacuees in relation to 
Pakistan. The Bank sold the pledged goods in 1948, and after adjusting 
the amounts due to it credited the surplus amount in the account of the 
firm. The Pakistan (Administration of Evacuee Property) Ordinan.ce, 
1949, was promulgated on October IS, 1949 and was amended by the 
Pakistan (Administration of Evacuee Property) Amendment Act, 1951. 
Under s. 6( I) of the Ordinance all evacuee property shall vest and shall 
be deemed to have vested in the Custodian in Pakistan from March I, 
1947. By a notification dated February 19, 1952 the Pakistan Govern-
ment exempted, 'from the operation of tho provision of the Ordinance 'cash 
deposits made in Banks by persons other than companies or associations 
or bodies of individuals whether incorporated or not'. 
The respondent applied under s. 13 of the Displaced Persons (Debts 
Adjustments) Act, 1951 (Indian Act) before the Tribunal constituted 
under the Act, claiming the amount in the Bank credited in the account 
of the family. 
The Tribunal dismissed the application. 
In revision, the 
High Court allowed the claim on the ground that the amount was a 'cash 
deposit made by an individual' in terms of the Pakistan Notification dated 
February 19, 1952. 
In appeal to this Court, 
HELD: (I) Having regard to the juristic nature of the Hindu Joint 
family under the Mitakshara Law, the family firm could not be treated as 
a 'person' within the meaning lit the Pakistan notification. The firm was 
'a body of individuals not incorporated' 
and hence the amount in the 
Bank was evacuee property and had become vested in the Custodian of 
Evacuee Property, Pakistan, with effect from March I, 1947. (687 E-F] 
Sundar•anam Maistri v. Nara.rimhulu Maistri, I.L.R. 15 Mad. 149, 154, 
referred to. 
(2) The rule of Private International Law i& that where an involuntary 
usignment occurs after a voluntary assignment has already been made, the 
question whether the righb of the voluntary assignee have been postponed 
or def~ WO!Jld be govern~ by tho. kx situs lit the debt. In. the piaent 
case, smce \he mvoluntary us1gnment 10 favour of tho eu.todian in Pakis-
tan occurred in 1949, when the Ordinance was promulaated after the volun-
tarf •ssillD'llent by the Bank in favour of the ftrm In 1948 and the lftus of 
682 
SUPREME COURT REPORTS 
(1969) 3 S.C.R. 
the debt was Pakistan (the Bank having gamishable assets of the respon-
A 
dent in Pakistan which could be attached by the Custodian in Pakistan). the 
question of priority would be governed by the law in Palilitan, namely, the 
provisions of the Ordinance; and under the Ordinance, the amount vested in 
the Custodian in Pakistan with effect from March I, 1947. Therefore, the 
liability of the Bank to the firm must be deemed to have been extinguished. 
[687 H; 688 G; 689 F] 
Re: Queensland Mercantile and Agency Co. [1891] 1 Ch. 536 and 
B 
Arab Bank Ltd. v. Barclays Bank (Dominion, Colonial 
and 
Overseas) 
[1954] AC. 495, applied. 
Dicey, Conflict of Laws, 8th Edn. p. 780, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 449 of 
196.6. 
Appeal by special leave from the judgment a!Dd order dated 
C 
September 12, 1963 of the Punjab High Court Circuit Bench at 
Delhi in Civil Revision No. 104-D of 1958. 
Niren De, Attorney-General, S. V. Gupte, H. L. Anand and 
K. B. Mehta, for the appellant. 
Bishambar Lal, M. R. Garg, H. K. Puri and Radha Kishan 
Makhija, for the respondent. 
The Judgment of the Court was delivered by 
Ramaswami, J. Mis. Ghamandi Ram Gurbax Rai, a iomt 
Hindu family firm consisting of Ghamandi Ram, since deceased, 
Gurbax Rai, Chaman Lal and Jagan Nath, used to carry on busi-
ness in Bhawalpur State now forming part of West Pakistan, be·
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