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Banker as Bailee: Roles and Responsibilities

The document explores the banker-customer relationship, focusing on the banker as a bailee. It defines key terms, outlines the various relationships between bankers and customers, and details the duties and rights of bankers in their role as bailees. Additionally, it discusses relevant laws and concludes with suggestions for improving the relationship.

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Ramakrishnan R
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14 views3 pages

Banker as Bailee: Roles and Responsibilities

The document explores the banker-customer relationship, focusing on the banker as a bailee. It defines key terms, outlines the various relationships between bankers and customers, and details the duties and rights of bankers in their role as bailees. Additionally, it discusses relevant laws and concludes with suggestions for improving the relationship.

Uploaded by

Ramakrishnan R
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

CONTENTS

A study on banker as bailee in the relationship of banker and customer relationship

1. Introduction 1
2. Definition of Banker 2
Halsbury's Laws of England states 2
Walter Leaf states 2
According to Dr Harbert L. Hart defines 2
According to Mecleod 2
According to Sheldon 2
Sir John Paget defines 3
Bills of Exchange Act, 1882 3
Section 3 of Negotiable Instruments Act, 1881 3
Section 5 (b) of the Banking Regulation Act, 1949 3
3. Definition of Customer 3
Sir John Paget’s Definition of Customer 4
Case Law: 4
Great Western Railway company Vs. London and country Banking
Company Limited
Mathews Vs Willams Brown & Co 4
Duration Theory 4
According to Dr. Herbert L. Hart 4
4 The Relationship between a Banker and a Customer 4
5. General Relationship Between Banker and Customer 5
1. Debtor and creditor relationship
2. Principal and Agent Relationship
3. Fiduciary Relationship
4. Trustee and Beneficiary Relationship
5. Bailer and Bailee Relationship
6. Pawnee and Pawnor (or Pawner) Relationship
7. Mortgagee and Mortgagor Relationship
8. Lessee and lessor Relationship
9. Guarantor and Guarantee Relationship
6. Bailer and Bailee Relationship 6

I. Duties of the Banker as a Bailee 7

i. Duty to take reasonable care of goods bailed 7

Agreement exempting bailee bank from liability 7

Case Law

In Central Bank of India Grains & Gunny Agencies 8

In UCO v Hem Chandra Sarkar 8

i. Duty not to make unauthorised use of goods bailed 8

ii. Duty not to mix bailor's goods with his own goods 8

iii. Duty to return the goods on the fulfilment of the purpose 9

iv. Duty to deliver to the bailor increase or profit on good. Bailed 9

II Rights of Bailee Bank 9

i. Right to recover necessary expenses incurred on bailment 9


ii. Right to recover compensation from the bailor 10
iii. Right of lien on the goods hailed 10
iv. Right of suit against a wrongdoer 10
v. Safe Custody of Customer's valuables 10
a. Lockers 10
Farnum v Connection Bank and Trust Co. 11
b. Safe Deposit in the sealed covers or boxes 11
c. Directly handling over them to the banker 12
i. Safe custody Register 12
ii. Withdrawal of Articles 12
iii. Locker user register 12
III. Liability of the banker regarding the Safe Custody deposit 13
7. Relevant laws 14
I. Consumer Protection Act, 2019 14
II. Limitation Act, 1963 14
III. Banking Ombudsman 14
8. Conclusion 14
9. Suggestions 15
10. Reference 16

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