Banking Law Negotiable Instruments Act

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PAPER-5

BANKING LAW INCLUDING NEGOTIABLE INSTRUMENTS ACT nd

(2

st

Semester, 1  Year of the 3-Year LLB course)

Introduction Evolution of Banking Institutions – Services of Banks • Functions of Commercial Banks Social Control of Banks • Nationalisation of Banks – Institutional Frame work of Banking • The Reserve Bank of India and its Role • Functions of the Reserve Bank of India – RB and its promotional Role • R.B. and Commercial Banks. • The Banking Reuglation Act, 1949

1. Preliminary 2. Business of Banking Companies 3. Provisions of the Nationalizing Act – Application of B.R. Act 1949 to the Nationalized banks – Regulations for Nationalized Banks, Management of Nationalized Banks effects of Nationalisation – Achievement of Nationalised Banks 4. Controls over Management 5. Acquisition of the undertaking of Banking Companies in certain cases 6. Suspension of Business and winding up of Banking companies 7. Special Provisions for speedy disposal of winding up proceedings 8. Provisions relating to certain certain operations of Banking Companies 9. Miscellaneous Provisions 10. Banking organizations Private individuals – partnership firms – Hindu Joint family system – Banking companies or corporations. 11. Banker and customer cust omer : Definition D efinition of Banker – customer the General relation relati on between Banker and Customer Special features of the relationship Statutory obligation on Banks in India Bankers general lien – Banker obligation – Unremunerative Accounts Law and limitation and Deposits. 12. Bankers / Borrowers : Forms of Borrowing Borrow ing – Discounting Discountin g Bills – Participation Partici pation certificates, Bank deposits – fixed or time deposits – saving deposits – Attachment of Deposit by income Tax authorities – opening of new account Special types of Customers ; Married Women – Joint Accounts – Insolvency of Joint Account Holder, Drawing of cheque – Survivorship – Nomination – Power to overdraw – Husband and wife – Joint Stock Companies – Precautions to be taken in opening Accounts – Opening Accounts – opening of partnership Accounts. 13. Banking Operations ; Negotiable instruments and their characteristics – Payment of cheques – Protection to the Paying Banker – Crossing of Cheque – Payment of Customers Cheques – Collecting Banker and Customer Account. 14. Guarantees : Definitions – Indemnity and Guarantee – Distinction obligations of the Banker Rights of Banker against surely – Termination of Guarantee – Letters of Credit and Bank Guarantee.

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15. Advances Secured by Collateral Securities Modes of Securing Advances - Bankers Lien – Pledge – Mortgage of Movables – Hypothecation – Advances against goods and documents of title of goods. 16. Mortgages Leading Cases 1. State of Maharashtra Vs M.N.Kaul AIR 1967 SC 1934 2. Kerala Electrical and Allied Engineering Co Ltd Vs Canara Bank and other AIR 1980 Kar 151 3. Nagpur Nagarik Sahakari Bank Ltd Vs Union of India 1981 AP 153 4. Texmace Ltd Vs State Bank of India (1979) 83 CN 807 5. Maharashtra State Electricity Board Vs Official Liquidator, Ernakular – AIR 1983 SC 1947 6. United Bank of India, Vs Nederlandsche, Standard Bank (1963) 33 Compo Cas 1 7. Roshal Lal Anand Vs Mercantile Bank Ltd (1975) 5 Compos Cas 519 8. Ellerman and bucknall steamship Co Ltd Vs Sha Misrimal Bherajee AIR 1966 SC 1992 9. Morvi Mercantile Bank Ltd Vs Union of India (1965) 35 Compo Cas 629 10. Union Bank of India Vs Swastika Motors AIR 1983 Del 240 11. Syndicate Bank Vs The Arfician Co P Ltd 1977 Ker 103 12. The Canara Industrial and Banking Syndicate Ltd Vs Ramachandra Ganapathy Prabhu AIR 1968 Ms 133 13. Canara Bank Vs Canara Sales Corporation Ltd (1974) 44 Compo Cas 6 14. New Central Hall Vs The United Commercial Bank LTd AIR 1959 Mad 153 15. Canara Bank Ltd Vs I.V.Rajagopal (1975) 1 MLJ 420 16. Bapulal Premcahnd Vs North Bank Ltd AIR 1946 Bom 482 17. Maturi Sanyasalingam Vs the Exchange bank of India and Africa Ltd (1947) 17 Com Cas 233 18. Bharat Bank Vs Kishin Chand Clellaram 1954 (1 MLJ 560) 19. Bansilal Abirchand Vs Sadasiv Bhopathi (1942) 12 Compo Cas 116 20. Gopal Singh Hirasingh Vs Punjab National Bank and others AIR 1976 Delhi 115 21. Bank of Bihar Vs State of Bihar (1971) 41 Compos Cas 591 22. Tanjore Permanent Bank Ltd Vs Pangachari AIR 1959 Mad 119

Case Law Banker and Customer 23. Bank of Commercial Ltd Vs Kunj Behari Kar AIR 1945 24. SBI Vs Shyama Devi AIR 1978 SC 1263 25. Underwood Vs Banclay’s Bank 1924 – 1 KB 775 26. Canara Bank Ltd I.V. Raja Gopal Books Recommended S.Tannan – Banking Law and Practice in India M.S.Parthasarathy : Banking Law Leading Indian Ceases Negotiable Instruments :

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Negoitable and Assignability – Bill of Exchange, Cheque and Promissory Notes Indoresement _ Different types of Indosement- Effect of Indorsement conversionof blank indorsement into full indorsement. Negotionation or dishounoured and over due instruments present for acceptance presentment for payment – when presentment for payment unnecessary parties to bill of exchange holder and holder in due course special rights in due course – Classification Negotiable. Instruments Liabilities of Parties – Discharge from Liability, material alternation – Protection of Bankers – paying bank and collecting Banks. Dischonour, noting and Protest – Cheques special features – Distinction with bill of exchange and promissory note – Crossing of cheque Kinds of crossing legal effect of crossing special rules of evidence – Presumptions – promissory notes right and liabilities of parties. Comparison with bill of Exchange and cheque.