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COVID-19: An Act of God? Insurance Perspective

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u00a0Yashas Malik,

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nJanuary 9, 2023 at 11:28 am

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The COVID-19 pandemic came with a roar and attacked the globe, which resulted in national lockdowns to control the spread of this deadly virus. Such cross-border and domestic movement restrictions have impacted businesses significantly throughout the globe, leading to cancellation or postponement of various sports and entertainment events, including Tokyo Olympics 2021, which was scheduled for mid of 2020 and IPL 2021 suspension- due to deadly second wave in India. While one may have an impression of being safe under insurance cover on such business interruptions and event cancellations, but such claims are likely to face certain issues. Since most of the prevailing underwriters in the market did not issue many policies which covers the loss due to direct impact of a pandemic, simply because if all the insurances were to cover such losses, then insurers do not have enough resources or the amount of claims they’ll be exposed to will be astronomical and abnormally large for any insurance company to account for. But, if the perils do not exclude such instances, then the principle of ‘contra proferentum’ will come to shine the claimant’s armor. The author in his work tries to determine the scope of exclusions and reaction of courts with regards to application of principle of ‘loss of utility’ to insurance contracts having direct impact of the pandemic, whilst focusing on intertwined concepts of act of God and frustration and further elaborating

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Volume :u00a0u00a04 | Issue :u00a0u00a02 | Received :u00a0u00a0June 20, 2021 | Accepted :u00a0u00a0June 29, 2021 | Published :u00a0u00a0January 25, 2022n[if 424 equals=”Regular Issue”][This article belongs to Journal of Banking and Insurance Law(jbil)] [/if 424][if 424 equals=”Special Issue”][This article belongs to Special Issue COVID-19: An Act of God? Insurance Perspective under section in Journal of Banking and Insurance Law(jbil)] [/if 424]
Keywords COVID-19, pandemic, insurance, virus, contra proferentum, act of God

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1. Industrial Promotion & Investment Corpn. of Orissa Ltd. v. New India Assurance Co. Ltd., (2016) 15 SCC 315 and Central Bank of India v. Virudhunagar Steel Rolling Mills Ltd., (2015) 16 SCC 207
2. Black’s Law Dictionary, Sixth Edition, Page 33.
3. Middaugh v. U.S., D.C.Wyo., 293 F.Supp. 977, 980.
4. Divisional Controller, KSRTC v. Mahadeva Shetty, (2003) 7 SCC 197 : 2003 SCC (Cri) 1722 at page 201.
5. These principles were developed in case of Ryland v. Fletcher (1868) LR 3 HL 330 (landmark judgement on strict liability)
6. Universal Image Productions v. Federal Insurance Co., 475 Fed. Appx. 569 (6th Cir. 2012).
7. Essex Ins. Co. v. BloomSouth Flooring Corp., 562 F.3d 399, 406 (1st Cir. 2009).
8. Mama Jo’s, Inc. v. Sparta Insurance Co., No. 17-cv-23362-KMM, 2018 U.S. Dist. LEXIS 201852.
9. Columbiaknit, Inc. v. Affiliated FM Ins. Co., No. Civ. 98-434-HU, 1999 WL 619100.
10. Gregory Packaging Inc. v. Travelers Property Casualty Co. of America, 2014 WL 6675934).
11. Port Authority of New York and New Jersey v. Affiliated FM Insurance Co., 311 F.3d 226 (US Court of Appeals, 3rd District).
12. Wakefern Food Corporation & Ors. v. Liberty Mutual Fire Insurance Co., 406 N.J. Super 524: 968 A.2d 724, Superior Court of New Jersey, Appellate Division.
13. The Western Fire Insurance Co. v. The First Presbyterian Church, Littleton, Colorado, 165 Colo. 34: 437 P.2d 52, Supreme Court of Colorado.COVID-19: An Act of God? Insurance Perspective Yashas Malik © Law Journals 2021. All Rights Reserved 8
14. JSW Steel Ltd. v. ICICI Lombard General Insurance Co. Ltd., MANU/MH/3792/2018.
15. Studio 417, Inc v. The Cincinnati Insurance Company, 20-cv-03127-SRB.
16. Elegant Massage, LLC v. State Farm Mut. Auto. Ins. Co., CIVIL ACTION NO. 2:20-cv-265, E.D. Va. Dec. 9, 2020.
17. A. Saxena and M. Lakhani, “Covid-19: Absence of legislative intervention may impacy commercial insurance claims,” Cyril Amarchand Mangaldas, 19 May 2020. [Online]. [Accessed 5 May 2021].
18. C. Cohn and N. Hussain, “Insurers face ‘mind-blowingly’ large loss if Olympics cancelled,” Reuters, 27 January 2021. [Online]. Available: https://www.reuters.com/article/us-olympics- insuranceidUSKBN29W1OL. [Accessed 5 May 2021].
19. Corona Kavach and Corona Rakshak policies
20. N. Dubey, “Force majeure clause won’t apply to coronavirus death claims in life insurancepolicies,” Economic Times: ET Online, 7 April 2020. [Online]. Available:
https://economictimes.indiatimes.com/wealth/insure/life-insurance/force-majeure-clause-wontapply-to-coronavirus-death-claims-in-life-insurance-policies/articleshow/75004294.cms.
[Accessed 5 May 2021].
21. IRDAI Notification, dt. 26 August 2020.

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[if 424 not_equal=”Regular Issue”] Regular Issue[/if 424] Open Access Article

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Editors Overview

jbil maintains an Editorial Board of practicing researchers from around the world, to ensure manuscripts are handled by editors who are experts in the field of study.

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    By  [foreach 286]n

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    Yashas Malik

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  1. Law Student,Vivekananda Institute of Professional Studies, Guru Gobind Singh Indraprastha University,New Delhi,India

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Abstract

nThe COVID-19 pandemic came with a roar and attacked the globe, which resulted in national lockdowns to control the spread of this deadly virus. Such cross-border and domestic movement restrictions have impacted businesses significantly throughout the globe, leading to cancellation or postponement of various sports and entertainment events, including Tokyo Olympics 2021, which was scheduled for mid of 2020 and IPL 2021 suspension- due to deadly second wave in India. While one may have an impression of being safe under insurance cover on such business interruptions and event cancellations, but such claims are likely to face certain issues. Since most of the prevailing underwriters in the market did not issue many policies which covers the loss due to direct impact of a pandemic, simply because if all the insurances were to cover such losses, then insurers do not have enough resources or the amount of claims they’ll be exposed to will be astronomical and abnormally large for any insurance company to account for. But, if the perils do not exclude such instances, then the principle of ‘contra proferentum’ will come to shine the claimant’s armor. The author in his work tries to determine the scope of exclusions and reaction of courts with regards to application of principle of ‘loss of utility’ to insurance contracts having direct impact of the pandemic, whilst focusing on intertwined concepts of act of God and frustration and further elaboratingn

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Keywords: COVID-19, pandemic, insurance, virus, contra proferentum, act of God

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References

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1. Industrial Promotion & Investment Corpn. of Orissa Ltd. v. New India Assurance Co. Ltd., (2016) 15 SCC 315 and Central Bank of India v. Virudhunagar Steel Rolling Mills Ltd., (2015) 16 SCC 207
2. Black’s Law Dictionary, Sixth Edition, Page 33.
3. Middaugh v. U.S., D.C.Wyo., 293 F.Supp. 977, 980.
4. Divisional Controller, KSRTC v. Mahadeva Shetty, (2003) 7 SCC 197 : 2003 SCC (Cri) 1722 at page 201.
5. These principles were developed in case of Ryland v. Fletcher (1868) LR 3 HL 330 (landmark judgement on strict liability)
6. Universal Image Productions v. Federal Insurance Co., 475 Fed. Appx. 569 (6th Cir. 2012).
7. Essex Ins. Co. v. BloomSouth Flooring Corp., 562 F.3d 399, 406 (1st Cir. 2009).
8. Mama Jo’s, Inc. v. Sparta Insurance Co., No. 17-cv-23362-KMM, 2018 U.S. Dist. LEXIS 201852.
9. Columbiaknit, Inc. v. Affiliated FM Ins. Co., No. Civ. 98-434-HU, 1999 WL 619100.
10. Gregory Packaging Inc. v. Travelers Property Casualty Co. of America, 2014 WL 6675934).
11. Port Authority of New York and New Jersey v. Affiliated FM Insurance Co., 311 F.3d 226 (US Court of Appeals, 3rd District).
12. Wakefern Food Corporation & Ors. v. Liberty Mutual Fire Insurance Co., 406 N.J. Super 524: 968 A.2d 724, Superior Court of New Jersey, Appellate Division.
13. The Western Fire Insurance Co. v. The First Presbyterian Church, Littleton, Colorado, 165 Colo. 34: 437 P.2d 52, Supreme Court of Colorado.COVID-19: An Act of God? Insurance Perspective Yashas Malik © Law Journals 2021. All Rights Reserved 8
14. JSW Steel Ltd. v. ICICI Lombard General Insurance Co. Ltd., MANU/MH/3792/2018.
15. Studio 417, Inc v. The Cincinnati Insurance Company, 20-cv-03127-SRB.
16. Elegant Massage, LLC v. State Farm Mut. Auto. Ins. Co., CIVIL ACTION NO. 2:20-cv-265, E.D. Va. Dec. 9, 2020.
17. A. Saxena and M. Lakhani, “Covid-19: Absence of legislative intervention may impacy commercial insurance claims,” Cyril Amarchand Mangaldas, 19 May 2020. [Online]. [Accessed 5 May 2021].
18. C. Cohn and N. Hussain, “Insurers face ‘mind-blowingly’ large loss if Olympics cancelled,” Reuters, 27 January 2021. [Online]. Available: https://www.reuters.com/article/us-olympics- insuranceidUSKBN29W1OL. [Accessed 5 May 2021].
19. Corona Kavach and Corona Rakshak policies
20. N. Dubey, “Force majeure clause won’t apply to coronavirus death claims in life insurancepolicies,” Economic Times: ET Online, 7 April 2020. [Online]. Available:
https://economictimes.indiatimes.com/wealth/insure/life-insurance/force-majeure-clause-wontapply-to-coronavirus-death-claims-in-life-insurance-policies/articleshow/75004294.cms.
[Accessed 5 May 2021].
21. IRDAI Notification, dt. 26 August 2020.

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Volume 4
Issue 2
Received June 20, 2021
Accepted June 29, 2021
Published January 25, 2022

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Emerging Jurisprudence on Corporate Insolvency

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Views: 676
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Editors Overview

jbil maintains an Editorial Board of practicing researchers from around the world, to ensure manuscripts are handled by editors who are experts in the field of study.

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Fire insurance means insurance against any loss caused by fire. Fire insurance has no direct relation to saving but is always a question of indemnity for property. The principle of indemnity, which arises under common law, ensures that the insured does not recover more than actual loss suffered by him/her. The principle of indemnity gives rise to the principles of subrogation and contribution which ensure that an insured does not gain under the insurance contract. The application of these principles to a contract of fire insurance raises imminent questions about concepts such as policy coverage or depreciation, status of salvage value, underinsurance and limited interest. A Standard Fire and Special Perils Policy must be discussed in the light of these nuances. Thus, the purpose of this paper is to provide a clear picture as to the nature and purpose of fire insurance by studying the application of principle of indemnity and incidentally, the principles of subrogation and contribution to a contract of fire insurance. The discussion leads to results which help in understanding the settled position taken by courts regarding the aspects of fire insurance contract. Further, based upon the discussion, ways and methods have been recommended to resolve the studied issues and make the fire insurance regime in India more efficient and efficacious. The paper has value for all stakeholders, especially insurance companies and its customers as its ultimate aim is to help in eliminating uncertainty in fire insurance contract which would help both, insured and insurer, in better implementation of a fire insurance contract.

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Principle of Indemnity in Fire Insurance: A Critical Analysis

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u00a0Devina Srivastava, Divya Jakhar, Rushil Desai, Aswathi Vakkayil,

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nMarch 17, 2023 at 9:45 am

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Fire insurance means insurance against any loss caused by fire. Fire insurance has no direct relation to saving but is always a question of indemnity for property. The principle of indemnity, which arises under common law, ensures that the insured does not recover more than actual loss suffered by him/her. The principle of indemnity gives rise to the principles of subrogation and contribution which ensure that an insured does not gain under the insurance contract. The application of these principles to a contract of fire insurance raises imminent questions about concepts such as policy coverage or depreciation, status of salvage value, underinsurance and limited interest. A Standard Fire and Special Perils Policy must be discussed in the light of these nuances. Thus, the purpose of this paper is to provide a clear picture as to the nature and purpose of fire insurance by studying the application of principle of indemnity and incidentally, the principles of subrogation and contribution to a contract of fire insurance. The discussion leads to results which help in understanding the settled position taken by courts regarding the aspects of fire insurance contract. Further, based upon the discussion, ways and methods have been recommended to resolve the studied issues and make the fire insurance regime in India more efficient and efficacious. The paper has value for all stakeholders, especially insurance companies and its customers as its ultimate aim is to help in eliminating uncertainty in fire insurance contract which would help both, insured and insurer, in better implementation of a fire insurance contract.

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Volume :u00a0u00a02 | Issue :u00a0u00a01 | Received :u00a0u00a0March 9, 2023 | Accepted :u00a0u00a0March 29, 2019 | Published :u00a0u00a0July 17, 2019n[if 424 equals=”Regular Issue”][This article belongs to Journal of Banking and Insurance Law(jbil)] [/if 424][if 424 equals=”Special Issue”][This article belongs to Special Issue Principle of Indemnity in Fire Insurance: A Critical Analysis under section in Journal of Banking and Insurance Law(jbil)] [/if 424]
Keywords Contribution; Fire Insurance; Indemnity; Subrogation

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  1. M. Danzon, Tort Reform and the Role of Government in Private Insurance Markets, 13(3) The Journal of Legal Studies 517, 549 (1984).
  2. Section 2(6A), The Insurance Act 1938.
  3. Lucena Craufurd, 127 Eng. Rep. 630, 642 (1805) (Lawrence, J.J.)
  4. F. Gephart, Fire Insurance Rates and State Regulation, 28(3) The Quarterly Journal of Economics 447, 465 (1914).
  5. Insurance: Remedy of Insured upon Wrongful Cancellation by the Insurer, 9(8) Michigan Law Review 730, 731 (1911).
  6. Arif Khan, Theory and Practice of Insurance 20 (1999).
  7. Insurance: Subrogation: Accident Insurance, 7(2) Michigan Law Review 177, 179 (1908).
  8. A. S, Insurance: Concept of Indemnity as Limiting Recovery on Fire Insurance Policies, 32(4_ Michigan Law Review 529, 538 (1934).
  9. McGee, The Modern Law of Insurance 4 (2006).
  10. Avtar Singh, Law of Insurance 8 (3rd 2017).
  11. (1854) 15 CB 365, 387.
  12. [1883] 11 QBD 380, 386 (CA).
  13. James Jr., Indemnity, Subrogation, and Contribution and the Efficient Distribution of Accident Losses. 21 NACCA LJ 360 (1958).
  14. [1962] 2 QB 330, 339.
  15. North British London, Liverpool and Globe, (1877) 5 Ch D 569
  16. Andrews Patriotic Assurance of Ireland, (1886) LR 1r 355.
  17. American Surety Co. Irrighton, (1910) 37 TLR 91.
  18. Jenkines Deane, (1933) 103 LJKB 250
  19. V. Srinivasan, Principles of Insurance Law 474 (8th ed. 2009).
  20. V.S. Sarma, Modern Law of Insurance in India 175 (5th ed. 2013).
  21. The Alexian Hope, (1988) FTLR 270.
  22. (1807) 1 Camp 123.
  23. Re Earl Egmount’s Trust, Lefroy Earl Egoinot, [1908] 1 Ch 821, 826.
  24. (1910) FTGH 98.
  25. K. Exports (P) Ltd. v. New India Assurance Co. Ltd., III (2004) CPJ 74 NC.
  26. Balfour Barty King, [1957] 2 WLR 84.
  27. State of U.P. Deputy Labour Commissioner, (2011) 2 SCC Online All 24.
  28. Rohini Nandan Goswami Ocean Accident and Guarantee Co., AIR 1960 Cal 696.
  29. United India Insurance Co. Ltd. M/S Kiran Combers & Spinners, (2006) 5 SCC 128.
  30. Supra at 12 at 177.
  31. L. Vaughan & T. Vaughan, Fundamentals of Risk and Insurance 68 (2007).
  32. (1886) 34 Ch D 234.
  33. ILR 14 All 273.
  34. Supra at 12 at 178.
  35. (1879) 26 GR 341 (UC).
  36. Rice Bazendale, (1861) 7 H&n 96.
  37. Bousfield Barnes, (1815) 4 Camp 228.
  38. W. Stempel, Law of Insurance Contract Disputes 98 (1955).
  39. Maurice Goldsborough Mort & Co. Ltd., [1939] AC 452 (PC).
  40. Lowry, P.J. Rawlings & R. Merkin, Insurance Law: Doctrines and Principles 182 (2011).
  41. Vance Forster, 26 GR 341 (UC).
  42. H. Reader, Modern Day Actual Cash Value: Is It What the Insurers Intend? Tort & Insurance Law Journal 282, 294 (1987).
  43. 689 So. 2d 290, 291 (Fla. 3d DCA 1997).
  44. Black’s Law Dictionary 506, 1690 (9th ed. 2009).
  45. Jonathon C. Held & Heidi Hudson Raschke, Defining Indemnity in the Context of Actual Cash Value Calculations 54 (February 2018).
  46. Valuation and Measure of Recovery under Fire Insurance Policies, 49(6) Columbia Law Review 818-836 (1949).
  47. R. Collins, P.W. Rasmussen, S. Beutel & M.M. Doty, The Problem of Underinsurance and How Rising Deductibles will Make it Worse, Issue Brief. New York, NY: The Commonwealth Fund 2297, 2301 (2015).
  48. Dickinson & L. Roberts, Underinsurance on a Portfolio of Property Exposures in an Inflationary Environment, 6(21) The Geneva Papers on Risk and Insurance 3, 19 (1981).
  49. (2009) 7 SCC 777: 2009 3 CPR 272.
  50. (1874) LR 9 CH App 483.
  51. Monroe Southern Mutual Ins. Co., 63 Ga. 669 (1879)
  52. Harnett & J.V. Thornton, Insurable Interest in Property, Ins. LJ 420 (1949).
  53. Fire Insurance Recovery on a Limited Interest in Property, 50(7) Columbia Law Review 960, 970 (November 1950).
  54. Ibid.
  55. 1925 AC 619 (HL).
  56. Waters Monarch Life Assurance Co, 1856 5 E & B 870.
  57. S. Quinn, 74 Subrogation, Restitution, and Indemnity, Texas Law Review 1361 (1960).
  58. Oberai Forwarding Agency New India Assurance Co. Ltd, (2000) 2 SCC 407
  59. (2017) 2 SCC Online Del 87.
  60. Cousins and Co. Ltd. v. D & C Carriers Ltd., (1971) 2 QB 230.
  61. Mark Rowlands Ltd. Berni Inns Ltd., 1985 QB 211.
  62. L Lucas Ltd. Export Credit Guarantee Deptt, (1974) 1 WLR 909.
  63. Phoenix Assurance Co. Spooner, (1905) 2 KB 753 (CA).
  64. Barry, Applying the Contribution Principle, 36(1-2) Metaphilosophy 210, 227 (2005).
  65. [2009] VSCA 124.
  66. HIH Claims Support Ltd v. Insurance Australia Ltd, [2011] HCA 31.
  67. W. Greg, Fire Insurance: Is ‘Double’ Payment Necessarily Overpayment?27(6) Michigan Law Review 683, 686 (1929).
  68. Insurance: Indemnity Policy: Liability for Premiums, 8(6) Michigan Law Review 508, 509 (1910).

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[if 424 not_equal=”Regular Issue”] Regular Issue[/if 424] Open Access Article

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Editors Overview

jbil maintains an Editorial Board of practicing researchers from around the world, to ensure manuscripts are handled by editors who are experts in the field of study.

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  1. Scholar,Symbiosis Law School, Pune, Symbiosis International (Deemed) University, Pune, Symbiosis Law School, Pune, Symbiosis International (Deemed) University, Pune, Symbiosis Law School, Pune, Symbiosis International (Deemed) University, Pune, Symbiosis Law School, Pune, Symbiosis International (Deemed) University, Pune,Maharashtra, Maharashtra, Maharashtra, Maharashtra,India, India, India, India

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Abstract

nFire insurance means insurance against any loss caused by fire. Fire insurance has no direct relation to saving but is always a question of indemnity for property. The principle of indemnity, which arises under common law, ensures that the insured does not recover more than actual loss suffered by him/her. The principle of indemnity gives rise to the principles of subrogation and contribution which ensure that an insured does not gain under the insurance contract. The application of these principles to a contract of fire insurance raises imminent questions about concepts such as policy coverage or depreciation, status of salvage value, underinsurance and limited interest. A Standard Fire and Special Perils Policy must be discussed in the light of these nuances. Thus, the purpose of this paper is to provide a clear picture as to the nature and purpose of fire insurance by studying the application of principle of indemnity and incidentally, the principles of subrogation and contribution to a contract of fire insurance. The discussion leads to results which help in understanding the settled position taken by courts regarding the aspects of fire insurance contract. Further, based upon the discussion, ways and methods have been recommended to resolve the studied issues and make the fire insurance regime in India more efficient and efficacious. The paper has value for all stakeholders, especially insurance companies and its customers as its ultimate aim is to help in eliminating uncertainty in fire insurance contract which would help both, insured and insurer, in better implementation of a fire insurance contract.n

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Keywords: Contribution; Fire Insurance; Indemnity; Subrogation

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References

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  1. M. Danzon, Tort Reform and the Role of Government in Private Insurance Markets, 13(3) The Journal of Legal Studies 517, 549 (1984).
  2. Section 2(6A), The Insurance Act 1938.
  3. Lucena Craufurd, 127 Eng. Rep. 630, 642 (1805) (Lawrence, J.J.)
  4. F. Gephart, Fire Insurance Rates and State Regulation, 28(3) The Quarterly Journal of Economics 447, 465 (1914).
  5. Insurance: Remedy of Insured upon Wrongful Cancellation by the Insurer, 9(8) Michigan Law Review 730, 731 (1911).
  6. Arif Khan, Theory and Practice of Insurance 20 (1999).
  7. Insurance: Subrogation: Accident Insurance, 7(2) Michigan Law Review 177, 179 (1908).
  8. A. S, Insurance: Concept of Indemnity as Limiting Recovery on Fire Insurance Policies, 32(4_ Michigan Law Review 529, 538 (1934).
  9. McGee, The Modern Law of Insurance 4 (2006).
  10. Avtar Singh, Law of Insurance 8 (3rd 2017).
  11. (1854) 15 CB 365, 387.
  12. [1883] 11 QBD 380, 386 (CA).
  13. James Jr., Indemnity, Subrogation, and Contribution and the Efficient Distribution of Accident Losses. 21 NACCA LJ 360 (1958).
  14. [1962] 2 QB 330, 339.
  15. North British London, Liverpool and Globe, (1877) 5 Ch D 569
  16. Andrews Patriotic Assurance of Ireland, (1886) LR 1r 355.
  17. American Surety Co. Irrighton, (1910) 37 TLR 91.
  18. Jenkines Deane, (1933) 103 LJKB 250
  19. V. Srinivasan, Principles of Insurance Law 474 (8th ed. 2009).
  20. V.S. Sarma, Modern Law of Insurance in India 175 (5th ed. 2013).
  21. The Alexian Hope, (1988) FTLR 270.
  22. (1807) 1 Camp 123.
  23. Re Earl Egmount’s Trust, Lefroy Earl Egoinot, [1908] 1 Ch 821, 826.
  24. (1910) FTGH 98.
  25. K. Exports (P) Ltd. v. New India Assurance Co. Ltd., III (2004) CPJ 74 NC.
  26. Balfour Barty King, [1957] 2 WLR 84.
  27. State of U.P. Deputy Labour Commissioner, (2011) 2 SCC Online All 24.
  28. Rohini Nandan Goswami Ocean Accident and Guarantee Co., AIR 1960 Cal 696.
  29. United India Insurance Co. Ltd. M/S Kiran Combers & Spinners, (2006) 5 SCC 128.
  30. Supra at 12 at 177.
  31. L. Vaughan & T. Vaughan, Fundamentals of Risk and Insurance 68 (2007).
  32. (1886) 34 Ch D 234.
  33. ILR 14 All 273.
  34. Supra at 12 at 178.
  35. (1879) 26 GR 341 (UC).
  36. Rice Bazendale, (1861) 7 H&n 96.
  37. Bousfield Barnes, (1815) 4 Camp 228.
  38. W. Stempel, Law of Insurance Contract Disputes 98 (1955).
  39. Maurice Goldsborough Mort & Co. Ltd., [1939] AC 452 (PC).
  40. Lowry, P.J. Rawlings & R. Merkin, Insurance Law: Doctrines and Principles 182 (2011).
  41. Vance Forster, 26 GR 341 (UC).
  42. H. Reader, Modern Day Actual Cash Value: Is It What the Insurers Intend? Tort & Insurance Law Journal 282, 294 (1987).
  43. 689 So. 2d 290, 291 (Fla. 3d DCA 1997).
  44. Black’s Law Dictionary 506, 1690 (9th ed. 2009).
  45. Jonathon C. Held & Heidi Hudson Raschke, Defining Indemnity in the Context of Actual Cash Value Calculations 54 (February 2018).
  46. Valuation and Measure of Recovery under Fire Insurance Policies, 49(6) Columbia Law Review 818-836 (1949).
  47. R. Collins, P.W. Rasmussen, S. Beutel & M.M. Doty, The Problem of Underinsurance and How Rising Deductibles will Make it Worse, Issue Brief. New York, NY: The Commonwealth Fund 2297, 2301 (2015).
  48. Dickinson & L. Roberts, Underinsurance on a Portfolio of Property Exposures in an Inflationary Environment, 6(21) The Geneva Papers on Risk and Insurance 3, 19 (1981).
  49. (2009) 7 SCC 777: 2009 3 CPR 272.
  50. (1874) LR 9 CH App 483.
  51. Monroe Southern Mutual Ins. Co., 63 Ga. 669 (1879)
  52. Harnett & J.V. Thornton, Insurable Interest in Property, Ins. LJ 420 (1949).
  53. Fire Insurance Recovery on a Limited Interest in Property, 50(7) Columbia Law Review 960, 970 (November 1950).
  54. Ibid.
  55. 1925 AC 619 (HL).
  56. Waters Monarch Life Assurance Co, 1856 5 E & B 870.
  57. S. Quinn, 74 Subrogation, Restitution, and Indemnity, Texas Law Review 1361 (1960).
  58. Oberai Forwarding Agency New India Assurance Co. Ltd, (2000) 2 SCC 407
  59. (2017) 2 SCC Online Del 87.
  60. Cousins and Co. Ltd. v. D & C Carriers Ltd., (1971) 2 QB 230.
  61. Mark Rowlands Ltd. Berni Inns Ltd., 1985 QB 211.
  62. L Lucas Ltd. Export Credit Guarantee Deptt, (1974) 1 WLR 909.
  63. Phoenix Assurance Co. Spooner, (1905) 2 KB 753 (CA).
  64. Barry, Applying the Contribution Principle, 36(1-2) Metaphilosophy 210, 227 (2005).
  65. [2009] VSCA 124.
  66. HIH Claims Support Ltd v. Insurance Australia Ltd, [2011] HCA 31.
  67. W. Greg, Fire Insurance: Is ‘Double’ Payment Necessarily Overpayment?27(6) Michigan Law Review 683, 686 (1929).
  68. Insurance: Indemnity Policy: Liability for Premiums, 8(6) Michigan Law Review 508, 509 (1910).

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Journal of Banking and Insurance Law

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[if 344 not_equal=””]ISSN: 2582- 6875[/if 344]

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Volume 2
Issue 1
Received March 9, 2023
Accepted March 29, 2019
Published July 17, 2019

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Termination of the Banker-Customer Relationship by Operation of Law

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By [foreach 286]u00a0

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nAbstract

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The determination of whether the banker-customer relationship is in existence at a particular point of time has important legal consequences for both parties to that contractual relationship. As duration is not of the essence of the relationship, even a single transaction can give rise to it. It is therefore important to determine the conditions under which the banker-customer relationship may be terminated. Termination of the banker-customer relationship by operation of law may occur in the following ways, viz, death of the customer, mental incapacity of customer, bankruptcy of the customer, winding up of a company customer, winding up of a bank and outbreak of war. Since a detail examination on this point is unnecessary as far as our topic is concerned, it is avoided from further discussion. for legal purposes, the receiving of deposits by a bank from the public is regarded as a borrowing by the bank. But as a debtor, the bank is not like other commercial debtors; he has certain privileges and is burdened with contractual, statutory and customary obligations. It is with reference to this peculiar legal relationship that the behaviour of the bank in any particular case is scrutinized and any deficiency in service is detected. In this Article, an attempt is made to concentrate on the major decisions relating to the legal remedies available to Banking customers and the endeavour of judiciary to conceptualise the relation between banker and customer.

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Volume :u00a0u00a03 | Issue :u00a0u00a01 | Received :u00a0u00a0March 10, 2020 | Accepted :u00a0u00a0April 10, 2020 | Published :u00a0u00a0June 11, 2020n[if 424 equals=”Regular Issue”][This article belongs to Journal of Banking and Insurance Law(jbil)] [/if 424][if 424 equals=”Special Issue”][This article belongs to Special Issue Termination of the Banker-Customer Relationship by Operation of Law under section in Journal of Banking and Insurance Law(jbil)] [/if 424]
Keywords Agent, Alternative remedies, Bailee, Bailor, Banking customers, Banking ombudsman, Beneficiary, Compensation, Customer, Damages, Deficiency in service, Legal remedies, Principal, Trustee

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  1. Goyle L.C, Law of Banking and Bankers, 1995. Eastern Law House Private Ltd., Calcutta.
  2. Gupta S.N, Banking Law in Theory and Practice, 4th Edn. Universal Law Publishing Co. Pvt. Ltd.,
  3. Gupta S.N. op. cit. preface
  4. Goyle L.C., op.cit. p.3
  5. Section 3 of the N.I. Act
  6. Halsbury’s Laws of England, 4th edn, Vol lll. London, Butterworths, 1973.p.31.
  7. Hart H.L., The Law of Banking, 4th edn. p.1
  8. Johnson’s Dictionary, 1755.
  9. SMA Somasundaram Mudaliyar Vs. District Collector, AIR 1967 AP 126
  10. Irinjalakuda Bank v. Paruthussery Panchayat (1970) 40 comp. Cases 767.
  11. Goyle L.C., op.cit. p.5
  12. Supporting the view expressed by Dr. Hart, the Kerala High Court in Central Bank of India Ltd., Bombay v. Gopinathan Nair and others (AIR. 1979 Kerala 74) observed: “so far as banking transactions are concerned, a customer is one whose money has been accepted on the understanding that the bank will honour transactions up to the amount standing to his credit, irrespective of his connections being of short or of long standing”.
  13. Taxation Commissioners v. English, Scottish and Australian Bank Ltd (1920) A.C. 683
  14. This appears to be the correct and acceptable exposition of law since the ‘Duration theory’ (requiring a course or habit of dealing with the bank) has now been discarded by Courts universally. A wider definition describing the customer as ‘any person having a dealing with a bank’ may be useful for many purposes, but the context of acceptance of deposits, it is obviously irrelevant.
  15. Sec 138(7) (British) Financial Services Management Act. – about the meaning of customers.
  16. (1959) QB 55 at. p. 63.
  17. (1901) AC 414.
  18. Supra n.5
  19. Dr. Hart defines a banker or bank as: “A person or company carrying on the business of receiving money and collecting drafts for customers subject to the obligation of honouring cheques drawn up on them from time to time by the customers to the extent of the amounts available on their current accounts.” Dr. Herbert. L. Hart. ‘The Law of Banking’, 4th Edn. p.1
  20. Regarding the functions of a banker, Sheldon states: “ the principal business of a banker is to receive money from his customers on the understanding that he will refund all moneys received or collected, either on demand or at some definite date agreed upon between him and his customers”. C. B. Drover and R.W.B. Bosley (Ed). Sheldon’s Practice and Law of Banking. 10th Edn., London, Macdonald and Evans Ltd., 1972.p.162
  21. Lord Chorley observes: “the receipt of money on loan and the obligation to repay it on demand against cheques seem to be the basic elements of the business. If a person carries on a business involving such borrowing and the issue of cheques, it is submitted that it is a banking business; if it does not, the business is not legally banking, even though he call himself a banker”. Lord Chorley. ‘Law of Banking’. 6th Edn. London. Sweet and Maxwell. 1974., p.31.
  22. (1848) 2 H.L.C.28.
  23. Hapgood (ed.). Paget’s Law of Banking. 10th edn., London. Butterworths. 1989.
  24. (1966) 2 QB 431
  25. Banking Regulation Act,1949. S.5(b).
  26. Ibid, S.4(A).
  27. Ibid, S.6(1).
  28. AIR .1961. Cal.666.Relying on Bank of Commerce Ltd., v. Kunja Behari Kar. AIR 1944 F.C.2.
  29. Ibid. in this connection, it may be noted that the E.C. approach to banking business is to consider the function of granting credits also, as an equally important and essential ingredients as deposits taking from the public. See. Art. I of both, the 1st and 2nd Banking Directives of the European Community. The Indian Parliament, however, followed the English approach.
  30. C. Cooper v. Union of India. AIR 1970 SC.564
  31. , at.p.590
  32. Robinson V Midland Bank Ltd. (1925) 41 TLR 402
  33. Lord Davey in G.N. Railway V. London & County Bank (1901)
  34. Sheldon’s Practice and Law of Banking 10th edn., London, Macdonald & Evans Ltd. 1972.p.162.
  35. See Supra.n.21.
  36. The Indian Contract Act,1872, s.148.
  37. Halsbury’s Laws of India vol.30 (Banking and Finance).
  38. For eg, when placed in a sealed bag or box.
  39. The beginning of English banking may correctly be attributed to the London goldsmiths during the age of Queen Elizabeth I. They used to receive their customer’s valuables and funds for safe custody and issue receipts acknowledging the same. For sometimes, the deposits were made without interest and the transactions were simple bailments. Later on, the goldsmiths started lending these amounts and for that purpose they started giving interest to their customers instead of charging fees for safeguarding their money, thereby losing the character of bailment for the transactions. To have an historical perspective, see, W.S. Holdsworth.’ The Early History of Banking’, (1918) 34 Law Quarterly Review p. 11; Edward. L. Symons Jr. The Business of Banking in Historical perspective, 51, George Washington Law Review. p. 676; W.S. Holdsworth, ‘The Origins and Early History of Negotiable Instruments’, 31 Law Quarterly Review, p. 12;S.N. Gupta. ‘The Banking Law in Theory and Practice’, 3rd edn. vol. 1. New Delhi, Universal Law Publishing Co.,1999. pp.1-25.
  40. Lord Chorley. Op.cit. p.19.
  41. United Corporation Bank v. Hem Chandra Sarkar (1990) 3 SCC 389.
  42. State of Bombay v. Memon Muhammed Haji Hasan (1967) 3 SCR 938.
  43. Dhuli Chand v. Jawala Prasad and sons AIR 1934 All. 568.
  44. National Bank of Lahore Ltd., v. Sohan Lal Saigal AIR 1962 Pun. 534
  45. Balkrishnan R Dayma v. Bank of Jaipur Ltd., (1971) 41. Com. Cas.55 (Bom)
  46. Bombay Steam Navigation Co. Ltd., v. Vasudev Babu Rao AIR 1928 Bom.5
  47. Vijaya Bank v. United Corporation Bank AIR 1991 (Ker) 209.
  48. Chellappan Pillai v. Canara Bank (1971) 71 Com. cas.584. Cochin Porttrust v. Associated Cotton Traders Ltd., AIR 1983, (Ker) 154Jagadish Chandra Trikha v. Punjab National Bank (2000) 100 Com. cas.839 (Del)
  49. Dena Bank v. Glorphic James (1994) BC 240(Ker) DV.
  50. The Indian Trust Act, 1882, SS.19 &20.
  51. 8 MLT99
  52. (1910) ILR 36 Mad 499 (FB)
  53. AIR 1951 Mad 910
  54. AIR 1962 SC 1003
  55. AIR 1942 Cal 556
  56. Imperial Bank of Canada V Mary Victoria Bagley (1936) 44 LW 128
  57. AIR 1962(Ker) 210
  58. (2008) 8 SCC 92
  59. A breach of fiduciary duty can lead to an injunction, damages, or to the fiduciary having to account for any profits made in addition to the criminal sanctions for breach of trust.
  60. Indian Contract Act 1872 Sec. 212.
  61. Ibid
  62. Punjab National Bank Ltd., v. Dewan Chand AIR 1931 Lah. 302.Punjab National Bank Ltd., v. RBL Benarsi Das and Co. AIR 1960 Punj. 590Bank of India v. Official Liquidator AIR 1950 Bom.376.First National Bank Ltd., v. Industrial Oil Com. AIR 1962. Punj. 170First National Bank Ltd., v. Pioneer Commercial Bank. AIR 1951 Cal.34Indian Bank v. Aluminium Industries Ltd., (1990) CCV 69 Ker 427.Keshari Chand v. Shillong Banking Corporation Ltd., AIR 1965 SC. 1711.
  63. AIR 1958 J&K25
  64. Central Bank of India Ltd., v. Ram Sarup Khanna AIR 1956 Punj. 78.
  65. See, The Indian Contract Act, 1872, SS.211-218.
  66. Lord Chorley. op. cit. p.20.
  67. Ross Cranston, ‘Principles of Banking Law’, Oxford, Clarendon Press, 1997.
  68. Ibid, p.203.
  69. 385 US 99 at p.101 (As quoted in Ross Cranston, Principles of Banking Law’, Oxford, Clarendon Press, 1997.p. 141)
  70. (1921) 3 KB 110: Chorley and Smart, ‘Leading Cases in the Law of Banking’, 3rd edn.. London, Sweet & Maxwell, 1973.p.4.
  71. Lord Chorley, op. cit., p.26
  72. Ibid
  73. Supra n.35
  74. Lord Chorley, op.cit., p.24.
  75. AIR 952 Cal. 193
  76. (1956) 26 Com. Cases 81
  77. Id, 84
  78. AIR 1957 Mad 745
  79. AIR 1978 Cal55
  80. (1963) 2 SCR 297
  81. Supra n.35.
  82. Chartered Bank v Mohammed Hussain AIR 1952 Cal. 193
  83. This principle has been consistently followed in later decisions in England and in India, making it a ‘well-established’ principle.
  84. The Privy Council, in ‘State Aided Bank of Travancore Ltd v. Dhrit Ram’, [(1942) 12 comp. CAs. 80: M.S. Parthasarathy, ‘Banking Law-Leading Indian cases’, 2nd edn. Bombay, N.M. Tripathi, 1985, p.2] established the principle in relation to deposit accounts. In this connection it is to be noted that the principles will have application only in the absence of any contract to the contrary. Basically, the law which governs a contract depends upon the intention of the parties, express or implied. The question of implication arises only in the absence of express terms.
  85. 1915(2) KB 576
  86. AIR 1970 Goa 11
  87. AIR 1970 All 108
  88. (1873) 3 AC 325
  89. 1954 AC 495
  90. AIR 1955 SC 590
  91. The India Limitation Act 1963. Art. 44.
  92. Ibid.
  93. For eg., a banker who wrongly judges the relationship to be at an end and fails to honour a customer’s cheques is exposed to the possibility of substantial damages and sometimes, even for defamation.
  94. Commissioner of Taxation v. English, m Scottish and Australian Bank Ltd.,(1920) AC 683. See further, Central Bank of Idia Ltd. Bombay v. Gopinathan Nair and others, AIR 1979 Kerala74.

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Editors Overview

jbil maintains an Editorial Board of practicing researchers from around the world, to ensure manuscripts are handled by editors who are experts in the field of study.

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    N. Krishna Kumar

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  1. Associate Professor,Government Law College,Kerala,India

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Abstract

nThe determination of whether the banker-customer relationship is in existence at a particular point of time has important legal consequences for both parties to that contractual relationship. As duration is not of the essence of the relationship, even a single transaction can give rise to it. It is therefore important to determine the conditions under which the banker-customer relationship may be terminated. Termination of the banker-customer relationship by operation of law may occur in the following ways, viz, death of the customer, mental incapacity of customer, bankruptcy of the customer, winding up of a company customer, winding up of a bank and outbreak of war. Since a detail examination on this point is unnecessary as far as our topic is concerned, it is avoided from further discussion. for legal purposes, the receiving of deposits by a bank from the public is regarded as a borrowing by the bank. But as a debtor, the bank is not like other commercial debtors; he has certain privileges and is burdened with contractual, statutory and customary obligations. It is with reference to this peculiar legal relationship that the behaviour of the bank in any particular case is scrutinized and any deficiency in service is detected. In this Article, an attempt is made to concentrate on the major decisions relating to the legal remedies available to Banking customers and the endeavour of judiciary to conceptualise the relation between banker and customer.n

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Keywords: Agent, Alternative remedies, Bailee, Bailor, Banking customers, Banking ombudsman, Beneficiary, Compensation, Customer, Damages, Deficiency in service, Legal remedies, Principal, Trustee

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  1. Goyle L.C, Law of Banking and Bankers, 1995. Eastern Law House Private Ltd., Calcutta.
  2. Gupta S.N, Banking Law in Theory and Practice, 4th Edn. Universal Law Publishing Co. Pvt. Ltd.,
  3. Gupta S.N. op. cit. preface
  4. Goyle L.C., op.cit. p.3
  5. Section 3 of the N.I. Act
  6. Halsbury’s Laws of England, 4th edn, Vol lll. London, Butterworths, 1973.p.31.
  7. Hart H.L., The Law of Banking, 4th edn. p.1
  8. Johnson’s Dictionary, 1755.
  9. SMA Somasundaram Mudaliyar Vs. District Collector, AIR 1967 AP 126
  10. Irinjalakuda Bank v. Paruthussery Panchayat (1970) 40 comp. Cases 767.
  11. Goyle L.C., op.cit. p.5
  12. Supporting the view expressed by Dr. Hart, the Kerala High Court in Central Bank of India Ltd., Bombay v. Gopinathan Nair and others (AIR. 1979 Kerala 74) observed: “so far as banking transactions are concerned, a customer is one whose money has been accepted on the understanding that the bank will honour transactions up to the amount standing to his credit, irrespective of his connections being of short or of long standing”.
  13. Taxation Commissioners v. English, Scottish and Australian Bank Ltd (1920) A.C. 683
  14. This appears to be the correct and acceptable exposition of law since the ‘Duration theory’ (requiring a course or habit of dealing with the bank) has now been discarded by Courts universally. A wider definition describing the customer as ‘any person having a dealing with a bank’ may be useful for many purposes, but the context of acceptance of deposits, it is obviously irrelevant.
  15. Sec 138(7) (British) Financial Services Management Act. – about the meaning of customers.
  16. (1959) QB 55 at. p. 63.
  17. (1901) AC 414.
  18. Supra n.5
  19. Dr. Hart defines a banker or bank as: “A person or company carrying on the business of receiving money and collecting drafts for customers subject to the obligation of honouring cheques drawn up on them from time to time by the customers to the extent of the amounts available on their current accounts.” Dr. Herbert. L. Hart. ‘The Law of Banking’, 4th Edn. p.1
  20. Regarding the functions of a banker, Sheldon states: “ the principal business of a banker is to receive money from his customers on the understanding that he will refund all moneys received or collected, either on demand or at some definite date agreed upon between him and his customers”. C. B. Drover and R.W.B. Bosley (Ed). Sheldon’s Practice and Law of Banking. 10th Edn., London, Macdonald and Evans Ltd., 1972.p.162
  21. Lord Chorley observes: “the receipt of money on loan and the obligation to repay it on demand against cheques seem to be the basic elements of the business. If a person carries on a business involving such borrowing and the issue of cheques, it is submitted that it is a banking business; if it does not, the business is not legally banking, even though he call himself a banker”. Lord Chorley. ‘Law of Banking’. 6th Edn. London. Sweet and Maxwell. 1974., p.31.
  22. (1848) 2 H.L.C.28.
  23. Hapgood (ed.). Paget’s Law of Banking. 10th edn., London. Butterworths. 1989.
  24. (1966) 2 QB 431
  25. Banking Regulation Act,1949. S.5(b).
  26. Ibid, S.4(A).
  27. Ibid, S.6(1).
  28. AIR .1961. Cal.666.Relying on Bank of Commerce Ltd., v. Kunja Behari Kar. AIR 1944 F.C.2.
  29. Ibid. in this connection, it may be noted that the E.C. approach to banking business is to consider the function of granting credits also, as an equally important and essential ingredients as deposits taking from the public. See. Art. I of both, the 1st and 2nd Banking Directives of the European Community. The Indian Parliament, however, followed the English approach.
  30. C. Cooper v. Union of India. AIR 1970 SC.564
  31. , at.p.590
  32. Robinson V Midland Bank Ltd. (1925) 41 TLR 402
  33. Lord Davey in G.N. Railway V. London & County Bank (1901)
  34. Sheldon’s Practice and Law of Banking 10th edn., London, Macdonald & Evans Ltd. 1972.p.162.
  35. See Supra.n.21.
  36. The Indian Contract Act,1872, s.148.
  37. Halsbury’s Laws of India vol.30 (Banking and Finance).
  38. For eg, when placed in a sealed bag or box.
  39. The beginning of English banking may correctly be attributed to the London goldsmiths during the age of Queen Elizabeth I. They used to receive their customer’s valuables and funds for safe custody and issue receipts acknowledging the same. For sometimes, the deposits were made without interest and the transactions were simple bailments. Later on, the goldsmiths started lending these amounts and for that purpose they started giving interest to their customers instead of charging fees for safeguarding their money, thereby losing the character of bailment for the transactions. To have an historical perspective, see, W.S. Holdsworth.’ The Early History of Banking’, (1918) 34 Law Quarterly Review p. 11; Edward. L. Symons Jr. The Business of Banking in Historical perspective, 51, George Washington Law Review. p. 676; W.S. Holdsworth, ‘The Origins and Early History of Negotiable Instruments’, 31 Law Quarterly Review, p. 12;S.N. Gupta. ‘The Banking Law in Theory and Practice’, 3rd edn. vol. 1. New Delhi, Universal Law Publishing Co.,1999. pp.1-25.
  40. Lord Chorley. Op.cit. p.19.
  41. United Corporation Bank v. Hem Chandra Sarkar (1990) 3 SCC 389.
  42. State of Bombay v. Memon Muhammed Haji Hasan (1967) 3 SCR 938.
  43. Dhuli Chand v. Jawala Prasad and sons AIR 1934 All. 568.
  44. National Bank of Lahore Ltd., v. Sohan Lal Saigal AIR 1962 Pun. 534
  45. Balkrishnan R Dayma v. Bank of Jaipur Ltd., (1971) 41. Com. Cas.55 (Bom)
  46. Bombay Steam Navigation Co. Ltd., v. Vasudev Babu Rao AIR 1928 Bom.5
  47. Vijaya Bank v. United Corporation Bank AIR 1991 (Ker) 209.
  48. Chellappan Pillai v. Canara Bank (1971) 71 Com. cas.584. Cochin Porttrust v. Associated Cotton Traders Ltd., AIR 1983, (Ker) 154Jagadish Chandra Trikha v. Punjab National Bank (2000) 100 Com. cas.839 (Del)
  49. Dena Bank v. Glorphic James (1994) BC 240(Ker) DV.
  50. The Indian Trust Act, 1882, SS.19 &20.
  51. 8 MLT99
  52. (1910) ILR 36 Mad 499 (FB)
  53. AIR 1951 Mad 910
  54. AIR 1962 SC 1003
  55. AIR 1942 Cal 556
  56. Imperial Bank of Canada V Mary Victoria Bagley (1936) 44 LW 128
  57. AIR 1962(Ker) 210
  58. (2008) 8 SCC 92
  59. A breach of fiduciary duty can lead to an injunction, damages, or to the fiduciary having to account for any profits made in addition to the criminal sanctions for breach of trust.
  60. Indian Contract Act 1872 Sec. 212.
  61. Ibid
  62. Punjab National Bank Ltd., v. Dewan Chand AIR 1931 Lah. 302.Punjab National Bank Ltd., v. RBL Benarsi Das and Co. AIR 1960 Punj. 590Bank of India v. Official Liquidator AIR 1950 Bom.376.First National Bank Ltd., v. Industrial Oil Com. AIR 1962. Punj. 170First National Bank Ltd., v. Pioneer Commercial Bank. AIR 1951 Cal.34Indian Bank v. Aluminium Industries Ltd., (1990) CCV 69 Ker 427.Keshari Chand v. Shillong Banking Corporation Ltd., AIR 1965 SC. 1711.
  63. AIR 1958 J&K25
  64. Central Bank of India Ltd., v. Ram Sarup Khanna AIR 1956 Punj. 78.
  65. See, The Indian Contract Act, 1872, SS.211-218.
  66. Lord Chorley. op. cit. p.20.
  67. Ross Cranston, ‘Principles of Banking Law’, Oxford, Clarendon Press, 1997.
  68. Ibid, p.203.
  69. 385 US 99 at p.101 (As quoted in Ross Cranston, Principles of Banking Law’, Oxford, Clarendon Press, 1997.p. 141)
  70. (1921) 3 KB 110: Chorley and Smart, ‘Leading Cases in the Law of Banking’, 3rd edn.. London, Sweet & Maxwell, 1973.p.4.
  71. Lord Chorley, op. cit., p.26
  72. Ibid
  73. Supra n.35
  74. Lord Chorley, op.cit., p.24.
  75. AIR 952 Cal. 193
  76. (1956) 26 Com. Cases 81
  77. Id, 84
  78. AIR 1957 Mad 745
  79. AIR 1978 Cal55
  80. (1963) 2 SCR 297
  81. Supra n.35.
  82. Chartered Bank v Mohammed Hussain AIR 1952 Cal. 193
  83. This principle has been consistently followed in later decisions in England and in India, making it a ‘well-established’ principle.
  84. The Privy Council, in ‘State Aided Bank of Travancore Ltd v. Dhrit Ram’, [(1942) 12 comp. CAs. 80: M.S. Parthasarathy, ‘Banking Law-Leading Indian cases’, 2nd edn. Bombay, N.M. Tripathi, 1985, p.2] established the principle in relation to deposit accounts. In this connection it is to be noted that the principles will have application only in the absence of any contract to the contrary. Basically, the law which governs a contract depends upon the intention of the parties, express or implied. The question of implication arises only in the absence of express terms.
  85. 1915(2) KB 576
  86. AIR 1970 Goa 11
  87. AIR 1970 All 108
  88. (1873) 3 AC 325
  89. 1954 AC 495
  90. AIR 1955 SC 590
  91. The India Limitation Act 1963. Art. 44.
  92. Ibid.
  93. For eg., a banker who wrongly judges the relationship to be at an end and fails to honour a customer’s cheques is exposed to the possibility of substantial damages and sometimes, even for defamation.
  94. Commissioner of Taxation v. English, m Scottish and Australian Bank Ltd.,(1920) AC 683. See further, Central Bank of Idia Ltd. Bombay v. Gopinathan Nair and others, AIR 1979 Kerala74.

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Regular Issue Open Access Article

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Journal of Banking and Insurance Law

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[if 344 not_equal=””]ISSN: 2582- 6875[/if 344]

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Volume 3
Issue 1
Received March 10, 2020
Accepted April 10, 2020
Published June 11, 2020

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Views: 1,439

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Read More
JBIL

Bank’s Duty of Confidentiality under Cameroonian Law: Absolute or Qualified?

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Year : June 11, 2020 | Volume : 03 | Issue : 01 | Page : 8-19<\/div>\n