Q3. Certain goods of A were bailed with B. B omitted to lock up the goods bailed while he has taken care to lockup similar goods of his own. Who is liable to whom?(bailee meaning- 3 marks; duties of bailee -7marks) 10 marksAnswer : I
t is the duty of bailee to take care the goods . He is liable to bailer.
A person with whom some article is left, usually pursuant to a contract (called a "contract of bailment"), who isresponsible for the safe return of the article to the owner when the contract is fulfilled. These can include banksholding bonds, storage companies where furniture or files are deposited, a parking garage, or a kennel or horseranch where an animal is boarded. Leaving goods in a sealed rented box like a safe deposit box, is not a bailment,and the holder is not a bailee since he cannot handle or control the goods. His duties are to act in good faith he isbound to use extraordinary diligence in those contracts or bailments, where he alone receives the benefit, as inloans; he must observe ordinary diligence of those bailments, which are beneficial to both parties, as hiring; and hewill be responsible for gross negligence in those bailments which are only for the benefit of the bailor, is depositand mandate.
Duties of bailee :1. To take reasonable care of the goods bailed:
It is the duty of the bailee to take reasonable care of the goods bailed as a man of ordinary prudence would, undersimilar circumstance, take care of his own goods of the same bulk, quality and value as the goods bailed.
Q4. Clayton’s case is considered to b
e one of the most essential legal decisions in banking laws that establishedthe principle of the order of application of credits against debits, in running accounts like overdraft. Explain
Clayton’s case. ( explanation of Clayton’s case
- 7 marks; usage -3 marks) 10 marksAnswer : Explanation of Clayton's case :Definition :
UK's 1816 case (Devaynes v. Noble) which set the precedent that funds withdrawn from an account are presumedto be debits from the funds deposited first-the first-in, first-out (FIFO) principle. This ruling, however, is notapplicable to trustees who are presumed to draw their own money from mixed bank-accounts and not the trustmoney, no matter when it was deposited.
"This is the case of a banking account where all the sums paid in form one blended fund, the parts of which have nolonger any distinctive existence. Neither banker nor customer ever thinks of saying, this draft is to be placed to theaccount of the £500 paid in on Monday, and this other to the account of the £500 paid in on Tuesday. There is afund of £1 ,000 tc draw upon, and that is enough.
Q5. Write about constitutional validity of the DRT Act.( explain the DRT act-3 marks; explanation of constitutional validity DRT Act- 7 marks) 10 marksAnswer : DRT Act :
The Debts Recovery Tribunal have been constituted under Section 3 of the Recovery of Debts Due to Banks andFinancial Institutions Act, 1993. The original aim of the Debts Recovery Tribunal was to receive claim applicationsfrom Banks and Financial Institutions against their defaulting borrowers. For this the Debts Recovery Tribunal(Procedure) Rules 1993 were also drafted.
Constitutional validity of the DRT Act :
1. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (the Act) is almost a decade old. As withany legislation breaking new floor, the Act may be challenged in numerous forum such as the High Courts for itssummary nature, the ousting of the jurisdiction from the Civil Courts, the provisions which enable borrowers tomove forward versus the financial institution or financial institution within the Debt Recovery Tribunals (DRT) andnot surprisingly the latest problem towards the constitutional validity from the Act. Whatever may perhaps be, theAct of 1993 was a welcome phase taken through the legislature in ensuring speedy recovery of financial institutiondues.
“Cooperative principles” means the cooperative principles specified in the First Schedule of the Multi
-StateCo-operatives Act, 2002. Explain cooperative principles.