Pass Book


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Pass Book

  1. 1. PASS BOOK <ul><li>A pass book is a booklet wherein a banker records his customer’s account as it appears in his ledger. </li></ul>
  2. 2. <ul><li>A pass book is maintained in the form of a ledger account with debit entries on the left hand side and credit entries on the right hand side. </li></ul><ul><li>All the amounts deposited by a customer are credited and the cheques paid by banks against his account are debited. </li></ul>
  3. 4. Is pass book is an authentic record? <ul><li>According to Sir John Paget </li></ul><ul><li>“The proper function of pass book is to constitute a conclusive and unquestionable record of transactions between the banker and customer and it should be recognised as such” </li></ul>
  4. 5. <ul><li>THE SITUATION IN AMERICA </li></ul><ul><li>THE POSITION IN INDIA </li></ul><ul><ul><ul><li>Correct Entry </li></ul></ul></ul><ul><ul><ul><li>Wrong Entry </li></ul></ul></ul><ul><ul><ul><ul><ul><li>Entries Favourable to the customer </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Entries Favourable to the Banker </li></ul></ul></ul></ul></ul>
  5. 6. Entries Favourable to the Customer <ul><li>Can a customer rely upon a wrong entry favourable to him? </li></ul><ul><li>CASE LAW </li></ul><ul><li>“ SKYRING VS GREENWOOD” </li></ul><ul><li>“ UNITED OVERSEAS BANK VS JIWANI A/C” </li></ul><ul><li>“ HOLAND VS MANCHESTER LIVER POOL DISTRICT BANKING COMPANY” </li></ul>
  6. 7. <ul><li>The wrong entry favourable to a customer constitutes a settlement of account only when. </li></ul><ul><li>The customer believes that it is true, </li></ul><ul><li>The customer draws a cheque in good faith and in complete reliance on the larger credit balance </li></ul><ul><li>The wrong entry is communicated to the customer </li></ul><ul><li>In any case a customer can not rely upon the fictitious entry made in pass book by a bank employee. </li></ul>
  7. 8. ENTRIES FAVOURABLE TO THE BANKER <ul><li>Can a banker rely upon a wrong entry favourable to him? </li></ul><ul><li>CASE LAW </li></ul><ul><li>“VAGLIANO BROTHERS VS BANK OF ENGLAND” </li></ul>
  8. 9. <ul><li>Longer the duration, lesser the chances of rectifying a mistake in a pass book </li></ul><ul><li>A pass book belongs to a banker </li></ul><ul><li>There is a statutory duty on the part of a customer to examine his pass book in india. </li></ul><ul><li>If a customer takes up the duty of examining his pass book, it operates against him in case he is careless. </li></ul>
  9. 10. <ul><li>A wrong entry in a pass book favourable to a customer constitutes a settlement of account provided: </li></ul><ul><li>The customer acts upon it immediately. </li></ul><ul><li>The customer acts upon it in good faith and without negligence </li></ul><ul><li>The customer has altered his position by relying upon it </li></ul><ul><li>(b) and (c) together but not (a) </li></ul>
  10. 11. <ul><li>2. The following one does not constitute a settlement of account as far as a pass book is concerned </li></ul><ul><li>A wrong entry favourable to a customer </li></ul><ul><li>A wrong entry favourable to a banker </li></ul><ul><li>A fictitious entry </li></ul><ul><li>(a) and (b) together. </li></ul>