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PAPER-5
BANKING LAW INCLUDING
NEGOTIABLE
nd
INSTRUMENTS
st
ACT
( 2 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 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 : Definition of Banker – customer the General relation
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 – Discounting Bills – Participation
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.