Special Relationship Between Bankers and Customers
The special relationship between bankers and customers takes the form of rights which the bankers can exercise and the obligations which he owes to his customers. these rights and obligation are discussed below:-
A) Rights of Bankers :- the bankers enjoys several rights while dealing with customers. these rights are as follows-
1) right to Lien:- bankers has the right of general lien in respect of the amount due to him by customer.
lien is a right of a person to retain that which is in his possession and which belongs to another, until the demands of the person in possession are satisfied. lien gives to a person only a right to retain the possession of the goods and not the power to sell unless such a right is expressly conferred by the statue(e.g. unpaid seller) or by custom or usage.
there are two kinds of Lien:-
a) Particular Lien:- it's attached to some specific goods. it is a right to retain possession over particular goods in connection with which the debt arose. it is restricted to those goods which are the subject matter of the contract and are liable for certain demands of the person in possession of those goods.
b) General Lien:- it entitles a person to retain possession of goods belonging to another for a general balance of account. it will entitle a person in possession of goods to retain them until all claims of account of the person in possession against the owners of goods are satisfied.
2) Right Of Set Off :- under general law is statutory Right of a debtor to set-off any amount due to him from the creditor in order to arrive at the net amount due from him to the creditor. this right is available only if both the amounts are certain, actually due between the same persons and if there is no agreement between them contrary to the right to st-off. in the other words, the mutual claims of a debtor and creditor are adjusted together and only the remainder amount is payable by the debtor.
it arises in the following cases :-
B) Obligation of Bankers :- bankers are under the obligations fulfill certain duties while dealing with customers. such obligations are:The special relationship between bankers and customers takes the form of rights which the bankers can exercise and the obligations which he owes to his customers. these rights and obligation are discussed below:-
1) right to Lien:- bankers has the right of general lien in respect of the amount due to him by customer.
lien is a right of a person to retain that which is in his possession and which belongs to another, until the demands of the person in possession are satisfied. lien gives to a person only a right to retain the possession of the goods and not the power to sell unless such a right is expressly conferred by the statue(e.g. unpaid seller) or by custom or usage.
there are two kinds of Lien:-
a) Particular Lien:- it's attached to some specific goods. it is a right to retain possession over particular goods in connection with which the debt arose. it is restricted to those goods which are the subject matter of the contract and are liable for certain demands of the person in possession of those goods.
b) General Lien:- it entitles a person to retain possession of goods belonging to another for a general balance of account. it will entitle a person in possession of goods to retain them until all claims of account of the person in possession against the owners of goods are satisfied.
2) Right Of Set Off :- under general law is statutory Right of a debtor to set-off any amount due to him from the creditor in order to arrive at the net amount due from him to the creditor. this right is available only if both the amounts are certain, actually due between the same persons and if there is no agreement between them contrary to the right to st-off. in the other words, the mutual claims of a debtor and creditor are adjusted together and only the remainder amount is payable by the debtor.
it arises in the following cases :-
- on the death, insolvency or insanity of customer.
- on the insolvency of a partner .
- on the winding up a company.
- on receipt of garnishee order.
1) Obligation to honor customer's cheques:- when a person opens an account with the banker, the latter undertakes to honour the cheques drawn by his customer so long as the fund belonging to him are sufficient and available for this purpose.
2) Obligation to Maintain Secrecy :-the banker is bound by duty of secrecy regarding his dealings with his customers. This duty is contractual in nature and is one of the implied terms on which banker -customer relationship is built.
by secrecy is meant that the account book of the bank will not be thrown open to the public or government official and the banker will take all necessary precautions for ensuring that the state of affairs of customer's account is not made known to others by any means.
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