Vikramajit Sen, J.
1. This Petition presents an interesting question of law in novel circumstances. The Respondent Company maintains a Current Account with the Petitioner Bank. The Petitioner's case is that it had honoured a Cheque drawn by the Respondent Company in the sum of Rs. 2,11,94,000/- without there being corresponding funds in the Current Account maintained between the parties. It is not in dispute that Overdraft limits and/or Loan facilities had not been granted to the Respondent Company. Nevertheless, admittedly by mistake, the Cheque for the afore-mentioned sum of Rs. 2,11,94,000/- was cleared without sufficient funds being available, and payments had been released to M/s. Charu Trading. A Statutory Notice was issued to the Respondent Company in reply to which the above narrated circumstances were highlighted. The Respondent Company has denied its liability for making any payment to the Petitioner.
2. The Learned Counsel relies on Bank of Maharashtra v. United Construction Co. and Ors., : AIR1985Bom432 , in which a Division Bench of the High Court of Mumbai had observed that if an account holder, even without any express grant of overdraft facility overdraws on his account the transaction amounts to a loan. The following passage had been relied upon:
'As to the question whether there was any agreement to grant over-draft facility it might be useful to note that in Halsbury's Law of England, (Fourth Edition) Vol. 3, at page 155, it has been stated as follows:
'A consumer may borrow from a banker by way of loan or by way of overdraft. A loan is a matter of special agreement. In the absence of agreement, express or implied from a course of business, a banker is not bound to allow his customer to over-draft. An agreement for an overdraft must be supported by good consideration, and it may be express or implied.
Drawing a cheque or accepting a bill payable at the banker's where there are no funds sufficient to meet it amounts to a request for an overdraft.'
In Cuthbort v. Robart, Lubbock & Co.; (1909) 2 Ch.D. 226, Cozens-Hardy M.R. (at Page 233 of the report) has observed as follows:
'....If a customer draws a cheque for a sum in excess off the amount standing to the credit of his current account, it is really a request for a loan, and if the cheque is honoured the customer has borrowed money'. Further observations go on to show that it was held that such borrowing would be simple transaction of borrowing and would not amount to borrowing upon security. But we are not concerned with that question here. Paget in his classic treatise on Law of Banking (1972 Edition) at page 132 has observed as follows:
'A banker is not obliged to let his customer overdraw unless he has agreed to do so or such agreement can be inferred from course of business; borrowing and lending are a matter of contract not necessarily premeditated but possibly, spontaneous, as where a customer, without previous arrangement, draws a cheque, payment of which overdraws his account.'
Unfortunately, the aforesaid decision and the aforesaid books were not shown to the learned trial judge. if the legal position set out in the same is taken into account there is no doubt that where a customer, namely an account holder in bank, even without any express grant of an over-draft facility overdraws on his account and the cheque issued by him is honoured, the transaction amounts to a loan an the customer is bound to make good the loan to the bank with reasonable interest. As far as Mr. Sayed, learned counsel for the respondents, is concerned, he did not point out any decision or text-book where a view contrary to the above has been propounded. He merely stated that he supported the decision of the trial Court and had nothing more to say.'
3. To butters the above observation, the Learned Counsel has also relied on the treatise titled 'The Banking Law in Theory and Practice' by S.N. Gupta and in particular the following passage:
'It is, thus, clear that whenever a customer having a current account in a bank, even without any arrangement, overdraws his account and even without sufficient funds in the account his cheques are honoured by the bank, an overdraft is created which is in the nature of a loan and the customer is bound to make good the loan with a reasonable rate of interest. As regards the rate of interest, one has to decide by looking to all the facts and circumstances of the case and usually it is the rate of interest charged by the bank for such loan that shall be applicable. In this particular case the judges were of the view that the only reasonable rate of interest which should be granted in a case like this was twelve per cent. This is however subject to the condition that in a case where the cheques have been honoured by the banks without there being any funds in the account, the customer does not dispute the correctness of the entries in the ledger. In case the said entries are challenged by the customer on a plea that here has been fraud or that the signatures of the customer are forged then the mater shall become difficult and other tools of analysis shall be required to settle the dispute.'
4. It is trite to state that winding-up proceedings partake of summary nature and an admitted debt must be shown to be in existence for the petition to be entertained. Where a dishonest defense is presented, which is in the nature of moonshine, the Company Court would be empowered to proceed with the Petition even in the absence of an admitted debt.
5. The observations of the Hon'ble Division Bench were made in the context of a civil suit and not of a winding-up petition. Myriad defenses could be available to the Respondent Company in ordinary civil proceedings for recovery, which would be severely hampered if the present petition is continued. I am also not certain that an accidental and mistaken clearance of a cheque in a current account where no overdraft or loan facilities have been allowed, could nonetheless be treated as such. Such a transactions would be sans considerations and hence fall in the genre of unenforceable contracts. In a regular suit, the Petitioner may succeed in proving the presence of consideration, directly or indirectly.
6. In these circumstances, the present petition cannot be entertained. The Petitioner has, however, other remedies which may be availed of.
Dismissed.