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WnC IS A CUS1CMLk

Slr !ohn ageL says to coostltote o costomet tbete most be some tecoqolzoble
cootse ot boblt of Jeolloq lo tbe ootote of teqolot bookloq bosloess tbot oo
lsoloteJ ttoosoctloo of tbot ootote ot setles of ttoosoctloos oot commooly
ossocloteJ wltb bookloq ls oot sofflcleot 1hls vlew submlLs LhaL Lo consLlLuLe a
cusLomer of a bank a person has Lo saLlsfy Lwo condlLlons llrsLly Lhere has Lo be
some recognlzable course or hablL of deallng beLween hlm and Lhe bank and
secondly Lhe LransacLlons should be ln Lhe naLure of regular banklng buslness

lL was held ln MaLhews v Wllllams 8rown Co (1894) LhaL ln order Lo make a
person a cusLomer of a bank he should have some sorL of an accounL wlLh Lhe
bank buL LhaL Lhe lnlLlal LransacLlon ln openlng an accounL does noL seLup Lhe
relaLlonshlp of a banker and a cusLomer unless Lhere ls some measure of
conLlnulLy and cusLom

ln Ladbroke v 1odd (1914) Mr !usLlce 8allhache observed 1be telotloo of
booket ooJ costomet beqlos os sooo os tbe fltst cbepoe ls polJ lo ooJ occepteJ fot
collectloo ooJ oot metely wbeo lt ls polJ A petsoo becomes o costomet of o book
wbeo be qoes to tbe book wltb mooey ot o cbepoe ooJ osks to bove oo occooot
opeoeJ lo bls oome ooJ tbe book occepts tbe mooey ot cbepoe ooJ ls ptepoteJ to
opeo oo occooot lo tbe oome of tbot petsoo oftet tbot be ls eotltleJ to be colleJ o
costomet of tbe book 1hls ls supporLed by Lord uunedln ln Commlssloner of
1axaLlon v Lngllsh ScoLLlsh and AusLrallan 8ank (1920) 1be wotJ costomet
slqolfles o telotloosblp lo wblcb tbe Jototloo ls oot of tbe esseoce A petsoo
wbose mooey bos beeo occepteJ by tbe book oo tbe footloq tbot tbe book
ooJettokes to boooot cbepoes opto tbe omooot stooJloq to bls cteJlt ls lo tbe
vlew of tbelt lotJsblps o costomet of tbe book lo tbe seose of tbe stotote
lttespectlve of wbetbet bls coooectloo ls of looq ot sbott stooJloq

ln CenLral 8ank of lndla LLd v CoplnaLhan nalr (1970) Lhe kerala Plgh CourL
observed LhaL Lhe Lerm cusLomer ls noL deflned ln Lhe negoLlable lnsLrumenLs
AcL lL observed A costomet ls o petsoo wbo bos tbe boblt of tesottloq to tbe
some ploce ot petsoo to Jo tbe bosloess 5o fot os bookloq ttoosoctloos ote
coocetoeJ be ls o petsoo wbose mooey bos beeo occepteJ oo tbe footloq tbot tbe
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booket wlll boooot opto tbe omooot stooJloq to bls cteJlt lttespectlve of bls
coooectloo beloq of sbott ot looq stooJloq

lL was held ln Savory Co v Lloyds 8ank Ld (1932) LhaL a slngle LransacLlon may
consLlLuLe a cusLomer ln Lhls case Lhe plalnLlffs were a flrm of sLock brokers 1he
flrm had Lwo clerks Mr erklns and Mr SmlLh 1he flrm senL ouL a number of
cheques drawn on Lhelr bankers Lhe Mldland 8ank LLd and made payable Lo
named payees or bearer 1hese cheques were handed over Lo Mr erklns or Mr
SmlLh for posLlng lnsLead of posLlng Lhem as lnsLrucLed Lhey sLole Lhe cheques
1hey Look Lhese Lo Lhe London branch of Lloyds 8ank and pald Lhem ln wlLh
lnsLrucLlons LhaL ln Lhe case of
O Mr erklns LhaL Lhey be credlLed Lo hls accounL aL Lhe Lloyds 8ranch accounL
aL WalklngLon
O Mr SmlLh Lo an accounL ln Lhe name of hls wlfe aL Lhe 8ed hlll branch of
Lloyds 8ank

1he flrsL of Lhese cheques was recelved before Mr SmlLh became a cusLomer 1he
flrm sued Lo recover Lhe amounL of Lhese cheques on Lhe ground of converslon lL
was held LhaL Lhough SmlLh and erklns had had only one LransacLlon Lhey were
cusLomers of Lloyds 8ank as a slngle LransacLlon may consLlLuLe a cusLomer
relaLlonshlp





1he frequency of LransacLlon ls noL essenLlal Lo consLlLuLe a cusLomer Pls
poslLlon musL be such LhaL LransacLlons are llkely or could be frequenL

lL ls necessary LhaL Lhe deallng musL be of a banklng naLure 1hls ls ln conLra
dlsLlncLlon Lo Lhe casual servlces rendered by a banker Lo persons who have noL
opened an accounL wlLh hlm 1he [udgemenL of Lhe !udlclal CommlLLee of Lhe
rlvy Councll ln Commlssloner of 1axaLlon v Lngllsh ScoLLlsh and AusLrallan 8ank
sLaLes "tbe coottost ls oot betweeo oo boblto ooJ o oewcomet bot betweeo o
petsoo fot wbom tbe book petfotms o cosool setvlce eq cosbloq o cbepoe fot o
petsoo lottoJoceJ by ooe of tbelt costomets ooJ o petsoo wbo bos oo occooot of
bls owo ot tbe book