General Lien does NOT apply when goods/securities are entrusted for a specific purpose (like safe custody or selling shares). In such cases, the banker acts as a Bailee/Trustee, and the specific purpose overrides the general right of lien.

In safe custody, the goods are entrusted to the bank for a specific purpose (safety) to be returned later. The customer is the Bailor (owner), and the bank is the Bailee (custodian). This differs from a Locker where the bank is a Lessor.

Normally, a bank collecting a cheque is an Agent. However, if the money is collected and held specifically *in trust* for a specific purpose (like investment) and not just credited to the general account, the relationship shifts to Trustee-Beneficiary.

A Garnishee Order suspends the operation of the account (freezes it) but does not terminate the relationship. The account can become active again if the order is revoked or satisfied. Death, closure, or insanity typically end the active contract.

Clayton's Rule states that in a running account, the first debit is discharged by the first credit (FIFO - First In, First Out), unless there is a contrary intention. This is vital for determining liability in overdrafts when guarantees are revoked.

The revised guidelines (2021) state that in case of incidents like fire, theft, burglary, or building collapse attributable to the bank's deficiency, the liability shall be 100 times the prevailing annual rent of the locker.

If the debtor doesn't intimate, the creditor has the discretion to appropriate the payment to any lawful debt actually due, even if it is barred by the law of limitation.

Unless there is a specific survivorship mandate (like Either or Survivor), a simple "Jointly" operated account implies joint ownership. Upon death, the contract ends, and the balance is payable jointly to the Survivor (B) and the Legal Heirs of A.

Clayton's Rule (First-In-First-Out for appropriation) implies that subsequent credits into a running account discharge the earliest debits. If a guarantee is revoked or a partner dies (terminating liability), the bank must break the account (stop operations) immediately. If they continue the account, new credits will pay off the old "guaranteed" debt, while new debits will create a new "unsecured" debt, leaving the bank exposed.

Under Article 22 of the Limitation Act, 1963, the period is 3 years. Crucially, time starts running NOT from the deposit date, but from the date the customer makes a demand for payment and the bank refuses it. Until a demand is made, the limitation does not expire.

Bailment involves the delivery of goods from one person to another for a specific purpose. In Safe Custody, the customer delivers the goods to the bank. In a Locker, there is no delivery of goods (the customer retains control), so it is Lease, not Bailment. FD is a debt.

Clayton's Rule applies specifically to running accounts (like Cash Credit, Overdraft) where debits and credits are continuous. In a Term Loan, the account is not a running account; payments are appropriated towards interest first and then principal, not based on FIFO of debits.

Since the money was entrusted for a specific purpose, the bank holds it as a Trustee. In liquidation, trust money does not form part of the bank's general assets, so the customer has a preferential claim over general creditors.

Under Section 184 of the Contract Act, a minor can be an agent between the principal and third parties. The minor is not personally liable, but their acts bind the Principal. Banks usually discourage this due to risk.

In a Simple Mortgage (Section 58(b) of Transfer of Property Act), the mortgagor binds himself personally to pay the debt but does NOT deliver possession of the property to the mortgagee.

Where neither party appropriates, the law applies the payment to discharge debts in chronological order (oldest first), irrespective of whether they are time-barred or not.

Every deposit (credit) by the borrower or debit (withdrawal) acts as an acknowledgment of the continuing relationship, resetting the limitation clock. Thus, it is 3 years from the last operation.