KESHARICHAND JAISUKHAL vs THE SHILLONG BANKING CORPORATION

The Supreme Court held that the relationship between a banker and customer is governed by the principles of agency, where the banker must act according to the customer's directions and prevailing banking usages. The Court found that the respondent bank did not act negligently or breach its duty as a collecting agent when it accepted a cheque on another bank without prior consultation. The claim for Rs. 8,800 was not barred by limitation as the appellant ratified the bank's actions, and the appeal was dismissed, upholding the High Court's decree in favor of the bank.