Kapur, J.:— This is an appeal against a decision of Harnam Singh, J. holding that the petitioners were not preferential creditors of the bank.
2. The petitioner firm on 2nd February, 1949, deposited two sums: of money, namely Rs. 1,500 and Rs. 700 with the Ambala Commercial Bank, Limited. Two receipts were issued, Exhibits C-1 and C-2, which are identical in wording, and one of them may be given in extenso:
“Received the sum of rupees one thousand and five hundred only for credit to D.A.D.S & T.H.Q.H.Q Sub Area Ambala Cantt. account of Earnest money from Ms. Jugal Kishore Rup Chand.”
3. On 14th February, 1949, the bank suspended payment. On the 7th April the military officer in charge of these contracts wrote the following to the petitioners:
“The following bank receipts tendered by you as earnest monies with the tenders of Lime Quick (sic) and charcoal, are returned herewith duly released for payment.”
4. This is Exhibit C-3. The bank passed a resolution sending the bank into voluntary liquidation on 1st May, 1949, and we may therefore take it that the bank went into voluntary liquidation on that date. On 12th December, 1949, the petitioners applied under Sections 183 and 234 of the Indian Companies Act for being accepted as preferential claimants to the extent of these two sums of money. Harnam Singh, J. by his judgment dated 4th May, 1951, held against the petitioners and they have come up in appeal under the Letters Patent.
5. Mr. Thapar for the appellants submits that he is entitled to claim priority on the ground that the money was deposited for a specific purpose.
6. He relies on Godefroi on Trust at page 104 and on Pekham v. Taylor (31 Bea. 250 and on 4 Eq. 34) but I do not think any one of these cases or the principles laid down therein would apply to the facts of this case. Whether it was trust money or not the fact remains that on 7th April, 1949, the object for which this money had been deposited, i.e, as earnest money for a tender for supply of material, had been achieved and therefore the case would fall under Section 77(a) of the Trusts Act the relevant provision of which is:
“77(a). A trust is extinguished when its purpose is completely fulfilled.”
7. In this case the purpose had been fulfilled and therefore at the time when the bank went into liquidation on 1st May, 1949, there was no longer any existing trust. I am therefore of the opinion that the petitioners are not preferential creditors and this appeal must therefore be dismissed and the judgment of the learned Judge affirmed, but there will be no order as to costs in this court.
8. Falshaw, J.:— I agree.
9. Appeal dismissed.