PASS BOOK AND STATEMENT OF ACCOUNT :
Though the Pass Book contains true and authenticated record of the customer’s account with the banker, no unanimous view prevails regarding the validity of the entries in the Pass Book. The banker may incur errors in recording entries in the Pass Book. The question, therefore, arises whether the Pass Book constitutes a conclusiveproof of the accuracy of the entries made therein.
According to Sir John Paget, “The proper function which the Pass Book ought to fulfill is to constitute a conclusive and unquestionable record of transactions between the banker and the customer and it should be recognized as such. After full opportunity of examination on the part of the customer all entries, at least to his debt, ought to be subsequently final and not liable to be subsequently reopened at any rate to the detriment of the banker”.
In fact this view point rests on the presumption that the customer is under an obligation to verify the entries made in the Pass Book periodically and if detects any mistake, he ought to bring it to the notice of the banker within a reasonable period. If he does not do so and remains silent after the receipt of the Pass Book, customer’s concurrence with the correctness of the entries is taken for granted. In some of the legal judgements, especially in Morgan vs. United States Mortgage and Trust Co. and Devaynes vs. Noble (1816) it was held that negligence or omission on the part of the customer to examine the correctness of the entries in the Pass Book is a fault on his part and thus renders as an evidence of settled and accepted account. The implied obligations on the customer to examine the Pass Book have not been supported in many other judicial decisions in England and India. For reference, we may cite the cases of Keptigalla Rubber Estate Co. vs. National Bank of India (1909) and Chatterton vs. London and Country Bank. In the absence of such obligation on the customer, the entries in the Pass Book cannot be treated as a conclusive proof of their accuracy and as settled account,. The customer is competent to point out the mistakes or omissions in the Pass Book at any time he happens to know about them. Thus the entries in the Pass Book do not form the conclusive evidence of their correctness accuracy. The entries erroneously made or wrongly omitted may be either advantageous to the customer or the banker. Both the parties may, therefore, indicate the mistakes or omissions therein and get them rectified.