Give your decision on the following cases with reasons: Mr. Agassi is a trustee for M/s Nadal with a substantive balance in a Bank. The Branch Manager of the Bank asks Mr. Agassi to repay the overdraft granted to him in

Bankers are expected to exercise a closer watch on the conduct of the Trust Account than those in which there is no element of trust. Any transaction, appearing must put the Banker on enquiry. A typical case is the issue in question where a customer draws a cheque on the trust account and deposits it into his own account with the object of reducing or extinguishing his personal overdraft. In the absence of an explanation to the complete satisfaction of the banker, such a transaction should not be allowed. The Branch Manager should refuse to allow the transaction as it appears to be a breach of trust, where trust funds are being used for personal benefit, and the bank has a duty to protect the trust funds.