BABULAL D. DASANI vs Syndicate Bank

THE complainant alleged deficiencies in the service of the Bank viz. THE Syndicate Bank, Colaba Branch. THE Complainant, Shri Babulal Dasani, deposited a cash certificate valued at Rs. 6,78,810/- with the Syndicate Bank, Colaba Branch at Bombay for a bank guarantee in favour of M/s. Sheenath & Company. Alongwith complainant, Shri Pradip Dasani also deposited his 2 cash certificates valued at Rs. 7,06,125/- and Rs. 20,175/- respectively for the same purpose. THE opposite party had given the bank guarantee to M/s. Shreenath & Co. bearing No. 26/- 82 for a sum of Rs. 13,41,840/- -. Over the period the maturity value of the complainant''s certificate and also the certificates of Pradip increased more than the amount of guarantee. THE maturity value of the complainant''s certificate is Rs. 8,27,082/- on 22.5.91 while Shri Pradip''s Rs. 13,54,065/- and Rs. 38,688/- respectively. THE complainant therefore, alleged that the opposite party is holding the security in excess of the guarantee value. THE complainant requested the opposite party bank to return his cash certificate as the maturity value of Pradip Dasani''s two certificates is enough to cover the limit of Bank guarantee, but the opposite party failed to reply. THE complainant wrote to the opposite party on 26.4.1991, followed by reminder dated 27.5.1991 and also served with legal notice dated 29.5.1991 and 18th June, 1991. In spite of the aforesaid attempts made by the complainant the opposite party neither made the payment of the value of certificate nor returned the certificate to the complainant. THE complainant therefore, claims back the maturity value of his certificate amounting to Rs. 8,27,062/- and compensation of Rs. 50,000/- + overdue interest. In response to the notice "Under Section 13 of the Consumer Protection Act, the opposite party filed its written version dated 2.12.1992. THE complainant''s claim was opposed on the ground that a Civil Suit 354/1985 filed by Syndicate Bank is pending against M/s. Meenakshi & Company. Another contentions of the bank is that the Collector of Customs Bombay vide letter dated 17th March, 1992 requested the Bank to freeze the accounts of M/s. Takwani & Co. including all the assets held by the parties. THEre are other ancillary contentions raised by the opposite party which are not of much importance.

WE have heard Shri Bafna, Advocate for the complainant and Shri D.P. Joshi, Advocate for opposite party. On the basis of the rival contentions the following points arise for our consideration. (1) Whether there has been deficiency in the service of the opposite party? (2) Whether complainant has been put to a loss and hence entitled for compensation?

The facts that the complainant along with Shri Pradip submitted their Cash certificates for the Bank guarantee for the value mentioned therein are not in dispute. Similarly, the maturity value of the cash certificates is also not in dispute. Hence the only aforesaid 2 points survive for our consideration. The complainant is a consumer of the service of the opposite party Bank since he had hired the services of the opposite party as a customer and also furnished a cash certificate of Rs. 6,78,810/- with the opposite party for a bank guarantee. The Bank guarantee was for the total amount of Rs. 13,41,640/- only. Apart from complainant''s aforesaid cash certificate, opposite party is also holding 2 certificates of the total value of Rs. 13,92,753/- The aforesaid amount covers the bank guarantee amount of Rs. 13,416,40/- Thus, it is obvious that there is no reason or any justification for the opposite party to withhold the cash deposit of complainant. Shri, Bafna learned Advocate for the opposite party has submitted that they are entitled to hold back the cash certificate of complainant as Bank has lien over the cash certificates till the outstanding dues against Minakshi and Company are not recovered. It is, therefore, argued that till the Civil Suit bearing No. 354/ 1985 filed by the Bank against Minakshi & Company is pending for the recovery, the cash certificate is held under lien. The opposite party has relied the documents filed at Annexure''B''. Perusal of the documents at Annexure ''B'' shows that M/s. Minakshi & Company consist of Mr. Pradip D. Dasani and Mrs. MinakshiP. Dasani. The complainant, Shri Babulal is not at all mentioned in documents at Annexure ''B'' as a borrower. We therefore, do not find any substance in the contention raised by the opposite party that because of the pendency of the Civil Suit filed by the Bank against M/s. Minakshi & Company, the opposite party can withheld complainant''s certificate in excess of the guarantee value and thus deprive the complainant of his money under the pretex of lien. Nowhere the Bank has stated that they had any transaction with Babulal. In our view, therefore, the defence of the opposite party does not appear to be justified. We have also given our anxious consideration to the contentions of Shri Joshi as regards the bankers general lien under Section 171 of Contract Act. According to Shri Joshi since the Bank has to recover dues from M/s. Minakshi & Company and whereas the Civil Suit is pending in the High Court, the complaintis not maintainable. We have already observed that the complainant is not at all concerned with M/s. Minakshi & Company and therefore, the principles of Bankers general lien is. totally irrelevant in this case. The Banker''s general lien under Section 171 of the Contract Act provides a right of defence and not the right of action. While interpreting the principles of the general lien of the Bank under Section 177 of the Contract Act, the Kerala High Court in the case of Union Bank of India v. K.V. Venugopalan and Others, (AIR 1990 Kerala 223) has held that money in Fixed Deposit - Bank cannot press into service Bankers'' lien. While interpreting the Banker''s lien, the Bombay High Court in the case of State Bank of India v. Javed Akhtar Hussain & Other, (AIR 1993 Bombay 87) has held that bankers'' lien under Section 171 of the Contract Act can not operate against the Fixed Deposit in joint account with wife in other branch of the same bank. The learned Judge of the Bombay High Court has referred a decision of the Supreme Court reported in AIR 1992 page 1066. In view of this judicial decisions in our view, the opposite party was negligent in invoking the general lien against the complainant''s deposit for nonpayment of the amount of fixed deposit on complainant. We therefore, find that the opposite party Syndicate Bank was deficient in its service towards the complainant. It is clearly found that the complainant''s fixed deposit has been wrongly withheld by the opposite party although they are holding 2 cash security deposit of Shri Pradip, exceeding the guarantee amount in question. The maturity value of the 2 cash deposits of Pradip Dasani clearly exceeds the amount of Bank guarantee and are enough to cover the security for the amount of the Bank in the event of the recovery. We, therefore, are firmly of the view that withhelding the Cash deposit of the complainant for no justifiable reasons amounts to deficiency in the service of the opposite party.

Another contentions raised by the opposite party is that because of the letter of Collector of customs, Bombay dated 17th March, 1992 requesting to freeze the account of M/s. Takwani& Company alias M/s. Takwani & Sons, the complainant''s cash certificate is not returned. The Assistant. Collector''s letter has been annexed in this complaint at Annexure ''A'' of the opposite party. In that letter, the Asstt. Collector of Customs has written to the opposite party to freeze the current as well as other accounts of all the parties mentioned in that letter. There are total 6 parties namecl in para one of that letter. In that list, there is no name of the complainant Shri Babulal Dasani or any of his firms. However, it is not clear from the list as to how the complainant Babulal D. Dasani is concerned with M/s: Takwani & Company. The opposite party has not furnished any proof or documents to substantiate its defence showing the nexus of Babulal Dasani with any of the firms mentioned in the aforesaid letter. More over, the opposite party has not produced any judicial order from any Court to freeze the account of complainant Shri Babulal Dasani. We find that Annexure ''A'' is only a letter of request for cooperation. In any case, the aforesaid letter do not legally authorise the opposite party to withheld the cash certificate of complainant merely because the customs department wanted to investigate the import of steel in violation of Customs act. The opposite party has not placed any document to show that complainant figures in any way during the investigation by Custom Department after the letter dated 17.3.1992 was issued. We also do not find anything on record to indicate that the custom department has in any way identified the complainant Shri Babulal Dasani as a person concerned behind the import of steel. We, therefore, find that the opposite party merely on a letter of request withheld a cash certificate of complainant and has thus put the complainant into financial loss. Thus we find that both the defences raised by the opposite party are untenable and not justifiable.

IN view of our findings in the proceeding paras it is obvious that the complainant has been put to considerable loss. The complainant has written as many as 2 letters dated 26.4.1991 and 27.5.1991 and legal notices dated 29.5.1991 and 18.6.1991 which were not even replied by the opposite party. The complainant in his letter dated 26.4.1991 has requested to release the amount. IN another letter dated 26.5.1991, which was in the nature of the reminder, the complainant repeated his earlier demand of return the amount. IN reply, the Syndicate Bank by its letter dated 26.4.1991 has only informed that they are seeking the necessary permission from the Head Office. Under the circumstances, we find that the complainant was deprived of his cash certificate which he needed for his use. Thus the loss caused to the complainant is very obvious. We therefore, find that the loss caused to the complainant is due to the negligence in the service of the opposite party. The complainant has claimed the amountof Rs. 8,27,062, the value of his cash certificate and amount of Rs. 50000/- as compensation. We find that the claim of the complainant is reasonable and justified considering the gross negligence on the part of the opposite party. The opposite party under the guise of unjustifiable reasons, withheld the complainants certificate and thus caused financial loss to the complainant. We therefore, are satisfied that the complainant is entitled to get back maturity value of his certificate amounting to Rs. 8,27,062/- as on 21.8.1991, i.e. on the date of this complaint and also Rs. 50000/- as compensation for not making the payment in time. Hence we pass the following order. ORDER The complaint is allowed. The opposite party is directed to pay to the complainant Rs. 8,27,062 together with interest at the rate of 18% p.a. for the period after the maturity till the amount is paid and further pay Rs. 50000/- to the complainant towards compensation. The aforesaid amounts be paid by opposite party within 30 days from the receipt of this order failing which the amount of compensation shall carry interest at the rate of 18% p.a. till realisation. Complaint allowed.