BRANCH MANAGER, CANARA BANK vs P. MOOVENDAN

THE appeal arises out of the order of the District Consumer Disputes Redressal Forum, Dindigul dated 25.3.92 in O.P. 104/91. THE opposite party is the appellant

THE complainant obtained a loan of Rs. 6,500/- from the opposite party by pledging his jewels weighing 6 soverings on 5.12.88. He repaid the entire money towards principal and interest on 13.7.91 but the Branch Manager issued a receipt therefor, but refused to deliver back the jewels, on the ground that the complainant had borrowed a sum of Rs. 10,000/-, that that loan was not discharged and the bank was entitled to lien on these jewels and hence this complaint. The opposite party contended that as per agreement and as per law, it was entitled to a lien on these jewels for the earlier loan taken by the complainant and hence the jewels were not returned.

The District Forum found that the Bank was not entitled to any lien and directed it to return the jewels forthwith. Aggrieved thereby the opposite party has preferred this appeal.

THERE is no dispute about facts. The complainant has taken a jewel loan of Rs. 6,500/- on 5.12.88 and discharged the same on 13.7.91. But the jewels were not returned on the ground that the complainant had earlier borrowed a loan of Rs. 10,000/- and it was still due. The point for consideration is whether the bank is entitled to a general lien on these jewels. It is argued on behalf of the complainant that since the jewels have been pledged only for the loan of Rs. 6,500/- under loan No. 614/88, the jewels had to be returned on the discharge of the loan. Reliance is sought to be placed on Section 174 of Contract Act which runs thus: "The pawnee shall not, in the absence of a contract to that effect, retain the goods pledged for any debt or promise other than the debt or promise for which they are pledged; but such contract, in the absence of anything to the contrary, shall be presumed in regard to subsequent advances made by the pawnee".

Section 174 is a general provision laying down that the pawnee shall not after discharge of the debt retain the goods pledged, but Section 171 is a special provision which gives bankers, factors; wharfingers, attorney of a High Court and policy brokers the right to retain as security any goods bailed to them. Section 171 runs thus: "Bankers, factors, wharfingers, attorney of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain, as a security for a general balance of account any goods bailed to them; but, no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect".

A pledge is only a species of bailment in which goods are bailed as a security for the repayment of debt or performance of a promise. Section 174 is a general provision in respect of pledges, but Section 171 is a special provision in favour of bankers, factors, wharfingers, attorney of a High Court and policy-brokers and this provi sion under Section 171 entitles these persons to detain the goods bailed to them for any debt due to them. Generalibus specialia derogant (special things derogates from general things), is a well-known dictum. The banker is therefore entitled to retain the jewels pledged in respect of a loan even after the discharge of that loan as a lien for another loan due to it from the loanee. The decision of the Supreme Court in Lallu Prasad v. Rahmad Ali (AIR 1967 SC 1322) relied upon by the District Forum relates to the right of the pawnee to file a suit to recover the debt and it is held therein that if the pawnee is not in a position to re-deliver the goods, he cannot have both the payment of the debt and also the goods. This decision has nothing to do with the right of the Bank to detain the goods pledged to it as a lien for another loan under the provision of Section 171 of the Contract Act. The Forum has not properly appreciated this decision. It is unfortunate that the attention of the District Forum has not been drawn to the decision of this Commission in Karur Vysys Bank v. A.G. Krishnaswamy (A.P. 39/92) (dt. 27.4.92), wherein the same identical point has been decided and that was an appeal from the District Forum, Dindigul itself. We therefore hold that the appellant/opposite party is entitled to retain the jewels as a lien under Section 171 of the Indian Contract Act. Further in the case on hand, the complainant has himself executed Exhibit B2. Agreement under which, the Bank is entitled to hold this jewel as security for any other liability payable by the complainant in respect of any financial advance granted and owing and that may be owing hereafter to the bank on any account whatsoever whether solely or jointly with others and whether as principal debtor or as surety. This is a contract to the contrary within the meaning of Section 171 of the Contract Act. On the ground as well, the opposite party is entitled to withhold these jewels as security for the discharge of the earlier loan. In the result the appeal is allowed, the order of the District Forum is set aside and the complaint fails and is dismissed, but without costs throughout. Appeal allowed.