Central Bank of India vs Miss Jayanti Kalgo Dessai

R.M.S. Khandeparkar, J.—The present appeal arises from the judgment and decree dated October 13, 1995, passed in Special Civil Suit No. 294/1992/A by the Civil Judge, Senior Division, Margao, whereby the suit filed by the respondent herein was decreed and the appellant herein was directed to pay to the respondent a sum of Rs. 40,490 with interest thereon at the rate of 10 per cent. per annum from June 27, 1992, till the date of final payment. It is seen from the record that at the time of admission of the appeal, the appellant was directed to deposit all the amount due to the respondent within two weeks from March 22, 1996, and accordingly, the appellant has deposited a sum of Rs. 55,400 in this court on April 16, 1996.

The case of the respondent herein is that on December 27, 1985, the respondent deposited with the Cuncolim branch of the appellant-bank herein a sum of Rs. 20,000 in fixed deposit, vide Money Multiplier Deposit Certificate No. 15/373. The deposit was for a period of seven years and was due for maturity on June 27, 1992. On July 24, 1992, the respondent received a letter from the appellant-bank to renew the certificate. Thereupon the respondent presented herself at the appellant-bank and informed that she was not desirous of renewing the said fixed deposit and that instead she wanted to withdraw the entire amount, that is, the maturity value on the fixed deposit. The appellant-bank, however, did not allow the respondent to withdraw the said amount on the ground that the appellant-bank had filed a civil suit against the father of the respondent for recovery of loan granted to him. Since, repeated requests failed to yield any result, the respondent herein sent a notice dated August 21, 1992, requesting the appellant-bank to pay the entire maturity amount and further warning that on failure to do so, the respondent would have recourse to the legal proceedings. The respondent ultimately filed the present suit.

The case of the appellant herein is that the respondent had invested with the appellant a sum of Rs. 20,000 against fixed deposit for a period of seven years. It is also not disputed that the said amount deposited for seven years matured on June 27, 1992. It was, however, contended by the appellant that the maturity value on the certificate could not be allowed to be withdrawn by the respondent since the appellant had a lien on the said amount on account of the loan advanced to the respondent''s father, which has since remained unpaid. It is further stated by the appellant that the respondent had offered the fixed deposit receipt bearing No. 15/373 as a collateral security for the loan obtained by her father from the appellant-bank and that, therefore, the respondent was not entitled to withdraw the said amount unless the loan and dues were fully repaid.

The trial court after recording the evidence and hearing the parties was pleased to decree the suit as stated above by the impugned judgment and decree.

Shri C. F. Alvares, learned advocate, appearing for the appellant, submitted that the impugned judgment is solely based on two decisions, namely, one of the Madras High Court and the other of the Kerala High Court and that neither of these decisions would apply to the facts of the present case. He further submitted that in view of the document pertaining to lien executed by the respondent, the maturity amount on fixed deposit receipt was not liable to be paid to the respondent unless the loan amount due by her father was cleared. He further submitted that by virtue of the document executed by the respondent offering the said fixed deposit receipt as security for her father''s debt, the appellant-bank which exercising its lien had lawfully retained the money and had rightly refused to pay the same to the respondent. He further submitted that the money advanced to the father of the respondent was public money and the respondent could not be allowed to withdraw the said amount unless the bank dues were cleared.

The point for consideration in the present case is whether the bank could have retained the money deposited by the respondent under receipt No. 15/373 on the ground that the same was offered by was of collateral security for the loan obtained by her father and that, therefore, unless the loan was cleared the amount under fixed deposit could have been withheld by the bank. On hearing the learned advocate for the appellant and on perusal of the records, it is seen that the amount of the fixed deposit receipt was deposited with the appellant-bank on December 27, 1985, by the respondent. It is also on record that the appellant-bank has already instituted a suit for recovery of the loan amount against the father of the respondent and the two guarantors and that the respondent was not a party to the said suit. It has also come on record that apart from the said suit filed against the father of the respondent and the two guarantors for recovery of the loan, there was no reference whatsoever in the said suit to any lien in respect of the loan obtained by the father of the respondent. The records disclose that the loan was advanced to the father of the respondent some time in the year 1986, the alleged lien was obtained on August 18, 1987, and the suit against the father of the respondent and the two guarantors was filed in the year 1989. It has also come on record that the amount which was deposited was actually given to the respondent by her uncle by name Yeshwant Dessai and when she went to deposit the same amount in fixed deposit, she was merely 17 years of age. It has further come on record through the deposition of DW-2 that when the signature of the respondent was obtained in 1987, she was not informed as to for what purpose her signature was obtained. In other words, the evidence on record shows that the signature of the respondent was obtained without informing her of the contents of the said document. It has also come on record through DW-3, the bank manager of the appellant-bank, that in the year 1987 when he obtained a document of lien from the respondent in respect of the loan advanced to her father, he did not ascertain her age. Moreover, it has been clearly admitted by the manager of the appellant-bank that there was no agreement between the bank and the respondent''s father as regards the lien for the loan advanced to the father of the respondent. It is also admitted by the manager of the appellant-bank that if the bank has a lien over fixed deposit receipt then the bank does not allow the party to renew the certificate and the practice is to appropriate the money towards the dues of the bank.

A perusal of the entire evidence clearly shows that the appellant-bank had filed a suit against the father of the respondent and the two guarantors and the same is pending for adjudication. Undisputedly the respondent is not a party to the said suit. It is further clear from the evidence on record that the amount deposited in fixed receipt by the respondent had fully matured in the year 1992 and she was asked to renew the same. In other words, as rightly observed by the trial court, the amount of the fixed deposit receipt on maturity was still lying idle with the bank at the time of disposal of the suit. The appellant-bank has been unable to point out any provision of law which entitled the bank to retain the amount matured on a fixed deposit receipt towards the payment of loan obligation of a person other than the person in whose name the fixed deposit receipt stands.

Indeed the learned advocate for the appellant-bank tried to take shelter u/s 171 of the Indian Contract Act, 1872. The said section 171 of the Indian Contract Act reads as under :

"171. General lien of bankers, factors, wharfingers, attorneys and policy brokers. - Bankers, factors, wharfingers, attorneys 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 bare reading of section 171 of the Indian Contract Act clearly shows that it has no application to the case in hand. Admittedly the amount deposited was not deposited by the father of the respondent. Admittedly there was no agreement between the father of the respondent. Admittedly there was no agreement between the father of the respondent and the appellant-bank that the amount deposited by the respondent will furnish as lien in addition to the guarantors to the said loan. As rightly observed by the trial court the reliance placed on section 171 is clearly a misconceived exercise. The decisions of the two High Courts in the matter of N. Mohamed Hussain Sahib Vs. The Chartered Bank, Madras and Another, and in the matter of Union Bank of India Vs. K.V. Venugopalan and Others, are squarely applicable to the facts of the case in hand. As rightly observed by the trial court, in fact, the decision of the Madras High Court is to the point and a clear answer to the submission made by the learned advocate for the appellant-bank. The provisions of section 171 are not applicable to the instant case. The trial court after perusing the materials on record and the evidence adduced has arrived at a finding that there is no justification both in fact and law for the appellant-bank not to allow the respondent to withdraw the amount which had matured under the fixed deposit receipt. In fact, withholding the said amount after maturity of the fixed deposit receipt in spite of the fact that the respondent had demanded the payment thereof is clearly illegal. I do not find any infirmity in the findings arrived at by the trial court. The appellant-bank has no right to retain the said amount towards the loan advanced to the father of the respondent. Undisputedly there is a separate suit filed for recovery of the said loan from the father of the respondent and the two guarantors. In the result no case is made out for interference in the impugned judgment and the appeal is, therefore, liable to be dismissed. The bank is not entitled to withhold the amount deposited by the respondent against fixed deposit receipt, vide Money Multiplier Deposit Scheme Certificate No. 15/373. The same was not offered by the respondent as collateral security for the loan obtained by her father, Shri K. R. Dessai. Likewise, the said amount cannot be withheld by the appellant-bank on the ground that the said loan amount is not fully paid to the appellant-bank. Being so, the appellant is liable to pay the said amount to the respondent as held by the trial court. Hence, the appeal is liable to be dismissed and is hereby, accordingly, dismissed. However, on the facts and circumstances of the case, there shall be no order as to costs.