S.Krishna vs Indian Overseas Bank

WE heard the arguments on behalf of the appellant as well as the Counsel for the respondent. It appears from the complaint that the complainant stood as surety for a sum of Rs. 30,000/- on behalf of the principal borrower. His fixed deposit receipt was given as security, which will mature on 29.4.1990, to the bank. The borrower could not repay the amount and when the borrower did not pay the amount, in exercise of general lien, on maturity of fixed deposit receipt, and as it was given as security, the bank appropriated the said sum towards the loan account. Questioning the said appropriation, the complaint was filed. It is not in dispute that the appellant herein guaranteed the payment of the debt due by the principal borrower, and as security, gave his fixed deposit receipt, which will mature on 29.4.1990. In exercise of the power of general lien and as this particular fixed deposit receipt was produced as security for the repayment of the loan, the bank appropriated the proceedings. The only contention raised is that there was some directive from the Central and State Government to the Bank to waive the penal and regular interest for non-payment of the amount beyond the control of borrower. Having regard to the circumstances of this case, the bank should have reduced the penal interest or even the regular interest, but that is the matter to be decided by the bank. As it was observed by the District Forum even after appropriating the sum of Rs. 51,615.00, still there is a balance of Rs. 11,875.79 was left. If the appellant succeeds in persuading the bank in reducing the interest, the balance of Rs. 11,875.79 will cover the same. Even the prayer for submitting the security with some other security, it cannot be said to be any deficiency in service as it is a matter of negotiation or agreement between the parties. In the result, we do not merit in the appeal. The appeal is dismissed. No order as to costs. Appeal dismissed.