STATE BANK OF INDIA vs Ananda Mohan Saha

1.THIS Revision Petition is directed against the order dated 5.8.1996 passed by the State Consumer Disputes Redressal Commission, allowing the complaint filed by the respondent in this revision petition. The facts of the case out of which the present controversy has arisen, may be summarised as under :

THE respondent in this revision petition was the complainant before the District Forum. The case pleaded by the respondent was that he took a gold loan of Rs. 17,000/ - by pawning his wife''s gold ornaments weighing 159.500 grams under a gold loan account. The loan was repaid with interest amounting to Rs. 37,680.39 by instalments, the last instalment being paid on 5.12.1986. After the repayment of the loan, the respondent approached the Bank for return of his ornaments but the Bank refused to oblige him on the plea that he had outstanding loan against a Cash Credit Account maintained by him in the name of his firm M/s. Mousumi Silk Screen Printers. The Bank claimed that the gold ornaments which were pledged to it were retained as a security for the outstanding loan of the firm of which the respondent was the proprietor. The claim was set up under the principle of banker''s lien. Despite various requests, the gold ornaments were not returned and finally on 6.5.1987 the Bank wrote to the respondent that the ornaments would not be returned as the same was treated as collateral security against the cash credit account. In these premises the respondent was compelled to file a complaint before the District Forum for the return of the gold ornaments. It may he stated that the petitioner -Bank with whom the ornaments were, had filed a suit against the respondent in the City Civil Court, Calcutta, for declaration and enforcement of hypothecation, charge, recovery of money lent and advanced with interest and cost and the sale of the hypothecated goods. Notice of the suit was served on the respondent on 19.5.1989 wherein it was mentioned that an ex -parte order of injunction was granted by the Court in that suit restraining the respondent from claiming return of the gold ornaments. The application under Order 39, Rules 1 and 2 of the Civil Procedure Code was heard and decided by the Court by order dated 29th August, 1995 by which the application was dismissed and stay was vacated. The Bank had also filed an application for attachment of the ornaments under Order 38, Rule 5. The City Civil Court by order dated 25th May, 1993 dismissed the application. The Bank took up the matter by a petition to the High Court of Calcutta but without success and the High Court dismissed the petition. The District Forum after appraisal of material placed on the record dismissed the complaint of the respondent for return of ornaments.

AGGRIEVED by the order of the District Forum the respondent -complainant approached the State Consumer Disputes Redressal Commission, West Bengal by way of an appeal. By order dated 5th August, 1996, the appeal was allowed and the order of the District Forum was set aside and the claim of the complainant for return of the ornaments was upheld.

THE State Bank of India aggrieved by the order of the State Commission, has filed the present revision petition which is under disposal. We have heard the learned Counsel for the parties. The first point urged by the Counsel for the petitioner is that the complaint filed by the respondent was hopelessly barred by time. It is argued that the ornaments were to be returned to the respondent on or before 5.12.1986. The Bank by letter dated 6.5.1987 finally informed that it was not willing to return the ornaments. The cause of action for filing the proceeding against the Bank arose on 6.5.1987 but the complaint before the District Forum was actually filed in 1994 i.e. long after accrual of cause of action.

ON behalf of the respondent, it is contended that the filing of a civil suit by the Bank against the respondent in the City Civil Court, Calcutta and granting of an injunction restraining the respondent from claiming return of the gold by the said Court had made it impossible on the part of the respondent to make any successful application before the Forum. The injunction order granted on 19.5.1989 was ultimately vacated on 29.8.1995. For calculating the period of limitation, the period from 19th May, 1989 to 29th August, 1995 has to be excluded. It is also urged that the Bank had moved an application under Order 38, Rule 5 in the suit filed against the respondent and that application was dismissed on 25.5.1993 wherein it was observed by the Court that the ornaments in question were being held by the Bank as trustee and not as a lender. The Bank challenged the order dated 25th May, 1993 of the Civil Court by filing a petition in the High Court which was rejected. On the basis of the finding of the City Civil Court, it is argued that no action for the recovery of the gold ornaments should be barred by law of limitation by virtue of Section 10 of the Limitation Act which provides that no suit against a person in whom property has become vested in trust for any specific purpose or against his legal representatives or assignees for the purposes of following in his or their hands such property or the proceeds thereof or for on account of such property or proceeds shall be barred by any length of time.

WE have carefully considered the relevant contentions of the parties and have perused the finding on this point recorded by the State Commission. The finding of the State Commission on the point of limitation, are reproduced below for the sake of convenience : ''The appeal is contested mainly on two grounds. Firstly, the claim of the appellant/ complainant before the Forum was barred by limitation and secondly, the decision taken by the respondents is justifiable on the basis of the principle enunciated in Section 171 of the Indian Contract Act, 1872. As regards the point of limitation, it is argued that the ornaments were to be returned to the appellant on or after 5.12.1986. The appellant, however, went on making correspondence with the Bank urging upon them to return the ornaments and ultimately by a letter dated 6.5.1987, the Bank finally informed that it was not willing to return the ornaments. It is thus argued that the cause of action for filing any proceeding against the Bank arose on 6.5.1987 but the complaint before the District Forum was actually filed in 1994 i.e., long after the date of the cause of action. It is accordingly submitted that the case before the Calcutta District Forum is hopelessly barred by limitation.

On behalf of the appellant, however, it is contended that the filing of a civil suit in the City Civil Court, Calcutta and the granting of an ad interim injunction by the said Court had made it impossible on the part of the appellant to make any successful application before the Forum. The injunction order was ultimately rejected on 29.8.1995. Another point raised by the appellant is that the Court has held in its order dated 25.3.1993 that the ornaments in dispute are being held by the Bank as trustees and not as a lender. It was in connection with the disposal of the petition under Order 38, Rule 5, Civil Procedure Code. On the basis of this finding of the City Civil Court, it is argued on behalf of the appellant that no action for the recovery of the gold ornaments should be barred by law of limitation by virtue of Section 10 of the Limitation Act, 1963. The said section provides that no suit against a person in whom property has become vested in trust for any specific purpose or against his legal representatives or assignees (not being assignees for valuable consideration) for the purpose of following in his or their hands such property, or the proceeds thereof, or for an account of such property or proceeds shall be barred by a length of time. The word suit has not been actually defined in the Limitation Act, but it had been stated that a suit does not include an appeal or an application. By judicial decision, however, it has been held that the word suit as contemplated in the provisions of the Limitation Act has a wider meaning and that it includes any legal proceeding strictly dealt with by the Civil Procedure Code brought by one party against another order to enforce a civil right, vide AIR 1971 MP 140. Although a proceeding under the Consumer Protection Act is not one under the Civil Procedure Code, in suitable cases the principle enunciated in Section 10 as aforesaid may apply to other proceedings also if it is really an action against a trustee. A banker within a meaning of Section 171 of the Indian Contract Act, 1872 who holds any goods as security from a customer is no doubt a trustee as the security is not intended to be transferred to him and he does not acquire any title to it except on the basis of a civil proceeding. Hence truly speaking a proceeding for recovery of security can be brought against a banker even after the expiry of the period of limitation.

The point of limitation can be examined from other angles also. As stated above, an order of temporary injunction under Order 39, Rules 1 and 2, Civil Procedure Code was issued by the City Civil Court against the appellant and any suit or proceeding for recovery of the gold ornaments in the face of such an order would have been fruitless. The injunction was ultimately vacated on 29.8.1995. So the appellant was compelled under force of circumstances to remain idle in the matter of recovery of the gold ornaments.

Again the Consumer Court under the Consumer Protection Act, 1986 were established in West Bengal in 1990. Hence before that no proceeding could be started in the District Forum of Calcutta for the recovery of the gold. The period of limitation was prescribed under the Act under Section 24A with effect from 18.6.1993. Before that the general law of limitation would have been applicable in such cases. No suit in this regard was, however, possible on the grounds discussed above. So in our opinion there were sufficient grounds for appellant/ complainant to file the proceedings before the Calcutta District Forum even after the expiry of the period of general law of limitation.

The State Commission rightly relied upon the provisions of Sections 10 and 15 of the Limitation Act. The City Civil Court by order dated 19th May, 1989 restrained the respondent from claiming return of the gold ornaments and that order of the Court was vacated on 29th August, 1995. Section 15(1) provides that : ''In computing the period of limitation for any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded.''

In our opinion, the finding returned by the State Commission on point of limitation is in conformity and in consonance with law. We do not find any legal flaw which may call for our interference.

THE next point urged on behalf of the petitioner is that the order of the State Commission suffers from legal infirmity as the provision of Section 171 of the Indian Contract Act were applicable to the facts and circumstances of the present case and the petitioner -Bank could claim the Banker''s general lien to retain the pledged gold ornaments for the general balance of account. The State Commission wrongly relied upon the provisions of Section 174 of the Indian Contract Act and wrongly held that the petitioner Bank was not lawfully entitled to retain the gold ornaments.

ON behalf of the respondent it is urged that the finding recorded by the State Commission are correct and in accordance with law. On this point the State Commission recorded the following findings : "The main argument of the respondents seeking the propriety of their retaining the gold as a security for another loan subsisting against the appellant is, however, the provisions of Section 171 of the Indian Contract Act. It is strongly argued on behalf of the appellant that the security of the gold was strictly for the loan taken for the amount of Rs. 17,000/ - (Rupees seventeen thousand) only termed as gold loan. It is argued that the banker''s lien is to be available only in respect of a security for a general balance of account and that in the instant case the subsequent advance taken by the Forum of the appellant cannot be tagged to the earlier security as the later loan was taken by a different person against a different account. As a matter of fact, the appellant had at one time proposed to tag the security of gold with loan against the Cash Credit Account, but the same was not acceded to by the Bank. So it is presumed that the gold loan was for a specific purpose and there was no agreement that it should be utilised for other loans also. Under Section 174 of the Indian Contract Act, the pawnee shall not, in the absence of a contract to the effect, retain the goods pledged for any debt or promise other than the debt or promise for which they are pledged. It is, however, provided also in the said section that such contract in the absence of anything to the contrary shall be presumed in regard to subsequent advances made by the pawnee. But for the reasons discussed above it cannot be held that the subsequent advances made to the Firm of the appellant would be brought to a general balance of account. The two accounts in our opinion are for two different purposes taken at two different times and the appellant''s request to make a resultant balance by treating the former gold loan as repaid was not successful. Hence we are of the opinion that retaining the gold on the basis of Sections 171 and 174 of the Indian Contract Act is not lawful in this case. Moreover, a separate and independent security was given by the appellant for the loan relating to his Cash Credit Account in this case. It is not stated that the said security has been rendered insufficient in any way. There is also no mention of the gold loan as collateral security to be available for the subsequent loan."

We have carefully examined the finding recorded by the State Commission. In our opinion, the State Commission correctly analysed the provisions of Sections 171 and 174 of the Contract Act. The finding recorded by the State Commission is further fortified by the observations made by the Civil Court while disposing of the applications filed by the Bank under Order 39, Rules 1 and 2 of the Civil Procedure Code and under Order 38, Rule 5 of the Civil Procedure Code. The observations made by the Civil Court are reproduced below :

"Thus, it appears that the gold ornaments as it has been contended before me in connection with the gold account and already liquidated has no concern or connection with the Cash Credit Account. The machineries and the products of the concern "M/s. Mausomi Silk Screen Printers" are hypothecated against that loan, and more so, the defendant No. 2 is the guarantor. There is no stipulation between the parties that in any manner the gold ornaments can be treated as a lien of the amount of cash credit loan although the gold account loan has already repaid and consequently liquidated."

"The gold ornaments that was pledged with the plaintiff by the defendant No. 1 has or have no reference with the term loan sanctioned to the defendants for the recovery of which the suit has been filed. The gold ornaments I find, are not being subject matter of the suit."

We see no illegality or jurisdictional error in the findings recorded by the State Commission. It follows that this revision petition is devoid of merit and deserves dismissal. We accordingly dismiss the revision petition leaving the parties to bear their own costs. Revision Petition dismissed.