Sushil Kumar Das vs ALLAHABAD BANK

THE instant appeal has been directed against the judgment and order dated 9.5.95 passed by the learned District Forum, Calcutta in C.D.F. Case No. 2872 of 1994 by which the complaint petition was dismissed.

THE fact of the case is that the Complainant/appellant alongwith Dukhi Biswas since deceased jointly took an agricultural loan of Rs. 62,000/- in the year 1985 from the respondent/ bank for pruchase of a tractor for cultivation purpose. THE said loan was secured by mortgage of 10 acres of agricultural land worth of Rs. 3 lakhs, besides pledge of the tractor with the respondent/bank as security against the said loan of Rs. 62,000/-. THE appellant alongwith said Dukhi Biswas paid Rs. 80,000/- to the respondent/bank between 3.2.86 to 8.3.94. THEreafter the respondent/bank made a further claim of Rs. 56,574/- taking into account the interest payable upto June 1994. One of the borrowers namely Dukhi Biswas died. THE present appellant opened on 2.8.91 two Fixed Deposit Account for Rs. 30,000/-each bearing Nos. 100302/ 269/91 and 100321/270/91 with the respondent/bank and the same were matured on 2.8.94 and the matured value, of both the accounts aggregated to Rs. 88,070/-. THE said two Fixed Deposit receipts were purchased for the benefit of the appellant''s grand-daughter Papiya Santra who was the nominee and beneficiary of the said for his marriage purpose and the said Fixed Deposit receipts were never kept on lien against the agricultural loan for purchase of a tractor. It is also the case of the appellant that although Dukhi Biswas one of the borrowers died, the Complainant/appellant proposed to pay the balance of agricultural loan of Rs. 56,000/- by installment and the installment payments had duly been proposed as per letter dated 29.1.94 being Annexure ''A'' to the Memo of Appeal. THE Complainant/appellant also suggested to take first of the such installment on Rs. 5000/- out of the proceeds of the two fixed deposit receipts which were matured on 2.8.94 and the said suggestion was accepted by the respondent/ bank in consequence of mutual discussion between the Complainant/appellant and the respondent/bank. Inspite of the said fact, the respondent/bank after adjustment of the entire dues of Rs. 56,574/- on account of the agricultural loan from the proceeds of the Fixed Deposit receipts standing in the name of the Complainant for the benefit of his grand-daughter, the respondent/bank credited only Rs. 29,384/- in the S.B. Account of the appellant/Complainant although the Complainant-bank agreed to credit Rs. 83,070/- after adjustment of Rs. 5,000/- on account of the agricultural loan as per mutual discussion. It is contended by the Complainant/appellant that the dismissal of the complaint petition on the basis of aforesaid facts by the learned District Forum, Calcutta is illegal and bias. It is further contended that the decision cited by the learned District Forum, Calcutta reported in II (1992) CPJ 801 is not applicable in the instant case because the facts of the said case were that the Complainant pledged jewels with bank for obtaining loan of Rs. 6500/- which was paid with interest by the Complainant. In spite of that, the bank refused to return the jewels on the ground that the Complainant had not discharged the previous loan but in the instant case the captioned Fixed Deposit receipts were not pledged with the bank for the agricultural loan and bank cannot apply general lien on the Fixed Deposit receipts as per provisions under Section 171 of the Indian Contract Act. THE Complainant/ appellant prayed for setting aside of the Judgment and Order dated 9.1.95 and to credit the balance of Rs. 83,070/- out of the Fixed Deposit receipts after adjustment of Rs. 5,000/- from Rs. 88,070/- as agreed upon by the appellant/complainant after mutual discussion by the respondent/bank and to pay compensation of Rs. 3,000/- for such harassment, mental agony and torture caused to the Complainant/appellant and also prayed for the cost of the proceeding. The respondent/bank denied all material allegations and contended that the order passed by the learned Calcutta District Forum, was right and proper and it should not be interfered with and that the bank can invoke general lien on the Fixed Deposit receipts deposited by the customer in the ordinary course of banking business. It is alleged that by the respondent-bank that the adjustment of the entire dues from the fixed deposit receipts of the Complainant-appellant was made with his consent and it was adjusted as per law after due service of notice and that the Complainant/appellant alone is obliged to pay the dues of the respondent/bank and that the learned District Forum, Calcutta rightly held that the complaint/petition was not maintainable and that the appeal fixed by the Complainant/appellant is frivolous, harassing aad should be dismissed with cost. DECISION

It is admitted by the Complainant/appellant that an agricultural loan of Rs. 62,000/- was obtained by the Complainant/appellant alongwith one Dukhi Biswas. It is also not disputed that the Complainant/appellant and Dukhi Biswas paid Rs. 80,000/- on account of the said agricultural loan of Rs. 62,000/- with accrued interest till 1994, leaving a balance thereby of Rs. 56,574/- against the said agricultural loan. It is further admitted that there is a mortgage of agricultural loan to the extent of 10 acres belonging both the Complainant/appellant and Dukhi Biswas worth of Rs. 3 lakhs as security against the said agricultural loan in addition to mortgage of the tractor. It appears from the Annexure ''A'' to the Memo of Appeal that the Complainant/appellant alone indicated to repay the agricultural loan by installments, although the other borrower Dukhi Biswas died in the meantime, it further appears from the letter dated 1.8.94 being Annexure ''B'' to the Memo of Appeal that on the basis of mutual discussion between the Complainant/appellant and the bank it was arranged that Rs. 5000/- would be adjusted on account of the agricultural loan from the proceeding of the two Fixed Deposit receipt Nos. 100320/269/91 and 100321/270/91 aggregating to Rs. 88,070/- standing in name of the Complainant/appellant for the benefit of his grand-daughter for her marriage purpose. The marriage of the appellant/complainant''s grand-daughter was fixed but due to adjustment of the entire dues on account of agricultural loan from the proceeds of the Fixed Deposit Receipts standing in the name of (he Complainant/appellant for the benefit of his grand-daughter. He could not give her in marriage due to dearth of money.

FROM the aforesaid facts, it is clear that the intention of the Complainant/appellant is bona fide inasmuch as that inspite of death of one of the borrowers, the Complainant/appellant himself undertook to repay the loan by installment as per letter dated 29.1.94 and subsequently confirmed by his letter dated 1.8.94 on the basis of discussion between the Complainant/appellant and the bank. It is also dear on the face of admission by the bank that the Complainant/ appellant and Dukhi Biswas paid Rs. 80,000/- as against agricultural loan of Rs. 62,000/- compounded with interest at Rs. 1,36,574/- at the end of March, 1994, leaving the balance thereby Rs. 56,574/-. It is further observed that the agricultural loan is well secured by mortgage of 10 acres of agricultural land belonging to the Complainant/appellant and late Dukhi Biswas in addition to pledge of the tractor itself. The respondent/bank had in its hand sufficient instrument to recover the dues of the agricultural loan by invoking the mortgage properties for recovery of the loan. Further there is nothing on record to show the malafide intention of the Complainant/appellant for non-payment of the dues against agricultural loan. It is also admitted that the said Fixed Deposit receipts were standing in name of the Complainant/appellant alone irrespective of the agricultural loan borrowed by the appellant alongwith Dukhi Biswas, neither the said fixed receipts were pledged no kept on lien against the said agricultural loan. The exercise of the power of general lien by the bank, in respect of F.D.Rs. which come into the possession of Section 171 of the Contract Act does not apply in the instant case inasmuch as that the agricultural loan was more than fully secured by the mortgage of 10 acres of agricultural land worth of Rs. 3 lakhs and the tractor itself worth of more than the dues of the bank. Accordingly, in view of the said position of express contract between the parties creating a lien or security over 10 acres of agricultural land worth of Rs. 3 lakhs and mortgage of the tractor against the agricultural loan would exclude operation of the statutory general lien under Section 171 of the Contract Act. The respondent/bank had an express contract by way of counter guarantee providing the method of reimbursement by invoking the properties in pledge, the said contract would automatically exclude operation of the statutory general lien under Section 171 of the Contract Act. Moreover the agricultural loan obtained by both the Complainant/appellant and one Dukhi Biswas and the Fixed Deposit receipts of Rs. 30,000/- each for matured value of Rs. 44,035/- each standing in name of the Complainant/appellant alone cannot be linked up with each other. On the first instance, the respondent/bank can invoke its power of general lien over the fixed/deposit receipts standing in the same of appellant alone, had not the agricultural loan been recovered from the mortgage properties of 10 acres of land worth Rs. 3 lakhs and the tractor sold in auction through due process of law, as per provisions of Section 171 of the Contract Act, otherwise not.

WE, therefore, do not agree to the contentions raised by the respondent/bank that it can invoke the power of general lien over the ''Fixed Deposit receipts belonging to the Complainant/appellant place for the benefit of the grand-daughter as per provisions of Section 171 of the Contract Act. The decision cited by the learned District Forum, Calcutta in the case of Branch Manager, Canara Bank v. P. Moovendam reported in II (1992) CPJ 801 in dismissing the complaint-petition is not proper application of the ratio of the said case because in the said case, the borrowers alone pledged some jewels in security for his loan of Rs. 6,500/- which he repaid with interest but the bank refused to return the jewels on the ground that the Complainant/appellant had not discharged the previous loan lying with the bank where there was no security at all. Accordingly the bank applied the power of general lien on the said jewels on account of the loan, previously taken by the Complainant/appellant. In the instant case, 10 acres agricultural land worth Rs. 3 lakhs and the tractor have been pledged and/or mortgaged with the respondent/bank which are still lying at the disposal of the bank and the loan incurred by two persons namely Complainant/appellant and one Dukhi Biswas. Therefore, the bank can easily recover the dues against the agricultural loan out the mortgage properties at its disposal at any time but under no circumstances the F.D.Rs. of the Complainant/appellant one of the borrowers of the agricultural loan cannot be attached by the Bank in such arbitrary and wrongful manner without exhausting the mortgage properties laid at its hand. The arrangement for payment of the arrears of the agricultural loan by installment and firm of such installment was suggested to be deducted from the proceeds of the F.D.Rs. standing in the name of the Complainant/appellant does not empower the respondent-bank to attach the F.D.Rs. of one of the borrowers and adjust it from the proceeds of the F.D.Rs. standing in the name of said one of the borrowers. Thus the appeal succeeds on contest. We, therefore, set aside the order and judgment dated 9.1.95 passed by the learned District Forum, Calcutta in C.D.F. Case No. 2872/94 and direct the respondent/bank to release the sum of Rs. 88,070/- after adjustment of statutory interest of Rs. 5,000/- on account of the agricultural loan out of the proceeds of the said fixed deposit receipts as suggested by the Complainant/appellant. The respondent/bank would also consider to accept the dues against the agricultural loan by installments as suggested by the Complainant/appellant, or the respondent/bank is at liberty to invoke the mortgage properties for liquidation of its agricultural loan as per law. However, considering the facts and circumstances of the case we are not inclined to award any compensation or cost to the Complainant/appellant in the instant case. Appeal allowed.