Telangana High Court
Smt. Mulkala Thirumala Devi vs The Union Of India on 29 January, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
WRIT PETITION No. 29896 OF 2023
ORDER:
Heard Sri G. Rajasekhar Reddy, learned counsel for the petitioner and Sri M.P. Sanjay, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India for respondent No.4.
2. The petitioner approached this Court with the following prayer :
" .....to issue a Writ, Order or Direction, particularly one in the nature of Writ of Mandamus, declaring the action of the Respondents more particularly the action of the 4th Respondent, in creating Genera Den Bankers Lien Charge, whereby withholding the insurance death benefits of the petitioner's deceased Husband, Late Sri Mulkala Durgalah, an Rs.9.59,024/- credited to Petitioner's Saving Bank Account bearing A/C. No:
399990991847, held with State Bank of India (SBI), Garimella Branch (Branch Code: 20744), Mancherial, Mancherial District, being nominee of the 5 LIC policies, bearing Nos. (1) 807309719, (2) 807300810, (3) 807306136, (4) 684572823 and (5) 6845922768, for recovery of Personal Loan bearing PL A/c. No. 40979951591, State Bank of India (SBI), Padmaraonagar Branch, (Secunderabad), availed by the deceased husband of the Petitioner, wherein the Petitioner is neither a party nor a guarantor to the Loan agreement as 2 illegal, arbitrary, irrational, contrary to the provisions of CPC, 1908 and the Indian Contract Act, 1872 and unconstitutional, being violative of Articles 14, and 21 of the Constitution and consequently direct the 4th Respondent, to henceforth release the amount of Rs.9,59,024/-
withheld in the petitioner's Saving Bank Account, bearing A/c. No: 399890991847, held with SBI, Garimela Branch (Branch Code: 20744), Mancherial, Mancherial District, and pass such other order or orders as this Hon'ble Court may deem fit and proper"
3. The counter affidavit filed by the respondent No.4 in particular Para Nos.3 and 9 read as under:
"In a reply to the para No.2 of the Writ Petition that the Writ Petitioner is making false allegations against the respondents more particularly against the respondent No.4 the action before this Hon'ble Court. I submit that it is true that the respondent No.4 is created General Lien/Bankers Lien/Charge/withholding the insurance death benefits of the petitioners deceased husband, Late Mulkala Durgaiah for an amount of Rs.9,59,024/- held with State Bank of India, Garimella Branch (Branch Code: 20744), Mancherial, Mancherial District, she being nominee and legal hear of the 5 LIC Policies bearing Nos (1) 807309719, (2) 807300810, (3) 8073061316, (4) 3 684572823, (5) 6845922768 for recovery of Personal Loan bearing PL A/c No. 40979951591, State Bank of India, Padmarao Nagar Branch, Secunderabad availed by the deceased husband of the petitioner. The respondent bank submits that it is true that petitioner is neither a party nor a guarantor to the said Loan Agreement but she is wife/legal heirs of Late Mulkala Durgaiah, respondent bank submit that she being a wife/legal heirs of Late Mulkala Durgaiah she is entitle to repay the debts of her deceased husband.
9. In a reply to the para No. 8 of the Writ Petition, the respondent No.4 bank submit that it is true that the respondent No-4 has created a lien/withheld the Insurance death benefits, amounting to Rs. 9,59,024/- created to the said SB account. The respondent No-4 bank submit that it is true that statement does not denote as to creation of Lien, as per bank police it does not denote creation of Lien in the statement of account. The respondent No-4 bank submit that once the Lien is created the no payment will be withdrawn nor it can be paid in the form of EMis or any other payments. The respondent No-4 bank submit that it is true that an amount of Rs. 9,59,024/- is withheld for payment of the personal 4 loan availed by the petitioner's deceased husband at SBI, Padamarao Nagar Branch, Secunderabad. The respondent No-4 bank Submit that as per "Personal Loan Agreement" clause No. 12 (iii) it is clearly states that "The Bank shall have a paramount right to set off and in exercise of the Bank's general lien under law, the Bank shall also have a paramount right of lien on all monies, accounts securities, deposits, goods and other assets and properties belonging to the Borrower or standing to the Borrower's credit (whether singly or Jointly with any other person(s) which are or may at any time to be with or in possession or control of any breach of the Bank for any reason or purpose whatsoever"
Clause 14 states that "This agreement shall operate as a continuing security for all monies, indebtedness and liabilities aforesaid due by the Borrower to the Bank". The respondent No-4 bank submits that as per Section 171 of Indian Contract Act".
4. It is the specific case of the petitioner that petitioner is not a party to the contract and she is not a borrower from the respondent bank. There is no contract between the petitioner 5 and the respondent bank. As per Section 60 of the Code of Civil Procedure, 1908, respondent cannot seek lean over the insurance death benefits and the same is not legally permissible.
5. Learned counsel appearing on behalf of respondent bank placing reliance on para No.9 of the counter affidavit and also the Judgment of the High Court of Bombay in the case of Central Bank of India Vs. Keshaorao Narayanarao Patil Alias Babasaheb Dhabekar, dated 05.05.2004 reported in 2004 Law Suit (Bom) 573 and in particular referring to para Nos.10 and 11 of the said Judgment contended that the respondent Bank is entitled to proceed against the petitioner. Para 10 and 11 of the said Judgment reads as under:
10. In State of Madhya Pradesh's case A.I.R. 1964 M.P. 231 (supra), the Division Nebnch of High Court, Gwalior, M.P. High Court held that:6
"When two persons have certain accounts and monies are paybale by each to the other they are both entitled to mutual adjustments of the monies provided they are really due and recoverable. The distinction between payment and adjustment is that payment is made to the creditor while the adjustment is made by the debtor himself. Although it is not called 'payment'in common parlance yet it undoubtedly partakes the character of payment. At all events, it cannot be called a claim for set off, nor can it be said to be a counter claim as the defendant does not seek enforcement of his claim, and therefore, Court fee is not due. On general principles a person is entitled to pay to himself that amount which is due to him from another if he has in his hand monies belonging to that other, provided that his dues are legally recoverable. Although that question will be adjudged by the Court of law when it arises, he is not obliged to sue for the recovery of the money which he is already in possession of".
11. This Court may usefully refer the decision of the Division Bench of Gujarat High Court in the case of (Shivam Construction Co., Ahmedabad and others Vs. Vijaya Bank, Ahmedabad), AIR 7 1997 Gun. 24, wherein it has been observed in para Nos. 31, 32, 33, 34 and 35 as under ;
"The doctrine of "set-off by the bank has been evolved since long. There is a definite purpose and philosophy behind it. It has long roots. In (Roxburghev. Cox), 1881 (17) Ch. D. 520, the Court of Appeal had taken the view that even if it is taken for granted that bank's lien applied money paid to the account of the creditor still the proper doctrine of set off under which the bank is authorised to claim an amount for set off of the debts owed by the customers. The aforesaid decision was again affirmed in another case reference (Re-moris Conveys v. Moris), 1922 (1)
1. R. 81, where a similar view has been taken with regard to set-off for the money which is owed to them by retaining the money belonging to the debtor in a particular account. The above view has also been affirmed in (National Westminster Bank Ltd. V. Halesowen Presswork and Assemblies Ltd.,), 1972 (1) All. E.R. 641 by the house of Lords in which the principle of set off has been expounded and upheld in connection with the bank's right to realize their debts from a particular debtor whose money was received by the banker in the course of business as such. In 8 the present case, it is beyond any doubt that the appellants who had enjoyed over draft facilities on the securities of the FDRs failed to discharge their duties and committed defaults, went on for overdrawals. Therefore, under the terms of loan as well as under the right of "set off and also under the general banker's lien, the plaintiff bank was empowered and entitled to transfer and appropriate even by liquidation the FDs towards their over-draft account of the defendants. On all counts it cannot be said even for a moment that the action of the plaintiff-bank in liquidating the FDRs for purpose of appropriation towards bank's dues was, in any way, unjust, improper or illegal".
6. This Court opines that the judgment relied upon by the learned counsel for the respondent Bank has no application to the facts of the present issue. The said Judgment relied upon by the Respondent Bank pertains to a case pertaining to adjustment of loan in default of payment of arrears of rent pertaining to premises under Tenancy with a Bank and landlord taking loam from the bank but not repaying the loan amount. This Court opines that the said judgment relied upon 9 by the learned counsel for the respondent-Bank has no application to the facts of the case and taking into consideration Section 60 (kb) of the Code of Civil Procedure, 1908, which clearly stipulates that all moneys payable under a policy of insurance on the life of the judgment debtor shall not be liable to attachment or sale, This Court opines that the respondent bank is not entitled to attach the insurance benefits of the petitioner. This Court opines that the petitioner is entitled for the relief, as prayed for.
7. Taking into consideration of the above facts and circumstances of the case, the writ petition is allowed, as prayed for. There is no order as to costs.
Miscellaneous petitions, if any, pending in this writ petition, shall stand closed.
__________________________ MRS JUSTICE SUREPALLI NANDA 29th January, 2024.
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