Orissa High Court
Ghanashyam Kampa vs The Sr. Manager on 31 March, 2022
Author: Arindam Sinha
Bench: Arindam Sinha
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.36127 Of 2021
(Through hybrid mode)
Ghanashyam Kampa .... Petitioner
Mr. P. Panigrahi, Advocate
-versus-
The Sr. Manager, Canara Bank, .... Opp. Party
BBSR
Mr. S.K. Mishra, Advocate
CORAM: JUSTICE ARINDAM SINHA
ORDER
Order 31.03.2022 No. 4. 1. Mr. Panigrahi, learned advocate appears on behalf of petitioner
and relies on judgment dated 9th August, 2017 of a Division Bench of Madras High Court in W.P.(MD) no.12613 of 2016 ( M. Shanthi v. Bank of Baroda). He submits, in the judgment several views of different High Courts and declaration of law of the Supreme Court on, inter alia, section 171 in Contract Act, 1872 were discussed. He submits, in year, 2011 credit facility of cash credit was obtained upon creating security of stock. Subsequently, a separate sanction for housing loan was made and security for repayment of that was by deposit of title deed in respect of the property. According to him, his client took the first loan for business and the second loan for house. For the house, the title deed was deposited. Page 1 of 1
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2. It appears from M. Shanti (supra) there were several views expressed. Some of them are:-
(i) Where there is credit facility extended upon security obtained for repayment and the bank has a right to recover under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, provisions therein will be override provisions in the Contract Act.
(ii) A specific contract will be a contract to the contrary that will militate against the banker's general right of lien under section 171 in the Contract Act.
(iii) Bank cannot exercise general right of lien to secure any other liability of mortgagor, when the deposit was with intention to secure a particular loan transaction.
(iv) It is doubtful, whether in exercise of general right to retain title deed, the bank can being the property to sale, for recovery of some debt in connection with a different transaction, not covered by the mortgage.
3. Mr. Mishra, learned advocate appears on behalf of the bank and submits, letter evidencing deposit of title deed in respect of the housing loan is dated 28th December, 2012. The cash credit facility was granted earlier on security of stock. There is no stock.
4. The bank is granted adjournment to file additional affidavit Page 2 of 3 // 3 // disclosing the memorandum of deposit of title deed. Bank may also disclose creation of security regarding earlier cash credit facility granted to petitioner. Advance copy of the affidavit must be served to petitioner. The affidavit be filed on adjourned date.
5. List on 7th April, 2022.
(Arindam Sinha) Judge Sks Page 3 of 3