Jammu & Kashmir High Court - Srinagar Bench
Mohammad Maqbool Kunash vs Jammu And Kashmir Bank Ltd on 7 June, 2012
IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR CIMA No. 91 of 2011 CMP No. 437 of 2011 Mohammad Maqbool Kunash Petitioners Jammu and Kashmir Bank Ltd. Respondents !Mr. Zahoor A. Shah, Advocate ^Mr. Javed Iqbal, advocate Honble Mr. Justice Mohammad Yaqoob Mir, Judge Date:07/06/2012 : J U D G M E N T :
1. Impugned is the order dated 27.08.2011, in terms whereof, grant of interim injunction has been declined by the Court of Additional District Judge (Bank Cases), Srinagar.
2. Allegedly appellant (plaintiff) had availed various loan facilities from the respondent bank. An amount of Rs.17,42,143,47/ along with interest on account of various credit facilities availed by the appellant has remained due as the appellant had made willful default in repaying the amount.
3. Appellant had opened account under A/C No.0048040100013984 and has deposited Rs.7,00,000 (seven lacs) in the said account which is used by the appellant for promoting his business. The respondent bank has not permitted the appellant to operate the account which forced him to file a suit for declaration and injunction. Alongside suit, an application for grant of interim relief has been filed which has been rejected in terms of impugned order.
4. The respondent bank projected before the trial court that the appellant is a defaulter so in exercise of power vested in the bank right of lien has been exercised.
5. It is contended by the learned counsel for the appellant that the right of lien vis-`-vis saving account of the appellant could not be exercised as Section 171 of the Contract Act is not applicable whereas in opposition learned counsel for the respondent bank projected that in terms of para 22 and 24 of the Loan Agreement the bank has exercised right of lien as permissible under Section 171 of the Contract Act.
6. Prima facie contention of the learned counsel for the respondent bank has prevailing force. In this connection it shall be quite appropriate to refer to various judgments as have been relied upon in support of this contention by learned counsel for the respondent bank.
7. Section 171 of the Contract Act clearly provides that in absence of the express contract to the contrary, the provision has its applicability.
8. Referring to para 22 and 24 of the Loan Agreement, pursuant to which appellant had availed the facilities, it is clear that there is an express contract authorizing the bank to have a general lien and the right of set off for all or any balance due to the bank. in order to make it clear it shall be quite appropriate to quote para 22 and 24 of the Loan Agreement:
22. That the bank shall have a general line and the right of set off for all or any balance/s due to the bank in respect of all or any account/s upon or over all or any security/ies for the time being held by the bank and all or any such security/ies or account/s or credit balances in whatever form that may come into the hands of the bank and nothing contained herein or any other documents executed by and between the borrower and the bank shall be construed to exclude the banks general lien and/or the right of set off for any balance due to the bank over any security for the time being held.
24. That the borrower confirms and declares that the bank shall be authorized to appropriate all or any payment made by the borrowers or received by the bank notwithstanding anything contrary contained in the contract act or any other law or the time being in force or agreement or any other documents/s executed by and between the borrower and the bank whether or not the recovery thereof has become due or time barred under any law of limitation for the time being in force.
9. In the judgment reported in AIR 2000 Karnt. 201, it has been held that Section 171 of the Contract Act is clear and categoric that unless a contract to the contrary is established by the plaintiffs, the banks right of lien will have to be accepted.
10. Applying the said principle to the present case, prima facie it is clear that the appellant, in view of para 22 and 24 of the Loan Agreement, cannot claim anything contrary to the banks right of lien.
11. It shall be quite appropriate to quote with advantage as to what ratio has been discerned from the judgments reported in AIR 1955 Punjab 250, AIR 1956 Punjab 118 and AIR 1946 Nagpur 114, as quoted in judgment reported in AIR 1990 Ker. 223:
When moneys are held by the bank in one account and the payer in respect of these moneys owes the bank on another account, the bankers lien gives the bank a charge on all the monies of the payer in its hands, so that they may be transferred to whatever account the bank chooses, to set off or liquidate the debt.
12. From the facts and the position of law as referred above, prima facie right of lien exercised by the respondent bank, in view of Section 171 of the Contract Act, cannot be found fault with, therefore, trial court has considered the matter in its right perspective, so does not call for any interference. Appeal accordingly found without merit is dismissed. Observations made hereinabove or the observations made by the trial court while passing the order impugned shall not influence the mind of the trial court while deciding the suit finally.
13. Trial court record along with copy of the order be send back forthwith to the trial court where the parties shall appear on 16.06.2012.
(Mohammad Yaqoob Mir) Judge Srinagar 07.06.2012 Mohammad Altaf