Madras High Court
State Bank Of Mysore vs Lakshmi Construction P. Ltd. And Ors. on 14 June, 1997
Equivalent citations: [2001]103COMPCAS258(MAD)
JUDGMENT N. Arumugam, J.
1. The suit is for the recovery of a sum of Rs. 15,73,113.19 with further interest at 18 per cent. per annum on the said amount which may accrue from the date of plaint till the date of payment from defendants Nos. 1 to 4 and also the cost of the suit and that in case of default, the plaint schedule property to be sold through court and the proceeds after defraying the expenses of the sale applied in and towards the payment of the said principal, interest and costs and if such proceeds shall not be sufficient for the payment of the full amount, such defendants may be ordered to pay to the plaintiff the amount of the deficiency with interest thereon at 18 per cent. per annum with quarterly rests until realisation and without prejudice to the rights of the plaintiff to proceed against defendants Nos. 1 to 4 and also to direct the plaintiff to appropriate the proceeds of the deposits made by the fifth defendant towards the decree in Clause 1 above with necessary orders.
2. The substratum of the plaintiff's case as gathered from the plaint is stated hereunder :
The plaintiff is one of the subsidiaries of the State Bank of India, a nationalised banking institution, has its registered office at Bangalore and its branch at Santhome, Mylapore, Madras. It is represented by its branch manager. The first defendant is a private limited company, registered under the Companies Act, 1956, and having its registered office at No. 907, Poonamallee High Road, and branch at 140, Royapettah High Road, Mylapore, Madras, represented by its managing director, L. Narasimhalu. Defendants Nos. 2 to 4 are the directors of the first defendant-company and defendants Nos. 5 and 6 are the guarantors for and on behalf of the first defendant-company.
3. The first defendant, a firm of contractors, doing civil engineering works, during" 1983 represented that they were awarded a contract to construct a hotel complex at No. 140, Royapettah High Road, Madras-600 004. on an estimated value of Rs. 2 crores and the contract had to be completed within a period of 2 years and hence applied to the plaintiff-bank on December 15, 1983, for credit facilities for their construction work up to the limit of Rs. 10 lakhs. After due deliberations and declarations made by the first defendant, the bank on January 31, 1985, agreed to advance a loan and also sanctioned a credit limit of Rs. 10 lakhs on the security of hypothecation of stocks, building materials, etc. and also by obtaining guarantees from defendants Nos. 2 to 4 herein together with additional securities. Defendants Nos. 1 to 4 have signed the sanction order, thereby agreeing to all the terms and conditions by executing the following documents on that day:
(i) A demand promissory note for Rs. 10 lakhs executed by the first defendant in favour of defendants Nos. 2 to 4 for Rs. 10 lakhs promising to repay the said sum with interest at 1.5 per cent. over the State Bank advance rate with a minimum of 18 per cent. per annum with quarterly rests. On the same date, defendants Nos. 2 to 4 endorsed the said promissory note in favour of the plaintiff;
(ii) Defendants Nos. 2 to 4 executed an agreement of guarantee to the extent of Rs. 10 lakhs given on loan to the first defendant by the plaintiff thereby guaranteeing the payment of the amount due by the first defendant personally ;
(iii) The first defendant executed a hypothecation agreement thereby hypothecating the stock-in-trade for the loan ;
(iv) A letter written by defendants Nos. 2 to 4 as guarantors thereby authorising the bank to appropriate any amount of security available with the bank towards the dues to the bank and the guarantee to remain in force until the entire amount due to the bank is fully realised ;
(v) Two agreements dated January 31, 1985, executed by the first defendant thereby hypothecating the goods of the first defendant as well as the debits and assets ;
(vi) The fourth defendant as guarantor deposited the title deeds of her property bearing S. No. 256/1A and 257/3 at Gummidipoondi by delivering the title deeds and the property to the bank to cover the loan of Rs. 10 lakhs.
4. The plaintiff-bank, accordingly, granted the loan of Rs. 10 lakhs on the basis of the guarantee of defendants Nos. 2 to 4 and upon the documents executed by them. The accounts of the first defendant became irregular and sticky and several letters were written by the bank calling upon the defendants to pay the amounts due to the bank. The fifth and sixth defendants had made certain deposits with the plaintiff and gave a lien on those deposits by letter dated April 19, 1985, and they have been made as parties to the suit to enforce the lien and appropriate the proceeds of the deposits for amounts due by the first defendant.
5. After several letters written for payment of the dues, a notice of demand through the lawyer of the plaintiff was also given to defendants Nos. 1 to 4 on October 8, 1987, but no reply was given to it by either of the defendants even after their acknowledgement in full. Since the amount due is calculated according to the terms of sanction and the documents executed, interest is capitalised every three months and the amount due on the date of plaint is Rs. 15,73,119. The plaintiff is entitled to claim interest at 18 per cent. per annum with quarterly rests. Since the interest is capitalised up to the date of plaint, future interest is also claimed at 18 per cent. per annum with quarterly rests.
6. Defendants Nos. 1 to 4 have confirmed their liability on December 31, 1986, and the said confirmation letter is also relied on by the plaintiff. The fourth defendant has created mortgage by deposit of title deeds in respect of property bearing S. No. 256/1A and 257/3 at Gummidipoondi and the plaintiff is seeking a mortgage decree by the sale of the mortgaged property on the following particulars : The plaintiff states that the fourth defendant as guarantor and for the money due by the first defendant to the plaintiff, deposited the title deeds of the property referred to in the schedule of the plaint on January 31, 1985, later in the day. The plaintiff has caused a search to be made in the office of the Registrar of Assurances of the Sub-District in which the said property is situated and is not aware of any encumbrances on the said property other than those herein mentioned or of any person possessing an interest in the said property other than the fourth defendant who is made a party to this suit.
7. Basing the cause of action on the abovesaid averments, the reliefs mentioned supra are being asked for in the suit, by way of a decree to be passed against the defendants.
8. The suit was resisted by and on behalf of defendants Nos. 1 to 4 by filing a written statement under Order 8, Rule 1 of the Code of Civil Procedure, 1908, and Order 5, Rule 1 of the Original Side Rules, contending, inter alia, as follows :
The suit with the relief claimed to enforce a mortgage in respect of a property situated in Gummidipundi, which is outside the ordinary original civil jurisdiction of this court is not maintainable and is liable to be rejected and in the result, the plaint is liable to be returned to the plaintiff for representation to the appropriate court. It is also submitted that these defendants are making arrangements for the sale of the schedule-mentioned property and undertake to pay the sale proceeds after release is given by the plaintiff-bank. As and when the sale consideration is received, these defendants are willing to execute the sale deed in favour of the purchasers and the plaintiff-bank must give a release deed in respect of the portion sold and get the money directly from the purchasers. Therefore, it was prayed that the schedule-mentioned property may be permitted to be sold by these defendants and the plaintiff-bank can receive the money from the purchasers and release the property.
9. The fifth and 6th defendants have filed their written statements separately and, inter alia, contended that the suit as framed is not maintainable in law, it is liable to be dismissed in limine in so far as the fifth and sixth defendants are concerned for want of cause of action and the claim of the plaintiff that a lien on deposits made to them had been created by a letter dated April 19, 1985, is unsustainable and the plaintiff cannot in law enforce such letter, particularly, on the plaint allegations and that the cause of action for the first defendant arose by advances made on January 31, 1985, and there was no agreement or declaration of lien in favour of the bank by these defendants with reference to such a transaction on January 31, 1985. They further contended that the letter dated April 19, 1985, does not create any lien and cannot create such a lien in the absence of specific undertaking to create a lien in their favour and as such the suit against these defendants on the basis of lien is liable to be dismissed with exemplary costs.
10. It was also contended that even if such an interpretation is placed on the letter dated April 19, 1985, the same is not enforceable in law in view of the fact that the deposits are admittedly one of non-resident account, liable for specific permission and clearance by the Reserve Bank of India for being dealt with and as such any contract contravening the statutory bar under the Reserve Bank of India Rules and Regulations regarding nonresident account with nationalised banks is liable to fall within the mischief of Section 23 of the Indian Contract Act, 1872, and as such opposed to public policy and cannot be enforced. However, without prejudice to the aforesaid contention, it was stated that a reading of the plaint would show that there is no averment indicating how these defendants could have been roped into this transaction at a later date on April 19, 1985, when the entire transaction for advancing the moneys had been decided upon by several discussions and negotiations with defendants Nos. 1 to 4. It was also contended that a very bald allegation of a letter dated April 19, 1985, creating a lien in their favour for the deposits made would not create in law any right of lien for enforcement in respect of the alleged transaction of the first defendant.
11. It was also contended that the plaintiffs are fully aware of the fact that these defendants are the residents of Colombo-7 in Sri Lanka and as such any contract which they are liable to make as non-resident is liable to be under the specific permission of the Reserve Bank of India and in the absence of it, the contract is absolutely void and cannot be enforced at all. Therefore, the alleged letter dated April 19, 1985, is nothing short of a void contract and cannot be enforced as against these defendants apart from the fact that there is no lien or charge created with reference to these non-resident accounts and that the question of appropriation of these deposits for failure of payment of any decree amount by defendants Nos. 1 to 4 would not arise as the letter would show that the deposits would be allowed to remain with the bankers and not withdrawn prematurely and that in the said event, the right to appropriate the deposits against non-payment has not been indicated or allowed for the bank to assert by way of decree against these defendants. It was also contended that the plaintiffs have not given any details about the deposits which they hold and the nature of the deposits on the date of April 19, 1985, and that as such, no blanket decree for enforcement of a lien could follow without any specifications of the particulars of deposits and for want of deposits even that prayer for lien is liable to be rejected and that in any event there is absolutely no contractual liability between these defendants and the plaintiff for fastening a commitment in regard to the suit claim and as such the suit as against these defendants is highly speculative and liable to be dismissed with exemplary costs. The alleged cause of action against these defendants is denied. Even the prayer is made only against the fifth defendant and not against the sixth defendant, which would show clearly that the sixth defendant, is an unnecessary party and that the suit against the fifth defendant is liable to be dismissed with exemplary costs.
12. Upon the above pleadings, this court has settled the following issues for trial :
(1) Whether this court has got jurisdiction to try the suit ?
(2) Whether there is any cause of action disclosed as against the fifth and sixth defendants ?
(3) Whether the letter dated April 19, 1985, written by the fifth and sixth defendants is valid and enforceable for the reasons stated in the written statement ?
(4) Whether the sixth defendant is a proper and necessary party to the suit ?
(5) Whether the plaintiff is entitled to a decree as prayed for ?
(6) To what other reliefs, are the parties entitled ?
13. Besides the examination of P.W.-1, 18 documents exhibit P-1 to exhibit P-18, have been marked to substantiate the plaintiff's claim, which are the following :
Exhibit P-1, copy of letter from first defendant to plaintiff dated December 15, 1983.
Exhibit P-2, dated January 31, 1985, is the sanction order from plaintiff to defendant (copy).
Exhibit P-3, dated January 31, 1985, is the promissory note executed by the first defendant in favour of defendants Nos. 2 to 4.
Exhibit P-4, dated January 31, 1985, is the endorsement in exhibit P-3 on the back side by defendants Nos. 2 to 4.
Exhibit P-5, dated January 31, 1985, is the guarantee letter by defendants Nos. 1 to 4 to plaintiff.
Exhibit P-6, dated January 31, 1985, is the hypothecation agreement by the defendants to plaintiff.
Exhibit P-7, dated January 31, 1985, is the stock statement as on January 31, 1985, given by the first defendant to the plaintiff.
Exhibit P-8, dated January 31, 1985, is the agreement for cash credit hypothecation of debts and assets.
Exhibit P-9, dated January 31, 1985, is the agreement for advance against hypothecation of goods.
Exhibit P-10, dated January 31, 1985, is the revival letter from defendants to plaintiffs-bank.
Exhibit P-1l, dated February 14, 1987, is the revival letter in Form-II from defendants to plaintiff.
Exhibit P-12, dated February 14, 1987, is the revival letter in Form-I from defendants to plaintiff.
Exhibit P-13, dated December 31, 1986, is the confirmation letter from defendants to plaintiff.
Exhibit P-14, dated March 27, 1987, is another confirmation letter from defendants to plaintiff.
Exhibit P-15, dated January 31, 1985, is the true extract from the deposit register by the plaintiff-bank.
Exhibit P-16, dated February 4, 1988, is the encumbrance certificate from August 5, 1984 to February 1, 1988.
Exhibit P-17, Statement of Account of Lakshmi Constructions (Pvt.) Limited (Defendant) issued by the plaintiff's bank.
Exhibit P-18, dated April 19, 1985, is the letter from Mrs. and Mr. V. Balasubramaniam to the manager, State Bank of Mysore, Madras-600 004. (plaintiff), and no oral evidence was let in on behalf of the defendants nor any documentary proof, was filed.
14. Findings on point No. 1 : Though in the pleadings of the written statement the question of jurisdiction of this court has been raised and consequently, the above issue number one has been framed, there was no evidence let in on behalf of either side upon this issue nor any attempt or argument was made on their behalf and it seems that either party to the proceedings have no interest to canvass this issue. Accordingly, I do not propose to give any finding upon this issue as the plaint has been duly numbered by this court and the parties have agitated. In the context of the above position, the first issue need not arise for any kind of adjudication. Accordingly, I answer this issue in favour of the plaintiff and against the defendants.
Findings on issue numbers 2, 3, and 4.--It is noticed that on January 4, 1991, defendants Nos. 1 to 4, though have filed a written statement, however, submitted to a decree by stating that the bank must proceed against the properties mortgaged in the first instance if any execution is levied and that the time for payment is one year from January 4, 1991. Thus, it is seen that defendants Nos. 1 to 4 have not contested the suit though filed the written statement, but submitted to the decree.
15. The case of the plaintiff is that the first defendant is a private limited company registered under the Companies Act, 1956, and having its registered office at No. 907, Poonamallee High Road, Madras and branch at 140, Royapettah High Road, Mylapore, Madras-4. The description of defendants Nos. 2 to 4 in the first defendant-company has not been given nor indicated in the plaint in any form. Defendants Nos. 5 and 6 in the suit alone are the real contestants and they have resisted the suit by filing a separate written statement. According to the plaintiff, the first defendant is a firm of contractors doing civil engineering works during 1983 and they were badly in need of money in connection with a contract awarded to them to construct a hotel complex at No. 140, Royapettah High Road, Madras, on an estimated value of Rs. 2 crores and that the said contract had to be completed within a period of two years. They had also applied to the plaintiff-bank on December 15, 1983, for the credit facilities for their construction work up to a limit of Rs. 10 lakhs and that after several deliberations and declarations by the first defendant on January 31, 1985, the plaintiff agreed to advance a loan by sanctioning a credit limit of Rs. 10 lakhs, to the first defendant on the security of hypothecation of stocks, building materials, etc., and also by obtaining guarantees from defendants Nos. 2 to 4 herein together with additional securities. It has been further claimed that the said loan was sanctioned on January 31, 1985. Defendants Nos. 1 to 4 signed the sanction order, thereby agreeing to all the terms and conditions stipulated in the sanction order. The application dated December 15, 1983, by the first defendant-company to the bank for availing of the financial assistance has been marked as exhibit P4 and the loan sanction order dated January 31, 1985, has been marked as exhibit P-2. Pursuant to exhibit P-2, the sanction order, the first defendant executed a promissory note in favour of defendant Nos. 2, 3 and 4, who in turn endorsed the promissory note in favour of the plaintiffs-bank and they have been marked as exhibit P-3 and exhibit P-4, respectively. Besides the above, defendant Nos. 2 to 4 have also executed a guarantee for the redemption of the loan by the first defendant which has been marked under exhibit P-5. The first defendant has also executed an agreement of hypothecation which has been marked as exhibit P-6. The stock statement given by the first defendant on the date of borrowing has been marked as exhibit P-7. The hypothecation deeds executed by the first defendant in respect of the movables and fixtures has been produced and marked as exhibit P-8 with exhibit P-9, the acknowledgement for having executed the documents referred to above. Then, defendants Nos. 1 to 4, have executed a letter of revival of debts under exhibit P-11. The confirmation letters given by defendants Nos. 1 to 4 for the balance amount due from them have been marked under exhibit P-13 and exhibit P-14, and exhibit P-15 is the extract of the deposit register of the bank showing that the title deeds of the property belonging to the fourth defendant were deposited into the bank as security for the due repayment of the loan amount. The encumbrance certificate taken for the abovesaid property is marked under exhibit P-16 and the statement of accounts as on the date of the suit relating to the suit claim was marked under exhibit P-17.
16. Defendants Nos. 5 and 6 according to P.W.-1 and the plaintiff, have their foreign currency non-resident account and they have executed a letter on April 19, 1985, which has been marked under exhibit P-18 and in which, it was mentioned 37, 811.71 US $ and 4,365 sterling was made as a lien for the plaintiff-bank against the loan advance to defendants Nos. 1 to 4. This letter according to the plaintiff was taken as a real letter and as per the contents of this letter defendants Nos. 5 and 6 shall not withdraw any amount from the said deposit. P.W.-1 further claims that the banks are empowered to grant loans on interest under the directions of the Reserve Bank of India without their permission only up to Rs. 2 lakhs. He claims that this letter is not opposed to public policy or prohibited by the Indian laws. P.W.-1 further states that the plaintiff had not obtained any permission from the Reserve Bank of India to file the suit against defendants Nos. 5 and 6 or to proceed against them with the deposits above referred to in their name and the suggestions put to him on behalf of defendants Nos. 5 and 6 that the plaintiff's claim against defendants Nos. 5 and 6 on the basis of exhibit P-18 was totally against the norms and Section 47 of the Foreign Exchange Regulation Act and that exhibit P-18 did not at all create any lien in favour of the bank have been denied. Thus, it is noticed that in so far as the claim made by the plaintiff in the plaint as well as the oral evidence through P.W.-1 and the documents of hypothecation, loan, promissory note and the revival letters covered under exhibit P-1 to exhibit P-17 are concerned, there was no controversy or dispute existing among the parties herein and that as a result of which, though defendants Nos. 1 to 4 have filed their written statement but submitted to the decree by making a special endorsement on the plaint and that in their separate written statement also they had not disputed the above documents executed by them and their liability due to the plaintiff and besides, they had not adduced any contra evidence on their behalf, either oral or documentary. It is in this context, the suit claim made by the plaintiff against defendants Nos. 1 to 4 is to be decreed in full as claimed.
17. But, however, basing upon the letter dated April 19, 1985, marked under exhibit P-18, defendants Nos. 5 and 6 alone have resisted the claim of the plaintiff by contending that the said letter was not meant for creating any lien in favour of the plaintiff and that they are unnecessary parties and that letter exhibit P-18 is directly hit by Section 47 of the Foreign Exchange Regulation Act as well as Section 23 of the Indian Contract Act and that inasmuch as the said defendants Nos. 5 and 6 had not created any lien nor received any consideration from the plaintiff, the plaintiff cannot file the suit against these defendants and the one filed by them is liable to be rejected in toto. As I have observed already, the suit was contested only by these defendants Nos. 5 and 6 contending that these defendants are foreign nationals and have their foreign currency non-resident account with the Reserve Bank of India and to create a lien thereupon by means of a contract or otherwise, permission from the Reserve Bank of India is required, otherwise, the contract, if any, is void. Further, nexus with these defendants Nos. 5 and 6 to the suit transaction was not given in the plaint as well as in the evidence and that so much so, the suit has no cause of action against these defendants.
18. To appreciate the above point as to whether the letter dated April 19, 1985, defendants Nos. 5 and 6 are enforceable and valid in law and adjudicate thereupon, the contents of the said letter have to be necessarily adverted to, which runs as follows :
"From Mrs. and Mr. V. Balasubramaniam 24, Gregorys Road, Colombo 7, Sri Lanka.
Local address (for communications) 276 'C' J. J. Road, Madras 600 018.
To The Manager, State Bank of Mysore, Santhome Branch, Madras-600 004.
Dear Sir, Our F.C.N.R. Accounts with you.
This is to state that the F.C.N.R. accounts opened by us, vide No. 12/ 66/106155 for U.S. $ 37,811.71 and No. 12/72/106161 for 4,365.91 and the further FCNR deposits to be invested by us will not be prematurely withdrawn till the loan made available by you to Lakshmi Constructions (P.) Ltd. amounting to Rs. 10.00 lakhs plus interest and other dues is fully cleared."
19. The above contents of exhibit P-18 was relied upon by the plaintiff to claim a total lien over the deposits made by defendants Nos. 5 and 6 in their F.C.N.R. accounts for the U.S. dollars and sterling pounds. What has been stated in clear and unambiguous words in the said letter exhibit P-18 is that defendants Nos. 5 and 6 have given an undertaking to the manager of the plaintiff that till the suit loan with all its interest accrued is cleared, they would not withdraw the said deposits prematurely. Except the above meaning it was not at all possible to ascribe any other meaning for that. Section 171 of the Indian Contract Act, provides as follows :
"Bankers, factors, wharfingers, attorneys of a High Court and policy brokers may, in the absence of a contract to the contrary, retain, as a security for a general balance of account, any goods bailed to them ; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to the effect."
20. This "general lien" as it is realised from the section is culled by way of distinction from the "particular lien" of an artificer for work done by him on the goods in question was the basis for the English law and proved trade usage of relationship between bankers and customers. But it is also made clear that a banker's lien, when it is not excluded by special contract, express or implied, extends to all bills, cheques, and money entrusted or paid to him and all securities deposited with him, in his character as a banker. Thus, the statute does not seem to expressly refer to banker's lien in respect of deposits but, however, money has been held to be a species of goods over which, lien may be exercised. Looking into the provision of law stated above, there appears to be no lien or liability created by defendants Nos. 5 and 6 in favour of the plaintiff in the instant case over their money for loan due to the plaintiff.
"By mercantile custom the banker has a general lien over all forms of commercial paper deposited by or on behalf of a customer in the ordinary course of banking business."
is a passage found in Chitty on Contracts, Vol. II, para. 473 (23rd edition). At page 474, it is found further that a banker may not claim the protection of the lien in respect of advances made after notice that the security belongs to or is subject to some interest of a stranger. Thus, from the facts of the instant case, with reference to the contents of exhibit P-18, by applying the above legal ratio, it is made clear that the lien can be created only by prevailing over the property of the customer that is defendants Nos. 1 to 4 herein and not against the deposits made by defendants Nos. 5 and 6 pursuant to Section 171 of the Indian Contract Act.
21. From a bare perusal of exhibit P-18, the letter, it is noticed that the letter itself does not create a lien and that it has been stated only that the said deposits and the amounts to be deposited further will not be prematurely withdrawn by themselves, namely, defendants Nos. 5 and 6, before the due date and if a lien was intended to be created, there must be clear intentment and all the formalities of law followed. Besides, there must be consideration for this contract. But in so far as the suit loan is concerned, all the arrangement, consideration and so on had been completed in terms of the contents of the sanction order marked under exhibit P-2. No lien register as promised by P.W.-1 has been produced in this case and except exhibit P-18 not even a single paper is seen to have been executed between defendants Nos. 5 and 6 and the plaintiff with regard to creating a lien.
22. One of the contentions raised by A.C. Muthanna, learned senior counsel, for and on behalf of defendants Nos. 5 and 6 is that since in the letter exhibit P-18, Sections 11 and 47 of the Foreign Exchange Regulation Act have not been complied with for the very reason that for creating a lien over the F.C.N.R. deposits by defendants Nos. 5 and 6, no permission has been obtained either by the plaintiff or by the defendants and that, therefore, the alleged lien created and claimed by the plaintiff on the basis of exhibit P-18 cannot be valid in law but, however, void and exhibit P-18 is totally against the public policy as envisaged under Section 23 of the Indian Contract Act.
23. Though two case-1aws in the following cases, R.M.S.S. Chettiar v. Gain Cheng Kiet, and Escorts Ltd. v. Union of India [1985] 57 Comp Cas 241 at page 323, were relied on by Mr. R. Krishnaswamy, learned counsel appearing on behalf of the plaintiff, I feel, the facts and the ratio held in the above two cases, do not render any help or assistance to improve the case of the plaintiff for the factual contents found in exhibit P-18. In fact, in the plaint itself, it has been stated in paragraph 4 that defendants Nos. 5 and 6 had made certain deposits with the plaintiff-bank and, given a lien on those deposits by letter dated April 19, 1985, and they are made parties to the suit to enforce the lien and appropriate the proceeds of the deposits for amounts due by the first defendant. By having a casual reading of the contents of the above letter, it is not possible for me at all to ascribe a meaning to the contents of the letter that defendants Nos. 5 and 6 have created a lien upon their deposits found in U.S. dollars and sterling pounds in favour of the plaintiff-bank. What they had undertaken is that they would not withdraw their deposits until the suit loan transaction is completely discharged and that the defendants had not given nor created any lien in favour of the plaintiff nor any guarantee on their deposits available in their accounts. It is for the above reason alone, I am at every difficulty to concede the claim and contention made by learned counsel Mr. R. Krishnaswamy, for and on behalf of the plaintiff.
24. According to Halsbury's Laws of England, 4th Edition, Volume 28, para 502, page 221, lien in its primary or legal sense is a right at common law in one man to retain that which is rightfully and continuously in his possession belonging to another until the present and accrued claims of the person in possession are satisfied. In this primary sense it is given by law and not by contract. Liens are of two kinds--general and particular. A general lien is the right to retain the property for a general balance of accounts. Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers have general lien.
25. According to K.J. Aiyar's Judicial Dictionary, Ninth Edition (1984) at page 594, a lien describes the right to retain property until some debt in claim is paid. A "lien" is a right, in the property of another, given by way of security, which has no existence apart from the debt, and does not, in any case, survive its discharge, though the discharge of the debt does not, ipso facto, destroy the possession of the lien-holder but merely his right to retain it against the debtor. After the discharge of the debt, the lien-holder keeps the property only as bailee-at-will as regards the debtors, since possession cannot be destroyed, unless both animus and corpus have ceased to exist.
26. No legal evidence, both oral arid documentary, was adduced by the plaintiff to show that defendants Nos. 5 and 6 had created a lien over their deposits in the F.C.N.R. accounts in favour of the plaintiff. Their undertaking by means of exhibit P-18 is to the effect that until the discharge of-the suit loan due to the plaintiff by defendants Nos. 1 to 4 are paid, they shall not withdraw their money from the said deposits in the plaintiffs-bank. It is under the above circumstances, I am constrained to say that exhibit P-18 cannot be taken advantage of by the plaintiff in order to claim a lien upon the deposits thereto therein by and on behalf of defendants Nos. 5 and 6, for all the findings and observations given above. Defendants Nos. 5 and 6 shall not be allowed to withdraw their deposits mentioned in their letter dated April 19, 1985, until all the dues by defendants Nos. 1 to 4 were discharged but, however, the said letter has not created any lien upon their money in favour of the plaintiff.
27. In the context that both defendants Nos. 5 and 6 are the parties to exhibit P-18 and no evidence of any kind or arguments or contentions in this regard were pressed into with regard to issue number 4 whether the sixth defendant is a necessary party to the suit, I do not propose to give any finding upon issue No. 4, but for the reasonings given above, I answer issues Nos. 2 and 3 in favour of the plaintiff but on issue No. 3, I hold that the letter dated April 19, 1985, is true and valid but, however, cannot be enforced for the reasonings given above, by the plaintiff against defendants Nos. 5 and 6.
Findings on issues Nos. 5 and 6: In the result, for all the reasonings and findings given on issues Nos. 1 to 4, the plaintiff is entitled to a decree as prayed for against defendants Nos. 1 to 4 and against defendants Nos. 5 and 6 only to the limited extent that defendants Nos. 5 and 6 are not entitled to withdraw the amount until the discharge of the suit claim by defendants Nos. 1 to 4 but against them the letter exhibit P-18 dated April 19, 1985, cannot be enforced.
28. Thus, in the result, the suit of the plaintiff against defendants Nos. 1 to 4 is decreed in full as prayed for with full costs. Time to pay the decree amount, which was raised on the mortgage created upon the plaint schedule-mentioned property is six months. Suit against defendants Nos. 5 and 6 is decreed to the limited extent of permitting the plaintiff to retain the deposits till the decree against defendants No. 1 to 4 is discharged but, however, without costs.