State Consumer Disputes Redressal Commission
The Branch Manager, Indian Overseas ... vs Mrs.A.Selvarani,Theni Dist. on 30 June, 2023
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IN THE CIRCUIT BENCH OF THE TAMILNADU STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, MADURAI.
PRESENT: THIRU.N. RAJASEKAR, PRESIDING JUDICIAL MEMBER
THIRU.S.KARUPPIAH, JUDICIAL MEMBER
F.A.No.87/2017
FRIDAY, THE 30th DAY OF JUNE 2023
The Branch Manager,
Indian Overseas Bank,
Lakshmipuram Branch,
Lakshmipuram,
Periyakulam Taluk,
Theni District. Appellant/Opposite Party
-Vs-
Mrs.A.Selvarani,
W/o Appaian,
D.No.73, South Street,
Ammapatti, Alagapuri Post,
Periyakulam Taluk,
Theni District. Respondent/Complainant
Counsel for Appellant/Opposite Party : Mr.M.Senthilkumar, Advocate.
Counsel for Respondent/Complainant : M/s.B.Dhanapandian, Advocate.
This appeal coming before us for final hearing on 17.04.2023 and upon
perusing the material records, this Commission made the following:
ORDER
THIRU.S.KARUPPIAH, JUDICIAL MEMBER.
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1. Aggrieved with the award passed by the District Consumer Disputes Redressal Forum, Theni made in C.C.No.31/2016 dated 18.05.2017, the opposite party/bank preferred this appeal.
2. The facts:
The complainant is an Account holder of the opposite party bank. She availed a loan of Rs.35,000/- by pledging her 3 sovereign gold chain on 27.01.2015. Since, the loan was due , a notice was sent by the bank . She paid the entire loan amount with interest on 26.05.2016. Despite the discharge of Jewel loan the jewels were not returned to the complainant. When questioned, the bank replied that, the complainant in the past, along with other woman formed Self Help Group in the name of 'Thanga Nila Mahalir Sangam' and obtained a loan of 3,00,000/- in the year 2013. And the complainant was President of the Thanga Nila Mahalir Sangam and still there was a balance of Rs.51,201/-. So the opposite party refused to return the jewels. Hence, the complaint is filed seeking the opposite party to return the jewels and also Rs.50,000/- towards compensation for mental agony and Rs.50,000/- towards compensation for deficiency in service and also cost of the proceedings.
3. The opposite party in their written version admitted the discharge of Jewel loan and also admitted their failure cum refusal to return the jewels, claiming lien over the Jewels. They claimed that for the previous loan obtained by the same complainant as the President of a Mahalir Sangam which owed a balance loan amount still to the bank. They prayed this Commission to dismiss this complaint.
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4. The District Commission after perusing the affidavit , Ex.A1 to Ex.A8, and Ex.B1 to Ex.B6 found the opposite party/bank committed deficiency in service and directed the opposite party to return the jewels and to pay Rs.35,000/- along with interest and also to pay Rs.5000/- towards compensation for mental agony and to pay Rs.5000/- towards compensation for deficiency in service and also to pay cost of Rs.5000/- to the complainant.
5. Against the above order, the appeal has been preferred by the opposite party on the following:- Grounds: That, the District Commission order is erroneous and not sustainable in law. The District Commission failed to appreciate Section 171 and bankers lien over the Jewels, the above award is liable to be set aside and there is no deficiency in service committed by the opposite party/bank.
6. In this case, both sides filed their written arguments and they reiterated the facts stated in their pleadings. It is an admitted fact that, the complainant by pledging her gold chain availed a gold loan and the above gold loan was subsequently completely discharged. The complainant as a President of Thanga Nila Mahalir Sangam, borrowed Rs.3,00,000/- from the opposite party i.e., this Self Help Group loan in the year 2013 even prior to availing the gold loan. It is an admitted fact that the Self Help Group still liable to pay more than Rs.51,201/- to the opposite party.
7. It is the main contention of the complainant that as a Member of the Group she paid her loan share amount and if there is any balance she cannot be personally liable 4 to pay. And for the loan borrowed by the Self Help Group which is earlier in the point of time her subsequent gold Jewel cannot be retained by the bank U/s 171 of contract Act.
8. Now the point for consideration is: Whether the bank can retain the jewels pledged by the complainant for yet another loan borrowed by the complainant as a President of Self Help Group or not?
9. Point: The District Commission answered this question in the negative and found the opposite party/bank deficiency in service. The District Commission further went on to say Section 171 is applicable only for the goods bailed with the bank and not for the goods pledged with the bank. The above finding make us to revisit Section 171 of the Indian Contract Act, which reads thus:
"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 that effect".
"The word bailment is defined in Section 148 of the Contract Act as the delivery of goods by one person to another for some purpose, upon a contract that they shall be returned or otherwise disposed of according to the directions of the person delivering them, when the purpose is accomplished". So the word bailment included any pledge but this is wrongly meant by the District Commission. The District Commission wrongly held the jewels pledged were not amounted to bailment.5
10. It is not out of place to refer the Judgement of the Hon'ble Supreme Court in Syndicate Bank .Vs. Vijaya Kumar and others, reported in 1992 (2) SCC
331.
12. As noticed above, Section 171 of the Act states that the bankers like the appellant Bank, in the absence of a contract to the contrary, retain as security for a general balance account, any goods bailed to them. Therefore, what is required to be seen in the instant case is whether there is any contract to the contrary, which prevents the bank from exercising their general lien and as to whether any goods have been bailed to them. It cannot be disputed that the property in question was not bailed to the appellant Bank by the deceased borrower at any point of time. Further, it is an undisputed fact that the property in question was offered by (late) N.P.S.Mahendran to cover his liability in respect of the loans, which he had borrowed in the accounts of M/s.Sanjay Bala Tea Plantation and M/s.Aarthi Bala Tea Plantation and his self acquired properties were mortgaged to secure this specific loan transactions. No document has been placed before us to show that the borrower had given any authorisation to the Bank to hold the documents of the mortgaged property, given to secure the loan transaction for M/s.Sanjay Bala Tea Plantation and M/s.Aarthi Bala Tea Plantation, for the purpose of any other loan availed in any other branch by M/s.Somerset Tea Plantation in which (late) N.P.S.Mahendran, stood as a guarantor. Thus, the issue boils down to the question as to whether there is 6 any contract to the contrary, which prevents the appellant Bank from exercising its general lien under Section 171 of the Act.
In Chitty on Contracts, 29th Edition (2004) ? Volume-II, Page 496 on Bankers' Lien, it is stated as follows:
.. The most frequent example of circumstances inconsistent with the general lien is in the case of a deposit expressed to cover an advance for a specified purpose. However, once the original purpose has been fulfilled by repayment of the specified advance, if a customer knowingly permits the banker to retain the security, a general lien may ultimately be implied and its protection then claimed in respect of other advances?
14. In the instant case, the borrower, (late) N.P.S.Mahendran, has admittedly deposited the title deeds of the property to secure a loan transaction availed in respect of two Plantation Companies. This fact has not disputed by the appellant Bank. Therefore, we have no hesitation to hold that this contract / mortgage, had been created by the deceased borrower for a specific purpose and for a specific loan and the contract was self contained and the terms and conditions were binding upon both the borrower as well as the bank. In other words, the deposit of title deeds by which the mortgage was created by the deceased borrower was for a specific purpose to cover an advance for a specific loan. When such is the situation, the borrower having deposited the documents in order to secure a specific transaction, the bank 7 cannot contend that they could hold the documents for a balance due in a different loan account where the said N.P.S. Mahendran is not a borrower.
Further, the language of Section 171 of the Act, is explicit to the fact that the bankers are entitled to retain as a security for a 'general balance account'. Admittedly, it is not the case of the appellant Bank that the amount, which is now said to be due on account of the borrowings of M/s.Somerset Tea Plantation, is a general balance account of the deceased borrower N.P.S.Mahendran.
15. In the case of Syndicate Bank v. Vijaya Kumar, referred supra and relied on by the learned senior counsel for the appellant Bank, it is to be noted that the borrower therein issued a letter in favour of the bank stating that the bank is at liberty to adjust from the Fixed Deposit receipts without any reference to the loan and he agreed that the Fixed Deposit receipts shall remain in the bank so long as any amount on any account is due to the bank from them either singly or jointly or with others. Thus, the Hon'ble Supreme Court, while interpreting such a letter covering the transaction executed by the borrower therein, rendered a finding that the bank is entitled to general lien over the Fixed Deposit receipts given by the borrower therein.
11. So, the banker has got every right to retain the pledged jewels. Even though the Jewel loan was discharged for yet another loan borrowed by this complainant for which she is also personally liable to pay the amount. In this case on hand, the Jewel loan was borrowed in her personal capacity. Self Help Group loan was borrowed as a 8 President of the above Sangam. Whatever be her position and rank the complainant is liable to pay the amount to the bank. The bank liability to return and the complainant's liability as a President of Self Help Group are mutually co exist in this case. So, the general lien can be imposed by the bank.
12. Apart from this, the general lien U/s 171 , cannot be enforced , if there is a contract to the contrary. Suppose, the bank under took to return the jewels at the time discharge of the Jewel loan then it amounts to contract to the contrary, and the bank cannot enforce the lien and cannot retain the jewels. However, in this case the bank was shrewed enough to mark Ex.B6 jewel loan agreement. In the Jewel loan agreement in point 9.3 it has been specifically undertaking by the complainant as follows:-
"The jewellery pledged to the Bank shall be continuing security for all my/our present and future indebtedness and liabilities either solely or jointly with other persons at any office of the Bank".
"tq;fpapd; kw;w fpisfspy; fld; ngw;wth; jdpj;Njh my;yJ gpwUld; $l;lhfNth gpw fld;(fs;) VJk; ngw;wpUe;jhy; mjw;Fk; my;yJ Gjpjhf ngwg;gLk; fld;fSf;Fk; eiffis chpikr; rhh;ghf nfhs;s tq;fpf;F chpik cz;L".
13. As per the above contract or undertaking given by the complainant the Jewel will be a continuing guarantee for the indebtedness of the complainant not only for her personal liability but for joint liability with others. Apart from the general lien the specific undertaking given to the bank, granted the bank a legal right to retain the jewels pledged to them.
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14. It is not out of place to register our personal views that after all, the money involved and loan granted by the bank belongs to the public. The stability of the nation depends upon healthy financial transactions made by the banks. So, the transactions must be disciplined and legally protected. The public welfare outweighs the single consumer right. So, on this score also we found that, the bank did not commit any deficiency. On the other hand, they exercised their legal right as well as satisfied their moral responsibility to the society. All these factors were not considered by the District Commission which warranted our interference. So, we inclined to set aside the award and allowed the appeal without cost and answered the points accordingly.
15. In the result, (1) The appeal is allowed.
(2) The order passed by the Learned District Commission, Theni, made in C.C.No.31/2016, dated 18.05.2017 is hereby set aside and the complaint is dismissed.
(3) No order as to costs in this appeal.
(4) The Registry is directed to refund the mandatory deposit to
the appellant/opposite party with accrued interest thereon duly discharged in favour of the appellant/opposite party. Dictated to the Steno-typist transcribed and typed by her corrected and pronounced by us on this the 30th day of June 2023.
Sd/-xxxxxxxxxx Sd/-xxxxxxxxxxxxxxx
S.KARUPPIAH, N. RAJASEKAR,
JUDICIAL MEMBER. PRESIDING JUDICIAL MEMBER.
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Corrected