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3. On 19.08.2013, summons of the suit were issued to the defendants returnable on 04.09.2013. On the date fixed for hearing, the defendants appeared and the written statement was filed on their CS No. 20/13 Naresh Chand Jain & Anr. v. Oriental Bank of Commerce & Ors. 4/25 behalf on 10.09.2013.

4. Several objections have been raised in the written statement, namely, that the suit is liable to be rejected as it does not disclose a cause of action; that the requisite court fees has not been paid; that the contents of the suit are vague and misleading; that the plaintiffs have failed to specifically pray for a decree in their favour, therefore, the relief cannot be granted and the suit is liable to be rejected; that the plaintiffs have concealed material facts and have not approached this Court with clean hands. It is further averred that the plaintiff is the ex-employee of defendant no. 1 and that his pension is being deposited with the defendant bank in his bank account. Also, the plaintiff no. 1, having worked over a long period of time with the bank, is well acquainted with the working of the banking sector. It is stated that the cheque in question was credited in the bank account of the plaintiffs, which had been returned unpaid with remarks, 'Insufficient Funds'. However, inadvertently due to human error, the reversal of the credit entry was not done in the bank account. This mistake was detected around August, 2012 during the reconciliation process of the service branch of the defendant bank. Thereafter, the notice dated 09.08.2012 was issued to the plaintiffs to deposit the amount of the cheque in question in the account as the same was going to be debited within a period of three days. It is alleged that the plaintiff had withdrawn the cheque amount deliberately knowing that the cheque of such a huge amount CS No. 20/13 Naresh Chand Jain & Anr. v. Oriental Bank of Commerce & Ors. 5/25 had not been honoured. Further, since sufficient amount was not available in the bank account of the plaintiffs, a lien was marked in the bank account on 09.08.2012. It is averred that the defendants in exercise of their right to general lien and set off under Section 171 of the Indian Contract Act, 1872 (for short, "Contract Act") appropriated a sum of Rs. 1,10,000/- (Rupees One Lakh and Ten Thousand Only) lying in the bank account/FDRs, on 26.11.2012, towards the outstanding amount. Further, it is submitted that general lien is a valuable right of the bankers judicially recognized and that the lien extends to FDRs/CDRs, which are remitted to the bank for the purposes of collection, and that this right can be exercised in respect of a joint bank account.

6. On completion of the pleadings of the parties, the following issues were framed :-

1. Whether the plaintiffs are entitled to a mandatory injunction directing the defendants to de-freeze the bank account of the plaintiffs? OPP

2. Whether the plaintiffs are entitled to restoration of the fixed term deposits appropriated by the defendants? OPP

3. Whether the defendants had rightfully exercised their right to general lien under Section 171 of the Indian Contract Act, 1872 in the present case? OPD

15.The case of the defendants is that the defendant bank, in exercise of their right to lien, had set off and appropriated the FDRs of the plaintiffs and then freezed the bank account of the plaintiffs in order to recover the cheque amount due by the plaintiff towards the bank. The burden of proof is on the defendants to prove that they had rightfully exercised their right to lien under Section 171 of the Contract Act. A banker's lien is a judicially recognized right, which can be exercised to recover an amount due towards the bank. The law relating to the banker's right of lien and its extent is enunciated in the decision of the Hon'ble Supreme Court in Syndicate Bank v. Vijay Kumar & others., AIR 1992 SC1066, and the same is quoted as follows:- "...The above passages go to show that by mercantile system the bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognised and in the absence of an agreement to the contrary, a Banker has a general lien over such securities or bills received from a customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer's debit balance. Such a lien is also applicable to negotiable instruments including FDRs which are remitted the Bank by the customer for the purpose of CS No. 20/13 Naresh Chand Jain & Anr. v. Oriental Bank of Commerce & Ors. 19/25 collection. There is no gainsaying that such a lien extends to FDRs also which are deposited by the customer. .." From the above, it is no longer res integra that a banker's lien extends to FDRs of its customer. Undeniably, the defendant bank has a right of lien, however, for the defendants to prove that they had legally/rightfully exercised their right to lien in respect of the FDRs of the plaintiffs, it is for the defendants to show that the bank did so in order to recover the amount due by the plaintiffs towards the defendant bank. In other words, the defendant bank must show that they exercised their right to lien to recover the amount of an unpaid cheque, returned for want of sufficiency of funds, when presented in clearing to the bank on which it was drawn, and that the credit entry was not reversed. For this, it is necessary to refer to the first notice dated 09.08.2012, issued by the defendant no. 1 to the plaintiffs, Exhibit PW-1/D. In the said letter, it is stated that the cheque in question when submitted to the bank by the plaintiffs was sent through clearing for collection and in anticipation of the payment credited the amount of the cheque in the bank account of the plaintiffs. It is further stated that, "The above cheque was returned unpaid due to the undernoted reason

Issue No. 3:-

3. Whether the defendants had rightfully exercised their right to general lien under Section 171 of the Indian Contract Act, 1872 in the present case? OPD

18.The burden of proving this issue is on the defendants. In light of the findings of this Court on issue no.1, it has been concluded that the defendants have failed to discharge the burden to prove that they had rightfully exercised their right to lien. Therefore, this issue is decided in the negative.