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5.The City Union Bank Limited filed a written statement, wherein, it is sated that the plaintiff along with one Kumaraswamy and his wife Chellapappa obtained a loan of Rs.4,000/- and they have all executed a promissory note on 19.11.1983 to repay the sa id amount together with interest and the plaintiff is the co-promissor, liable to repay the said amount with interest. The loan amount was not paid and there was no response to pay the amount also and therefore, the defendant filed a suit in OS.No.193/1986, before the District Munsif Court, Thiruvaiyaru. In the said suit, the other two defendants submitted to a decree and the plaintiff alone was contesting the suit. The defendant accepted the fixed deposit account of the plaintiff in FDR.No.127288 and the interest is payable quarterly and the same has been credited in the SB Account of the plaintiff once in 3 months in SB.A/c.No.11 52. It is further stated that as on 3.8.1986, the amount payable in the fixed deposit was Rs.10,000/- only. The Bank is having a lien over the amount covered by the fixed deposit of the plaintiff. The Bank is also entitled to hold the deposit, until the debt due from the plaintiff is discharged. The bankers' lien is in the form of general lien and the Bank has got a general lien, on all securities deposited with them by a customer, unless there is an express contract or circumstance that shows an implied contract inconsistent with the general lien. The Bank admits the presentation of the fixed deposit receipt with the Vijaya Bank, for collection, and as the plaintiff has not paid the amount due to the Bank, the amount payable under the fixed deposit account was withheld as a lien and the communication sent to the Vijaya Bank would not amount to dishonouring of the fixed deposit. The Bank had expressed its willingness to pay the balance amount due after the settlement of lien account of the plaintiff. But, however, the plaintiff went to the extent of denying his liability to the lien of the Bank. The Bank also denied its liability in respect of the damages claimed by the plaintiff and prayed for dismissal of the suit.

19.In Chalmers on Bills of Exchange, the meaning of 'Banker's lien' is given as follows:- "A banker's lien on negotiable securities has been judicially defined as "an implied pledge." A banker has, in the absence of agreement to the contrary, a lien on all bills received from a customer in the ordinary course of banking business in respect of any balance that may be due from such customer." By referring to various other matters, the Supreme Court opined, "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 to the Bank by the customer for the purpose of collection. There is no gainsaying that such a lien extends to FDRs also which are deposited by the customer." The above said observation would clearly indicate that the bank has got a general lien in respect of all the securities of its customers, including negotiable instruments and the FDRs.

20.The Supreme Court further held in para 7, "Applying these principles to the case before us we are of the view that undoubtedly the appellant/bank has a lien over the two FDRs. In any event the two letters executed by the judgement debtor on 17.9.1980 created a general lien in favour of the appellant/bank over the two FDRs. Even otherwise having regard to the mercantile custom as judicially recognised the Banker has such a general lien over all forms of deposits or securities made by or on behalf of the customer in the ordinary course of banking business. The recital in the two letters clearly creates a general lien without giving any room whatsoever for any controversy." In the said case, the judgement debtor himself has given letters, and thereby, the judgement debtor agreed that the deposits and renewals shall remain with the Bank so long as any amount on any account is due to the bank from them. But, however, such an agreement or letter is absent in our case. But, however, the Supreme Court has observed that, "even otherwise, having regard to the mercantile custom as judicially recognised the Banker has such a general lien over all forms of deposits or securities made by or on behalf of the customer in the ordinary course of banking business."

21.In view of the principles laid down by the Supreme Court, in an unequivocal term, we cannot say that the bank has committed an error in exercising its lien over the respondent's FDR amount, which is lying in the appellant/bank and as per the mercantile practice, the Bank is entitled to exercise a general lien over the FDRs also.

22.The next question that arises for the consideration of this court in this case is that the respondent stood surety for the amount borrowed by Kumaraswamy, for which, the appellant/bank filed a suit for the recovery of a sum of Rs.2,568.15/-, but, whereas the amount of the respondent available with the appellant/bank was Rs.10,000/-. That in the said circumstances, whether the bank is justified in withholding the entire amount is another question to be answered.