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[9] Shivam Construction Co., M/s. v. Vijaya Bank, Ahmedabad; AIR 1997 GUJARAT 24:

While dealing with Section 171 of Contract Act, 1872 regarding Banker's lien it is held by the Division Bench of this High Court that when Overdraft facility given by bank to its customer on security of his Fixed Deposit Receipts on default in repayment of loan in spite of notices given by bank, Bank is competent under right of "set off" and also under general banker's lien for liquidation of Fixed Deposits and appropriation of amount towards over-draft account In view of the provisions of S. 171 of the Contract Act, Bankers have general lien in the absence of contract to the contrary to retain security for general balance of accounts or any goods bailed to the bank. Apart from that, there is' also evolution of doctrine of "set-off"

In the present case, it is beyond any doubt that the appellants who had enjoyed overdraft facilities on the securities of the FDRs, failed to discharge their duties and committed defaults, went on for over-drawls. Therefore, under the terms of loan as well as under the right of "set-off and also under the general banker's lien, the plaintiff bank was empowered and entitled to transfer and appropriate even by liquidation the FDs towards their over-draft account of the defendants. On all counts it cannot be said even for a moment that the action of the plaintiff-bank in liquidating the FDRs for purpose of appropriation towards bank's dues was, in any way, unjust, improper or illegal".