AUNUMATI Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) Leave granted.

(2.) This appeal raises the issue whether a fixed deposit jointly owned with an "either or survivor" clause can be pledged by one of the account holders with the Bank and whether the Bank can adjust the amount of fixed deposit against such pledge, without the authority, knowledge or concurrence of the other account holder.

(3.) The appellant and her husband Mam Chand made a fixed deposit of Rs. 20,000/- with the respondent Bank on 31st May, 1988 for a period of 84 months (i.e. seven years). The fixed deposit would have matured on 31-5-1995 and the amount payable on maturity was Rs. 39,930/-. According to the appellant half of the deposited amount belonged to her and the other half belonged to her husband. On 24th June, 1988, a loan was taken by one Khem Chand in his sole proprietary business of M/s. Verma Agro Industries. In 1991 the respondent-Bank filed a suit against M/s. Verma Agro Industries, Khem Chand and the appellants husband Mam Chand. In the suit it was alleged that M/s. Verma Agro Industries and Khem Chand had executed various agreements with regard to the loan and credit facilities made available by the Bank to them. It was also pleaded in the suit that Khem Chand and Mam Chand had secured the amount of the loan by creating a mortgage in respect of immoveable property consisting of agricultural land. According to the plaint a total sum of Rs. 2,57,625/- inclusive of interest was payable by M/s. Verma Agro Industries and Khem Chand to the respondent-Bank. It was further pleaded that Mam Chand and one Nanak Chand had executed guarantee agreements on 24th June, 1988. The Bank prayed for a decree for Rs. 2,57,625/- together with the additional interest and for enforcement of the claim against the hypothecated and the mortgaged properties with a further prayer that if the aforesaid securities were found insufficient for realization of the amount payable under the decree, it be given the liberty to recover the balance from the persons and other properties of the defendants.