STATE BANK OF MYSORE Vs. SURJEET KAUR

JUDGEMENT

(1.) This appeal is directed against the orderdated 20/04/1992 made by Additional District Judge dismissing theapplication of the appellant, State Bank of Mysore filed under Order 21 Rule46-A, Civil Procedure Code and directing the bank to deposit the amount of F.D.R. withinterest in the said Court as soon as possible but not later than seven daysfrom the date of the order. Briefly, the facts are these :-

(2.) Respondent No. 1 Surjit Kaur obtained a decree on the basis ofaward against J.S. Butalia, Proprietor of Jayes International on 31/09/1991. Reference to arbitration was make on 18/07/1991. On 2 8/08/1991 an award was made in favour of respondent No. 1 and againstrespondent No. 2 and the award was made rule of the Court and decreepassed in terms thereof on 3/09/1991, Respondent No.2-judgment-debtor stated before the arbitrator that the amount of the F.D.R. berecovered from the bank to satisfy the award and it was so recorded in theaward. Immediately thereafter i.e. on or about 12/09/1991 theexecution petition was filed by respondent No. 1 against respondent No. 2seeking attachment of the amount of F.D.R. including interest due thereupontill date. The F.D.R. was with State Bank of Mysore. A prohibitory orderwas passed by the Executing Court on 15/09/1991.

(3.) The stand of the Bank before the Executing Court was that F.D.R.for Rs. 55,906.90 favouring respondent No. 2 was under its general lien forliabilities of respondent No. 2 towards the bank and there is no credit balanceavailable with the bank for being remitted in terms of the order of the Court.As the Garnishee order had been served on the bank it filed objections underOrder 21 Rule 46-A, Civil Procedure Code inter-alia, stating that respondent No. 2 the judgment debtor owed a huge sum to the bank and a suit for recovery ofhad been filed on 11/05/1990 against him by the bank in the Court ofRs. 8,24,369.00 Senior Sub-Judge, Gurgaon. which was pending. The Bank saidthat F.D.R. was given to it as security for bank guarantee which the bank hadgiven on behalf of the respondent No. 2 and that the bank guarantee had beendischarged and after discharge of the bank guarantee the bank had everyright to adjust the amount of the F.D.R in exercise of its general lien overthe F.D.R. It was also pleaded that the bank had every right to adjust theamount of F.D.R. against its dues. Further the bank pleaded that the partiesin order to play a fraud got a collusive award prepared which does not affectits right to adjust the amount due on F.D.R. It was also pleaded that therespondent No. 2 much after filing of the suit procured the award and himself got statement recorded in the award that the amount of F.D.R. berecovered from the bank when he fully knew that he had to pay a huge sumof Rs. 8,24,369.00 with costs and interest to the bank. The case of the bankin the objection petition was that no amount was due from it to respondentNo. 2 for which any Garnishee order could be issued. It was pleaded that theaward was procured to get a handle to deprive the bank of the amount of theF.D.R. The objections tiled by the bank were dismissed by the impugnedorder. An application for review filed by the bank, inter-alia, pleading thatthe amount of the F.D.R. bad been adjusted by the bank on 21/10/1991 in the Protested Bill Ledger and that the said fact escaped the attentionof the Manager of the bank as ledger and adjustment is not dealt with by theManager but by the staff working at the Counter, was rejected by the executing Court on 6/05/1992.