VIJAYA BANK Vs. MOHAMMED SALEEM

JUDGEMENT

(1.) This appeal is directed against the Order passed by the District Forum, Madikeri on 21.4.1991 in Complaint No.424/90-91 on its file.

(2.) It arises in this way: -The respondent had deposited a sum of Rs.26,000/- in Fixed Deposit No.1/88 with the Appellant Bank. One Mr. B. S. Babu had applied for loan to the appellant bank for purchasing an Auto-rickshaw and the loan was advanced to him on the security of the Fixed Deposit of the respondent. B. S. Babu purchased an Auto-rickshaw bearing Registration No. MYZ 6958 and hypothecated the same to the appellant bank towards the loan. B. S. Babu was irregular in the payment of instalment to the appellant bank. The appellant bank issued notice as per Annexure-D to B. S. Babu and the respondent calling upon them to make payment of the loan advanced to Babu. As they failed to make payment, an amount of Rs.18,583.80p. out of the Fixed Deposit of the respondent was adjusted towards the loan taken by Babu. Hence the respondent filed a complaint before the District Forum for setting aside the said action of the bank and directing the bank to pay the said amount to him.

(3.) The appellant bank contended that the respondent who was a guarantor to the loan transaction of B. S. Babu had given the Fixed Deposit as security and a lien had been created on it; that the loan was long overdue and as neither of them repaid the loan inspite of several notices, the bank was justified in adjusting the said amount.