VYSYA BANK LTD Vs. AKKEM MALIIKARJUNA REDDY

JUDGEMENT

(1.) The complainant pledged the gold ornaments on two occasions, that is, on 7-10-1985 and 15-12-1987 with the Vysya Bank Limited and borrowed Rs.2,700-00 and Rs.4,500-00 respectively. In addition to those loans, the complainant also borrowed a sum of Rs.5,000-00 towards crop loan on 3-11-1988 from the same Bank and on the hypothecation of paddy crop. The complainant discharged the amount due under the two gold loans. But the amount due and outstanding under the crop loan is still pending. Since the complainant has paid of the amount under the two gold loans, he applied to the bank for the return of the jewellery pledged. Since the bank did not return he filed the complaint C. D. No.1289 of '91 before the District Forum, Nellore for issuing an order to the respondent to stop the gold auction, which is to take place on 28-8-1991; to release the gold ornaments, which were pledged by the father of the complainant at the time of availing gold loan; and to direct the respondent to pay damages for the mental agony and costs. In the complaint it was stated that Tatiparthi area was declared as a drought area and the crop loan taken by the agriculturist farmers on or before 2-10-1989 upto Rs.10,000/- was relied on by the Government and hence the credit loan taken by the complainant's father was also waived off and as such, no question of repayment of the crop loan arises. Since the outstanding amount due under gold loan was paid, the bank is bound to return the ornaments.

(2.) In the counter filed by the opposite party, it was stated that the police mentioned with regard to the waiver of crop loans upto the extent of Rs.10,000-00 does not apply to the opposite party, as it is a private sector bank and since the said loan is outstanding, the bank is entitled to retain the jewels in exercise of general lien and also in view of the specific agreement in the acknowledgement whereunder, the complainant's father agreed that the bank can retain in jewels for payment of all the amounts outstanding and also for any amount due payable in future.

(3.) On the basis of the aforesaid pleadings, the District Forum relying on a decision of Justice K. Ramawamy, as he was then, in K. Jagadeeshwar Reddy V/s. Manager, Andhra Bank, Nizamabad, 1988 1 ALT 605, held that in the absence of any agreement to the contrary, the bank has no general lien in respect of those securities, which were given specifically for a particular loan. Since the loan advanced was on the basis of pledge of gold, for a particular purpose, the bank has no general lien and accordingly allowed the complaint.