ROMESH SOOD Vs. CANARA BANK

JUDGEMENT

(1.) District Forum, Ludhiana on May 30,1997 dismissed the complaint filed by Romesh Sood against Canara Bank. The aforesaid order has been challenged by the complainant in this appeal. Case was taken up on May 12, 1999 for arguments. Mr. R. K. Aggarwal, Advocate for the Bank addressed arguments. It was ordered that Counsel for the appellant could submit written submissions. We have perused the records and submissions.

(2.) Romesh Sood is proprietor of M/s. Auto Links, Ludhiana. He had one open cash credit account with the Canara Bank, the opposite party. In the aforesaid account, he had submitted his title deed of property bearing No.921, Muradpura, Gill Road, Ludhiana. Another firm M/s. Malhotra Manufacturing Corporation, Ludhiana had OCC limit from the Bank aforesaid. Romesh Sood had stood a guarantor for the aforesaid account of M/s. Malhotra Manufacturing Corporation. After the complainant had discharged his liability in respect of cash credit account, he called upon the Bank to return the title deeds of the property. The Bank did not oblige on the plea that the Bank had lien over the property as the complainant had stood guarantor for OCC limit of M/s. Malhotra Manufacturing Corporation. Both the parties led their evidence on affidavits and documents. The District Forum accepted the plea of the Bank and dismissed the complaint.

(3.) In the written submissions made on behalf of the appellant, the stand taken up in the complaint has been reiterated. The short question for consideration in the present case is as to whether the Bank could exercise bankers' lien over the property (title deeds of which were tendered by the complainant to the Bank) against an account of a 3rd person for which the complainant had stood guarantor. On behalf of the Bank, reliance has been placed on the decision of the National Commission in M/s. Shankar Tube Wells V/s. The Branch Manager, State Bank of India,1997 2 CLT 472, wherein the complainant firm was sanctioned loan by the Bank. Partners of the complainant firm had deposited their title deeds as security. The Bank declined to return the title deeds claiming general lien of the banker. The State Commission held that the stand of the Bank was fully justified in holding that the transaction involved in the case pertains to borrowing of money by deposit of title deeds which was a civil dispute. The complainant could not be treated as a consumer within the provisions of the Act. The National Commission had dismissed the Revision Petition filed by the complainant. The Bank in the aforesaid case had already filed a civil suit against the 3rd person for recovery of money. The general lien was claimed against the title deeds. Since the matter was relegated to the Civil Court, the Revision Petition was dismissed. In the written submissions, it is sought to be explained that M/s. Malhotra Manufacturing Corporation had equitably mortgaged its own property with the Bank and the Bank had to recover the amount from such property and cannot fall back on the guarantors title deeds. The decision relied upon by the District Forum in State Bank of India V/s. Jawahar Lal, 1996 1 CPJ 293, was sought to be distinguished but we find no good reason to differ with the view expressed by the National Commission. The other decision referred to in the written submissions is of the Punjab High Court in AIR 1960 Punjab 632 wherein a distinction was drawn between banker's lien and the banker's right to set off. It was stated that the lien was confined to securities and property in Bank's custody and set off had no relation to the money. In our view, no benefit can be derived by the complainant from the aforesaid judgment. The contention of the appellant, as given in the written submission, that since no money was due from the complainant in their own account, the Bank could not exercise its lien with respect to M/s. Malhotra Manufacturing Corporation's account, cannot be accepted. For the reasons recorded above, we find no merit in this appeal which is dismissed.