Judgment :- M. CHOCKALINGAM, J. This second appeal has arisen from the judgment and decree of the learned Subordinate Judge, Namakkal made in A.S. No. 27 of 1988, dated 18.8.1989 setting aside the judgment and decree of the learned District Munsif, Rasipuram made in O.S. No. 404 of 1985, dated 24.8.1987. The respondent herein filed a suit seeking for a money decree for a sum of Rs. 10, 500 with subsequent interest with the following averments. The plaintiff, a customer of the defendant Bank, was having a current account with the defendant and the present folio number is 156. The plaintiff advanced a loan of Rs. 10, 000 to one Mr. G. Subramaniam, Proprietor of Viji Gas Service, Rasipuram on 11.3.1985. G. Subramaniam issued a cheque of State Bank of India, Rasipuram Branch bearing No. 0630522 to the plaintiff for Rs. 10, 000 dated 10.4.1985 towards his loan. The said cheque was presented on 10.4.1985 with the defendant bank for collection and the amount was collected and credited into the plaintiff's account. When the plaintiff presented a cheque on 12.4.1985 to withdraw the said sum of Rs. 10, 000, the defendant Bank had also paid the same. The plaintiff credited the said sum towards the loan account of G. Subramaniam and returned back all the documents to him after closing his loan account. On 16.4.1985, the defendant bank informed the plaintiff that the said cheque issued by G. Subramaniam had been returned without collection, and without prior intimation to the plaintiff, they debited Rs. 10, 000 in the plaintiff's account under a debit note dated 16.4.1985, which was issued to the plaintiff on 18.4.1985, thereby the defendant Bank had withheld the plaintiff's money illegally and unlawfully. The defendant has no right to debit the said sum in the plaintiff's account, as they had already credit the said amount. On 18.4.1985 the plaintiff complained the matter to the higher authorities of the defendant. A reply dated 20.4.1985 was sent by the defendant Bank's Customer Service at Madras. As there was no further response, the plaintiff issued a legal notice on 4.7.1985. On 31.7.1985, the defendant sent a reply stating that the matter had received the attention of their Head Office and on hearing from them they would reply. The defendant neither sent any reply nor lead taken any steps to credit the amount into the plaintiff's account. As there was no further response, the plaintiff issued a legal notice on 4.7.1985. On 31.7.1985, the defendant sent a reply stating that the matter had received the attention of their Head Office and on hearing from them they would reply. The defendant neither sent any reply nor lead taken any steps to credit the amount into the plaintiff's account. The defendant had given a reply on 12.10.1985 with false allegations. There was no mistake or negligence on the part of the plaintiff. The defendant cannot withhold the plaintiff's money and cannot escape from the consequences by simply shifting the burden on the plaintiff. Hence, the defendant was liable to return the said sum of Rs. 10, 000.The defendant Bank filed a written statement and additional written statement contending that there is no bank by name "The Indian Bank" and unless the plaint is suitably amended, it is not maintainable as such; that as per the contract, the plaintiff has to sue the correct person answerable before the Court of law; that the bank does not know whether the plaintiff advanced a sum of Rs. 10, 000 to one G. Subramaniam; that the plaintiff must prove that he has lent any amount to him; that the plaintiff took undue advantage of a concession shown to a customer by Indian bank and has chosen to litigate; that the plaintiff took advantage of business practice prevailing among the banks in giving credit to cheques taken in clearing in anticipation that they would be paid by the paying banks' that the suit was bad for non-joinder of M/s. Viji Gas Service's Proprietor who had issued the cheque, as a party to the suit; that the defendant was always at liberty to reverse the cleaning credit if the cheque taken up for collection was dishonoured by the paying bank and the defendant who has Banker's lien on customer's money had rightly exercised the right in debiting the customer's account since the cheque in question was dishonoured by the paying bank; that the defendant had already issued a suitable reply notice to the suit notice; that the statement given by Mr. Ravi, Managing Partner of the plaintiff's firm before the Inspector of Branches of India Bank by name Mr. Ravi, Managing Partner of the plaintiff's firm before the Inspector of Branches of India Bank by name Mr. P. V. Krishnamoorthy during the investigation of this case would lend support to the defendant's case; that when the cheque in question was presented before Rasipuram Branch of Indian Bank, it was represented by the partner of the plaintiff that since the cheque was a local cheque and issued by a dealer of the Gas Company having sound business, it would be surely encashed; that in order to main a cordial relationship between the bank and the customer, the bank obliged to the plaintiff with an adjustment of Rs. 10, 000 pending realisation of the proceeds; that immediately on coming to know about the dishonour of the cheque on 15.4.1985, the bank had exercised its right in lien and debited Rs. 10, 000 from the account of the plaintiff; and thus no negligence could be distributed to the defendant; that the plaintiff could not have any grouse over the defendant bank and hence the suit was liable to be dismissed. It is also contended that the former Peon of the Rasipuram Branch, of Indian Bank by name T. M. Periasamy has acted in collusion with the plaintiff in concealing the return of the cheque by State Bank of India on 10.4.1985; in order to help the plaintiff in getting the credit and withdrawing the amount on 12.4.1985; that the said peon was on leave on 12.4.1985; that he brought the return of the cheque to the knowledge of his superiors only on 16.4.1985 and that he had been dismissed from service in September, 1985 on charges of fraud in connection with some other transaction.On the above pleadings, the trial Court framed the necessary issues, tried the suit and dismissed the same. The plaintiff preferred an appeal. The learned Subordinate Judge allowed the appeal and granted a decree as prayed for. The aggrieved defendant-Bank has come forward with this second appeal. At the time of admission, the following substantial questions of law were formulated by this Court for consideration. (1) Whether the lower appellate Court was right in holding that appellant bank has no lien ? (2) Whether the lower appellate Court was right in holding that the plaintiff could maintain the suit against the bank alone ? At the time of admission, the following substantial questions of law were formulated by this Court for consideration. (1) Whether the lower appellate Court was right in holding that appellant bank has no lien ? (2) Whether the lower appellate Court was right in holding that the plaintiff could maintain the suit against the bank alone ? This second appeal has arisen from the judgment of the lower appellate Court confirming the judgment of the trial Court and granting a decree in favour of the respondent/plaintiff herein who filed a suit alleging that the appellant bank had illegally and unlawfully withheld the plaintiff's money and had debited a sum of Rs. 10, 000 in the plaintiff's accounts with the appellant bank. Disagreeing with the case of the respondent/plaintiff, the trial Court dismissed the suit. On appeal, the judgment of the trial Court was reversed and a decree was granted by the lower appellate Court, which has culminated in this second appeal. The learned counsel appearing for the appellant bank would submit that the decision of the trial Court was a well considered one and hence the Subordinate Judge should have confirmed the same; that the respondent/plaintiff was not entitled to claim any amount from the bank; that the bank had the right to exercise the general lien on the money balance of its customers coming into the ordinary course of business; that the suit was bad for non-joinder of the necessary party viz., the third party Subramaniam who issued the cheque to the plaintiff; that as evidenced by Ex. B-4, the cheque deposited by the plaintiff drawn on State Bank of India, Rasipuram was returned on the same day with the endorsement "referred to drawer"; that the plaintiff has not taken any legal action against the said Subramaniam for the cheque given by him to the plaintiff on the State Bank of India being returned; that there his been a collusion between the plaintiff and the third party Subramaniam to cause loss to the bank; that the suit itself was not maintainable in view of the non-joinder of the said Subramaniam; that there was no negligence at all on the part of the bank and while so the first appellate Court should have confirmed the judgment of the trial Court and dismissed the suit; that the plaintiff whose cheque had been dishonoured; had no right to complain about the Bank exercising its power of lien on the balance of the plaintiff. In support of his contentions, the learned counsel relied on the following decisions :(1) Punjab National Bank Limited vs. Aruna Mal Durga Das 1960 AIR(Punj) 632); (2) Krishna Kishore Kar vs. United Commercial Bank 1982 AIR(Cal) 62); and (3) M/s. Shivam Construction Company, Ahmedabad vs. Vijaya Bank. Vehemently opposing all the contentions of the appellant's side, the learned counsel for the respondent would submit that the trial Court without appreciation of either the factual or the legal position his dismissed the suit which was rightly set aside by the first appellate Court; that it is not correct to state that the appellant bank was entitled to exercise its general lien to the present facts and circumstances of the case; that the contention of the appellant that the said Subramaniam who issued the cheque to the plaintiff should also be added as a party to the suit is unsustainable in law for the reason that there was no nexus or contract between him and the appellant bank in the transaction in question; that it is pertinent to note that though the cheque issued by Mr. Subramaniam was placed with appellant bank on 10.4.1985, the plaintiff presented the first cheque to withdraw the collected sum only on 12.4.1985 and the appellant bank has also paid the same to the plaintiff and under such circumstances, the plaintiff had given credit to the said sum in the loan account of the said Subramaniam and has returned all the documents to him, closing his loan account; that under the stated circumstances, the appellant is estopped from saying that the cheque placed for collection was returned and thus the act of the appellant bank would definitely be pointing to the utter negligence on the part of the appellant bank, but however, the defendant bank was not entitled to debit and withhold the plaintiff's money and the act of the bank in debiting the plaintiff's money under the aforesaid circumstances is illegal and unlawful and hence the first appellate Court was perfectly correct in granting the decree in favour of the plaintiff and the judgment and decree of the first appellate Court are liable to be sustained.Briefly stated admitted facts which are relevant for the disposal of the present appeal are that the plaintiff firm a customer of the appellant/defendant bank was having a current account with them; that one Subramaniam issued Ex. A4 - Cheque bearing No. 0630522, dated 10.4.1985 for Rs. 10, 000 drawn on State Bank of India Rasipuram Branch to the plaintiff; that the respondent/plaintiff presented the said cheque with the defendant bank on the same day i.e. on 10.4.1985 for collection; that the same was given credit to into the plaintiff's account on 10.4.1985; that the respondent/plaintiff presented a cheque on 12.4.1985 of withdraw the cheque amount of Rs. 10, 000; that the appellant bank has also paid the said amount of Rs. 10, 000 to the respondent on 12.4.1985; that on 16.4.1985 the appellant bank informed the respondent that the said cheque placed by the respondent in the hands of the appellant for collection was returned with an endorsement "referred to drawer" as evidenced by Ex. A8 and consequent to the said cheque returned without collection, the appellant bank debited Rs. 10, 000 in the plaintiff's account and issued a debit note under Ex. A-9, dated 16.4.1985 to the plaintiff on 18.4.1985. While the admitted facts are as above, the respondent has claimed the said sum of Rs. A8 and consequent to the said cheque returned without collection, the appellant bank debited Rs. 10, 000 in the plaintiff's account and issued a debit note under Ex. A-9, dated 16.4.1985 to the plaintiff on 18.4.1985. While the admitted facts are as above, the respondent has claimed the said sum of Rs. 10, 000 from the appellant bank stating that the debit made by the appellant was wrongful and the withholding of the said sum by the appellant was illegal and unlawful. The only defence that was put forth by the appellant bank was that it had exercised its right of general lien on the money balance of the customer viz., the respondent/plaintiff coming to the ordinary course of business, which it was entitled to and that there was no negligence on the part of the appellant bank. After careful consideration of the rival submissions, the Court is unable to appreciate or accept the contentions put forth by the appellant's side. The respondent having a current account with the appellant bank placed in the hands of the bank a cheque of the State Bank of India for Rs. 10, 000 dated 10.4.1985 issued by one Subramaniam, on the same day viz., 10.4.1985. It is an admitted position that the said amount of Rs. 10, 000 borne by the said cheque was given credit to in the account of the respondent on 10.4.1985 itself. It is pertinent to note that both the appellant bank and the branch of the paving bank were situated at Rasipuram. The bank official had deposed that if any cheque is placed for collection from a bank situated in that place, they usually get information before 1.45 p.m. that day as to whether the payment could be made or not. It has to be pointed out at his juncture that 11.4.1985 was also a working day. When the respondent presented his cheque on 12.4.1985 to withdraw the collected amount of Rs. 10, 000, the appellant bank made payment to the respondent by honouring the said cheque. No explanation is tendered by the appellant bank why the amount borne by the cheque in dispute was given credit to it in the account of the respondent or he was permitted to withdraw the sum before the actual collection was made. 10, 000, the appellant bank made payment to the respondent by honouring the said cheque. No explanation is tendered by the appellant bank why the amount borne by the cheque in dispute was given credit to it in the account of the respondent or he was permitted to withdraw the sum before the actual collection was made. As specifically pleaded by him, the plaintiff has deposed that after he withdrew that said sum from the appellant after he withdrew the said sum towards the loan account of Mr. Subramaniam and had handed over all the documents pertaining to his loan account.As seen above, the appellant Bank has given credit to the said amount of Rs. 10, 000 on 10.4.1985 itself, when the cheque in question was placed in its hands and immediately after it was sent to the other bank for collection. The appellant bank has given credit to Rs. 10, 000 in the respondent's accounts before the collection was made. On 12.4.1985 the bank has permitted the respondent to withdraw Rs. 10, 000 borne by the cheque in question by honouring his cheque. It is quite evident from what is stated herein above that the conduct of the appellant bank cannot, but be termed only as utter negligence, under the given circumstances. Much relying on a decision reported in Punjab National Bank Limited vs. Aruna Mal Durga Das (supra), the learned counsel for the appellant would submit that in exercise of the general lien, the appellant bank has rightly debited the said sum of Rs. 10, 000 in the respondent's account. Speaking of the distinction as to the banker's lien and Banker's right to set off under Sections 170 and 171 of the Contract Act, it has been held in the aforestated decision as follows : "There is a distinction between a Banker's lien and the Bank's right to set off. A lien is confined to securities and property in Bank's custody. Set off is in relation to money and may arise form a contract or from mercantile usage or by operation of law. The right of a bank to apply a deposit to an indebtedness due from the depositor, results from the right of set-off which obtains between persons occupying the relation of debtor and creditor, and between whom there exist mutual demands. The right of a bank to apply a deposit to an indebtedness due from the depositor, results from the right of set-off which obtains between persons occupying the relation of debtor and creditor, and between whom there exist mutual demands. Mutuality is essential to the validity of a set off, and in order that one demand may be set off against another, both must mutually exist between the same parties. 10 South Western Reporter 2nd series 144 and 3 Ruling Case Law 591 and 52 South Western Reporter 2nd series 259, Relied on." From the above decision it would be clear that there exists a distinction between the Banker's lien and Banker's right to set off. While a lien is confined to securities and properties in the bank's custody, the set-off is in relation to money and may arise from a contract or from the mercantile usage or by operation of law. Applying the same to the present facts of the case, it can be well stated that there is no question of exercise of the banker's lien, in the absence of any security or property in the appellant bank's custody at that time. It is true that the bank can exercise its right to set off in the money balance of a customer, provided there should exist mutual demands and in order that one demand might be set off against another, both must exist mutually between the parties. In the instant case, it cannot be stated that there was any existence of mutual demands. Apart from all the above, the conduct of the appellant bank under the given situation was a glaring example of negligence and hence its act of withholding the plaintiff's money and making a debit of Rs. 10, 000 in his account was unlawful and illegal. Under the stated circumstances, without any hesitation it has to be held that the appellant bank is liable to return the said sum of Rs. 10, 000 to the plaintiff with subsequent interest at 12% per annum from 18.4.1985 till realisation. Therefore, the judgment of the first appellate Court does not required any interference and the same has got to be sustained. In the result, this second appeal is dismissed with costs. The judgment and decree of the lower appellate Court are confirmed.