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2001 DIGILAW 250 (CAL)

STATE BANK OF INDIA v. ASHIS KUMAR ROY

2001-05-02

SUBHRO KAMAL MUKHERJEE

body2001
S. K. MUKHERJEE, J. ( 1 ) THIS is a revisional application under section 115 of the Code of Civil Procedure by the plaintiff/petitioner against an order passed by Shrimati B. Roy, learned Assistant District Judge, Seventh Court at Alipore, District : 24 Parganas (South) in Title Suit No. 84 of 1991 whereby the learned judge allowed an application filed by the opposite party Nos. 5 and 6, inter alia, directing the plaintiff-bank to pay the interest accrued on the term deposit receipt mentioned in the plaint to the defendant Nos. 5 and 6 after deducting an amount of Rs. 25,000/- (Rupees twenty five thousand) only within 15 days from the date of the said order. The learned judge, also, fixed September 4, 1995 for peremptory hearing of the suit. ( 2 ) ON or about June 28, 1998 the plaintiff-bank sanctioned a sum of Rs. 1,27, 600/- (Rupees one lakh twenty seven thousand six hundred) only to the defendant No. 1 for purchasing a matador pick up van as by way of a medium term loan. The defendant Nos. 2 to 7, including defendant Nos. 5 and 6, guaranteed for due payment of the due amount of the loan taken by the defendant No. 1 and, also, undertook and/or promised to pay all interest costs and charges and expenses recoverable by the plaintiff from the said defendant No. 1. The said defendants, also, executed a deed of guarantee on June 28, 1998. ( 3 ) ON the allegation that the defendant No. 1 wrongfully and illegally failed and neglected to pay the loan lent and advance by the plaintiff in the said term loan account in terms of the agreement, the said plaintiff-bank instituted Title Suit No. 84 of 1991 in the Court of the learned Assistant District Judge, Seventh Court at Alipore, District : 24 Parganas (South) for recovery of a sum of Rs. 1,83, 800. 22 (Rupees one lakh eighty three thousand eight hundred and paise twenty two) only jointly and severally against the defendants as on June 28, 1991 and prayed for further interest and interest on judgment at the agreed rate on the said sum. 1,83, 800. 22 (Rupees one lakh eighty three thousand eight hundred and paise twenty two) only jointly and severally against the defendants as on June 28, 1991 and prayed for further interest and interest on judgment at the agreed rate on the said sum. A decree, inter alia, for declaration has been prayed for that the vehicle mentioned in the schedule to the plaint and the term deposit receipts mentioned in the plaint remain hypothecated and or charged to the plaintiff for recovery of the bank's due and the landed property as mentioned in schedule II remain mortgaged to the plaintiff-bank as security by way of first and permanent charges for payment to the plaintiff's claim. ( 4 ) THE said suit is still pending adjudication in the Court of the learned Civil Judge (Senior Division), Seventh Court at Alipore, District : 24 Parganas (South) at the peremptory hearing stage. ( 5 ) IN the said suit, sometime in February 1995, the defendant Nos. 5 and 6 filed an application inter alia, praying for necessary order directing the bank to pay the entire money on the term deposit receipt with interest up to the date of payment after deducting the controversial amount of Rs. 25,000/- (Rupees twenty five thousand) only for determination of the liability of the said defendant Nos. 5 and 6, if any, after the encashment of the liened term deposit receipt. It is contended in the said application that the defendant No. 5 was a senior officer of the bank. The said defendant No. 5 retired from his service in April 1987. The defendant No. 5 received his superannuary benefits and some of the said benefits were invested in the bank in the nature of fixed deposit bearing Fixed Deposit Receipt No. 252083/90 for Rs. 25,000/- (Rupees twenty five thousand) only dated May, 1988; that the plaintiff-bank sanctioned a medium term loan in favour of the defendant No. 1 and defendant Nos. 5 and 6 offered the said term deposit receipt in their names to be kept as lien with the bank until repayment of bank's due against the said medium term loan granted in favour of the opposite party No. 1. It is alleged that the lien over the said term deposit receipt was related to only Rs. 25,000/- (Rupees twenty five thousand) only and not on the accrued interest thereon. It is alleged that the lien over the said term deposit receipt was related to only Rs. 25,000/- (Rupees twenty five thousand) only and not on the accrued interest thereon. It is alleged that the plaintiff-bank did not take any timely action for recovery of their dues. It is contended that the said term deposit receipt for Rs. 25,000/- (Rupees twenty five thousand) only dated May 13, 1988 was matured on May 13, 1992 with maturity value of Rs. 38,587. 50 (Rupees thirty eight thousand five hundred eighty seven and paise fifty) only, thereafter, the bank issued a fixed deposit receipt for Rs. 38,588/- (Rupees thirty eight thousand five hundred eighty eight) only in the joint names of the defendant Nos. 5 and 6 for two years and retained the said fixed deposit receipt. The said deposit matured on May 13, 1994 and the maturity value was Rs. 50,800/- (Rupees fifty thousand eight hundred) only. It is contended that the new term deposit receipt dated May 13, 1992 was not subject matter of the suit. No lien was created upon the same and as such the bank was not entitled to withhold payment. ( 6 ) THE bank contested the said application filed by the defendant Nos. 5 and 6 by filing a written objection and contended, inter alia, that the defendant Nos. 5 and 6 along with others executed a guarantee agreement for the grant of a medium term loan in favour of the defendant No. 1. Defendant Nos. 5 and 6 created a lien over the term deposit receipt of the defendant Nos. 5 and 6 and the said lien was not related to only Rs. 25,000/- (Rupees twenty five thousand) only, as, suggested by the defendant Nos. 5 and 6, but also, the accrued interest thereon. On the maturity of the fixed deposit receipt dated May 13, 1988 the plaintiff-bank could have easily adjusted the maturity value of fixed deposit against the loan, but bonafide reinvested the amount for the benefit of defendant Nos. 5 and 6 on consideration that if the loan of the defendant No. 1 is fully paid up, the defendant Nos. 5 and 6 would get back their money with accumulated interest thereon. It was specifically contended that the defendant Nos. 5 and 6 were not entitled to get the interest on the term deposit receipt as prayed for in the said application. 5 and 6 would get back their money with accumulated interest thereon. It was specifically contended that the defendant Nos. 5 and 6 were not entitled to get the interest on the term deposit receipt as prayed for in the said application. ( 7 ) BY order No. 41 dated July 19, 1995 the learned trial judge allowed the said application of the defendant Nos. 5 and 6 and directed the plaintiff-bank to pay the interest accrued on the term deposit receipt mentioned in the plaint to the defendant Nos. 5 and 6 deducting amount of Rs. 25,000/- (Rupees twenty five thousand only within 15 days from the date of the order. The learned judge held that no agreement has been produced by the bank to show that the defendant Nos. 5 and 6 were not entitled to enjoy the interest for the lien of Rs. 25,000/- (Rupees twenty five thousand) only. However, the learned judge observed that admittedly the defendant Nos. 5 and 6 are the guarantors for repayment of the loan, but from the papers produced by the bank it did not appear to her that there was any clause to show that the term deposit receipt is the subject matter of the suit and as such the plaintiff was liable to pay the interest on the said sum of Rs. 25,000/- (rupees twenty five thousand only to the defendant Nos. 5 and 6 after deduction a sum of Rs. 25,000/- (Rupees twenty five thousand) only from that amount. ( 8 ) BEING aggrieved the plaintiff-bank has come up in revision. ( 9 ) MR. Soumen Sen, learned Advocate, for the plaintiff-bank, argued that the learned trial judge misdirected himself in appreciating the agreement between the plaintiff-bank and the defendant Nos. 5 and 6 concerning the said medium term loan. Mr. ( 8 ) BEING aggrieved the plaintiff-bank has come up in revision. ( 9 ) MR. Soumen Sen, learned Advocate, for the plaintiff-bank, argued that the learned trial judge misdirected himself in appreciating the agreement between the plaintiff-bank and the defendant Nos. 5 and 6 concerning the said medium term loan. Mr. Soumen Sen cited the decision in the case of Syndicate Bank v. Vijay Kumar and Others reported in (1992)2 SCC 330 where the Supreme Court of India observed that ?by mercantile system the bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognised and in the absence of an agreement to the contrary, a Banker has a general lien over such securities or bills received from a customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer's debit balance. Such a lien is also applicable to negotiable instruments including FDRs which are remitted to the Bank by the customer for the purpose of collection. There is no gainsaying that such a lien extends to FDRs also which are deposited by the customer. ? ( 10 ) MR. Jyotirmoy Bhattacharya, learned Advocate, appearing for the opposite party Nos. 5 and 6, on the contrary, argued that lien, if any, was on the sum of Rs. 25,000/- (Rupees twenty five thousand) only and not on the interest accrued thereon and, therefore, the learned trial judge was justified in directing the plaintiff-bank to release the amount of interest in favour of the defendant Nos. 5 and 6. Mr. Bhattacharya argued that the defendant No. 5 is a retired person and he needs money. Mr. Bhattacharya referred to section 139 of the Indian Contract Act, 1872 and argued that in view of the clear provisions of the said Act the security offered by the defendant Nos. 5 and 6 has been discharged. The said provisions of section 139 of the India Contract Act, 1872, run as under : ?139. Discharge of surety by creditor's act or omission impairing surety's eventual remedy. 5 and 6 has been discharged. The said provisions of section 139 of the India Contract Act, 1872, run as under : ?139. Discharge of surety by creditor's act or omission impairing surety's eventual remedy. If the creditor does any act which is inconsistent with the rights of the surety, or omits to do any act which his duty to the surety requires him to do, and the eventual remedy of the surety himself against the principle debtor is thereby impaired, the surety is discharged. ? ( 11 ) ADMITTEDLY, the defendant Nos. 5 and 6 jointly with the defendant Nos. 2, 3, 4 and 7 delivered a security delivery letter in favour of the bank, inter alia, concerning term deposit receipt for Rs. 25,000/- (Rupees twenty five thousand) only dated May 13, 1988, standing in the name of defendant Nos. 5 and 6, duly discharged/endorsed in the name of the bank, to hold it as security for all moneys now owing or which shall at any time hereafter be owing from them in any manner whatsoever solely or jointly with the others. The right of the bank was acknowledged, at the discretion of the bank, to renew the security for such period as the bank deem fit and to continue to hold it as security. They authorised bank to appropriate the proceeds of the security including renewed term deposit receipts with interest on/or before the maturity towards liquidation of any of their dues. The Supreme Court of India in the case of Syndicate Bank (supra) held that the lien of the bank extends to fixed deposit receipts, which are deposited by the customer even for the purpose of collection. Section 139 of the Control Act, 1872 speaks of discharge of security by creditor's act or omission impairing surety's eventual remedy. In the case in hand whether the bank did any act which is inconsistent with the rights of the surety or omitted to do any act which its duty to surety requires it to do is a matter in issue in the suit and as such it was impossible to adjudicate the said issue on the basis of affidavits at this stage of the proceeding. ( 12 ) IN my view, the learned trial judge acted illegally or with material irregularity in directing release of the amount by the order impugned before adjudication of the issues in the suit inasmuch as the learned trial judge prejudged the issue involved in the suit at the hearing of the said application filed by the defendant Nos. 5 and 6, more particularly, when the suit was posted for peremptory hearing shortly. The defendant Nos. 5 and 6 stood as guarantors for due repayment of the term loan granted in favour of defendant No. 1. The defendant No. 5 was admittedly an officer of the bank and is expected to know the risk of standing as the guarantor. I, therefore, set aside the order impugned and allow revisional application. I, however, make it clear that I am not to be understood as having said anything on the merits of the suit as I have not finally decided any issue in the suit and all my observation are for the purpose of disposal of the application filed by the defendant Nos. 5 and 6. There will be no order as to costs. I, however, direct the learned trial judge to expedite the hearing of the suit and direct him to dispose of the same by six months from the date of communication of this order to him. Xerox certified copy, if applied for, be supplied to the applicants expeditiously. Application allowed.