Dismissed

P.Santhakumary Amma v. Indian Overseas Bank

Kerala HC24 Nov 2023WP(C)/19821/2023

Case brief

AI extract

What is this about?

Petitioners sought return of title deeds from a public sector bank after discharging a loan. The bank refused, claiming a general lien under Section 171 of the Indian Contract Act for separate dues where the deceased debtor was a guarantor. The High Court held the writ petition maintainable but dismissed it, ruling the bank's lien extended to title deeds for the guarantee debt.

What the court decided

AI extract

P.Santhakumary Amma Vs Indian Overseas Bank — Contract and Commercial Disputes | Kerala HC (2023)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR.JUSTICE VIJU ABRAHAM

¶4

FRIDAY, THE 24^TH DAY OF NOVEMBER 2023 / 3RD AGRAHAYANA, 1945

¶5

WP(C) NO. 19821 OF 2023

¶6

PETITIONERS:

¶7

1 P.SANTHAKUMARY AMMA AGED 81 YEARS W/O LATE P. GOPINATHANPILLAI RESIDING AT HOUSE NO.1, MUSALIAR NAGAR, BRINDAVAN GARDENS, KILIKOLLUR .P.O., KOLLAM, PIN - 691004

¶8

2 S. DEVIKA @ DEVIKA PILLAI AGED 56 YEARS D/O LATE GOPINATHAN PILLAI, HOUSE NO.1, MUSALIAR NAGAR, BRINDAVAN GARDENS, KILIKOLLUR .P.O., KOLLAM, PIN - 691004

BY ADVS.T.M.CHANDRAN

S.SUJITH

RESPONDENTS:

1 INDIAN OVERSEAS BANK REPRESENTED BY SENIOR MANAGER, CHINNAKADA BRANCH, KOLLAM, PIN - 691001

¶13

2 ASSISTANT GENERAL MANAGER CUSTOMER SERVICE DEPARTMENT, INDIAN OVERSEAS BANK, CENTRAL OFFICE, CHENNAI, PIN - 600002

¶14

3 S. GOPIKA @ GOPIKA PILLAI D/O LATE GOPINATHAN PILLAI, 314, QUTUB VIEW APARTMENTS, NEAR DADA BARI JAIN MANDIR, WARD NO 8, MEHRALI, NEW DELHI, PIN - 110030

¶15

4 S.AMBIKA @ AMBIKA PILLAI D/O LATE P. GOPINATHAN PILLAI , 72/1 WESTERN AVENUE, OLD HOUSE NO. 86 BETWEEN W.G.8 & W10, SAINIK FARMS, NEW DELHI, PIN - 110062

¶16

5 S. RENUKA @ RENUKA NAYAR D/O LATE P. GOPINATHAN PILLAI 603, PANORAMA TOWER, B WING, YARI ROAD, VERSOVA , ANDHERI (W) MUMBAI, PIN - 400061 BY ADVS. Sunil Shankar A VIDYA GANGADHARAN(K/000424/2020) JERIN GEORGE(K/863/2023)

¶17

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶18

W.P.(C). No.19821 of 2023

“CR”

:2:

VIJU ABRAHAM, J.

W.P.(C). No.19821 of 2023

¶24

- - - - Dated this the 24^th day of November, 2023

¶25

JUDGMENT

¶26

The above writ petition is filed seeking to quash Exts. P3, P5 and P6 and for a further direction commanding respondents 1 and 2 to return the title deed Nos.2031/1973, 194/1953 and 307/1964 of SRO Palugal, Kanyakumari district, Tamil Nadu to the legal heirs of Shri. P.Gopinathan Pillai,(the petitioners and the respondent Nos. 3, 4 and 5) without any delay.

¶27

The short facts necessary for the disposal of this writ petition are as follows: The petitioners and the respondents 3 to 5 are the only legal heirs of late Shri. P. Gopinathan Pillai, who was the proprietor of M/s.Laxmi Cashew Corporation at Kollam. The said Gopinathan Pillai died on 09.05.2003. Cash credit facilities were availed from respondent No.1 by late Sri. P. Gopinathan Pillai in the year 1997 as proprietor of M/s.Laxmi Cashew Corporation, mortgaging immovable properties and the

¶28

:3:

¶29

W.P.(C). No.19821 of 2023

¶30

said liability has been satisfactorily discharged in the year 1999 by paying the full amount along with interest. The said properties were not secured for any other loan and have also not availed of any other loan from the respondent bank. The legal heirs of the said late Sri. P. Gopinathan Pillai came to know that respondent No. 1 bank has filed suits as O.S Nos. 1 to 7 of 1987 before the Principal Sub Court, Kollam for the realisation of money from a Group of Companies, altogether seven in number, known as KJP Group. In the said suit, Sri. P. Gopinathan Pillai was not impleaded as a party and his properties were also not scheduled in the plaint. The said suits were compromised between the parties in the suit and in some compromise petitions, the signature of Sri. P. Gopinathan Pillai was obtained by the bank. In terms of the compromise, the Sub Court has passed the judgment and decree. In all the decrees, 28 items of properties belonging to the company were scheduled as mortgaged properties, whereas the properties of Sri P. Gopinathan Pillai were not scheduled in the decrees. The properties of Sri. P.Gopinathan Pillai has not been given as security for the loan availed by KJP Group of

¶31

W.P.(C). No.19821 of 2023

¶32

:4:

¶33

Companies from the 1^st respondent Bank. The present stand of the bank is that since Sri. P. Gopinathan Pillai has given personal guarantees to the said loans, even after satisfactorily discharging all the amounts due towards the bank, availed by Sri. Gopinathan Pillai in 1999, the title deeds of the mortgaged properties cannot be returned back to the petitioners and respondents 3, 4 and 5. It is aggrieved by the inaction on the part of the 1^st respondent bank in not returning the title deeds of the properties of Sri. P. Gopinathan Pillai, after closing the liabilities as early as in the year 1999, the petitioners have approached this Court.

¶34

A detailed counter affidavit has been filed by the 1^st respondent wherein a preliminary objection was raised regarding the maintainability of the writ petition. The 1^st respondent would contend that the retention of title deeds is in the course of the normal commercial business of the respondent Bank and no public duty is being discharged by the 1^st respondent in this regard and therefore, the writ petition is not maintainable. The 1^st respondent in the counter affidavit would admit that the loan was availed by late Sri. P. Gopinathan Pillai, who was the proprietor of

¶35

:5:

¶36

W.P.(C). No.19821 of 2023

¶37

M/s Laxmi Cashew Corporation and that the said credit facilities availed by the Corporation were closed in the year 1995. It is further averred that the said late Sri. Gopinathan Pillai was a guarantor to the credit facilities availed on by M/s. KJP Group of Companies and the accounts were classified as NPA and thereupon legal proceedings were initiated. Bank attempted to proceed against various properties of the said company and properties situated in Tamil Nadu were sold through DRT proceedings. The properties situated in Kerala were under Sales Tax attachment, and therefore, the properties were released on payment of Rs. 725 Lakhs. Though the properties in Hyderabad were also proceeded against, proceedings are pending before the courts in respect of the said properties. It is the case of the respondent bank that as on 23.03.2023, an amount of Rs.34.18 Crores is due under the credit facilities availed by the borrowers and the late Sri. Gopinathan Pillai was a guarantor to the said credit facilities. In view of the above, the request of the petitioners to release the title deeds of the properties was rejected by the respondent Bank. The said title deeds were

¶38

W.P.(C). No.19821 of 2023

¶39

:6:

¶40

retained in the exercise of its general lien under Section 171 of the Indian Contract Act, 1872(in short “the Act 1872”), since the late Gopinathan Pillai had extended his personal guarantee for the credit facilities availed of by M/s. KJP Group of Companies. In support of his contention, the 1^st respondent relies on the judgment of the Apex Court in Syndicate Bank v. Vijay Kumar [AIR 1992 SC 1066] . It is also submitted that though the legal heirs of late Sri. Gopinathan Pillai had filed a complaint before the Banking Ombudsman, the same was closed on finding that the said complaint is not maintainable. In view of the above, it is contended that the petitioners are not entitled to any of the reliefs sought for in this writ petition.

¶41

In answer to the counter affidavit filed by the 1^st respondent, a detailed reply was preferred, wherein the petitioners have specifically denied the contention taken in the counter affidavit that the writ petition is not maintainable mainly contending that the respondent bank being 'State' within the meaning of Article 12 of the Constitution of India, a writ petition is maintainable and that the retention of the title deeds even after

¶42

:7:

¶43

W.P.(C). No.19821 of 2023

¶44

discharge of the whole liability cannot be treated as the enforcement of a contract. Merely on the ground of personal guarantee allegedly given by late Sri. P. Gopinathan Pillai to the credit facilities availed on by KJP Group of Companies, the title deeds secured for raising another loan cannot be retained in view of discharge of the entire liability in that account. The decision in Syndicate Bank' s case cited (Supra) cannot be made applicable to the facts and circumstances of the present case.

¶45

Heard Adv. Sri. T. M. Chandran, the learned counsel appearing for the petitioners and also Adv. Sunil Shanker, the learned counsel appearing for the 1^st respondent Bank.

¶46

Admittedly, the whole liability under the loan availed by late Sri. P. Gopinathan Pillai has been satisfactorily discharged in the year 1999 by paying the full amount along with interest. The stand taken by the respondent bank is that late Sri. P. Gopinathan Pillai has given his personal guarantee for the facilities availed by the KJP Group of Companies from the bank and huge amounts are due from the said firm, which has not been settled yet. It is in the said background, the claim of the petitioners for release of the

¶47

:8:

¶48

W.P.(C). No.19821 of 2023

¶49

title deeds of the property, and the claim of the respondent bank to retain the title deed mortgaged for availing the said loan on the strength of Section 171 of the Act, 1872 exercising the general lien applicable to the banker, is to be considered. The learned Standing counsel for the respondent bank has also taken a contention that in the nature of the issue involved in this case, a writ petition is not maintainable, inasmuch as the bank is not exercising any public duty. Therefore, the said issue regarding the maintainability of the writ petition has to be decided first.

¶50

The learned counsel for the 1st respondent bank in support of his contention that the writ petition is not maintainable relies on the judgment in Unimoni Financial Services Ltd. v. IDBI Bank Ltd and Ors . [2020 SCC online KER 7347] , Federal Bank v. Sagar Thomas [(2003)10 SCC733 ] and the decision in Sleebachan v. State of Kerala. [2020(5) KLT SN 11] . This Court in Unimoni Financial Services Ltd. 's case cited (Supra) was considering a case wherein a request made for the return of the original documents was declined by the bank taking a contention that the processing fee to the tune of Rs.11

¶51

:9:

¶52

W.P.(C). No.19821 of 2023

¶53

Lakhs is yet to be paid. In the said case, this Court has held that providing of credit facility or providing of loan on the strength of title deeds given in security cannot be said to be done in discharge of any public function and declined the request for release of title deeds. Sleebachan 's case cited (Supra) was a case where the bank declined to issue solvency certificate as demanded by the petitioner therein and this Court held that the bank is not performing any public duty and therefore, the writ petition is not maintainable. The Apex Court in Sagar Thomas 's case cited (Supra), was considering a case of termination of a bank manager and the court upheld the contention of the Bank that it is a private bank and not a 'State' or an instrumentality within the meaning of Article 12 of the Constitution of India and therefore held that a writ petition is not maintainable. Per contra, the learned counsel appearing for the petitioner would rely on the judgment in Zonal Manager, Central Bank of India v. Devi Ispat Ltd.[2010 (11) SCC 186] . In the said case, the request made by the respondent therein was to return the security documents, for issuance of a no-objection certificate and a no-due

¶54

W.P.(C). No.19821 of 2023

¶55

:10:

¶56

certificate. The Apex Court after going through various precedents on the point, held in paragraphs 29 and 30 as follows:

¶57

“29. In the case on hand, it is not in dispute that the appellant Bank, being a public sector bank, discharging public functions is "State" under Article 12. In view of the settlement of the dues on the date of filing of the writ petition by arrangement made through another nationalised bank, namely, State Bank of India and the statement of accounts furnished by the appellant Bank subsequent to the same i.e. on 14-5-2009 is 0.00 (nil) outstanding, we hold that the High Court was fully justified in issuing a writ of mandamus for return of its title deeds.

¶58

30. In the light of the above conclusion, we are unable to accept the claim of the appellant Bank and on the other hand, we are in entire agreement with the direction issued by the learned Single Judge affirmed by the Division Bench. Consequently, the appeal of the Bank is dismissed. The appellant Bank is directed to return the title deeds deposited-by the respondent Company within a period of two weeks from today. With- the above direction, the civil appeal is dismissed. No order as to costs.”

¶59

(underline supplied)

¶60

In the present case also the respondent bank being a public sector bank and the contention of the petitioner is that the claim

¶61

W.P.(C). No.19821 of 2023

¶62

:11:

¶63

due to the bank has been fully settled, going by the judgment in Zonal Manager, Central Bank of India' s case cited (Supra), I am of the opinion that this writ petition is maintainable before this Court.

¶64

The next question to be considered is regarding the exercise of banker's lien as provided in Section 171 of the Act 1872. For consideration of the said issue involved, it is profitable to extract Section 171 of the Act, 1872, which reads as follows:

¶65

Section 171:- General lien of bankers, factors,

¶66

wharfingers, attorneys and policy-brokers .

¶67

Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect.

¶68

The learned counsel for the respondent bank contended that going by the said definition of the general lien of bankers as obtained in Section 171 of the Act 1872, the bank is well within its powers to retain the title deeds of the property as security for the amount due from M/s KJP Group of Companies. The learned

¶69

W.P.(C). No.19821 of 2023

¶70

:12:

¶71

counsel relies on the judgment in Syndicate Bank ’ s case cited (Supra) to substantiate his contention. The Apex Court in the said judgment has extracted the definition of the banker's lien as given in various classic reference books and in judgments on this point and I am of the opinion that a reference to those definitions is absolutely necessary for proper consideration of the issues involved and paragraph 6 of the judgment is extracted below:

¶72

6. In Halsbury's Laws of England , Vol.20, 2nd Edn.p.552, para 695, lien is defined as follows:

¶73

Lien is in its primary sense is a right in one man to retain that which is in his possession belonging to another until certain demands of the person in possession are satisfied. In this primary sense it is given by law and not by contract.

¶74

In Chalmers on Bills of Exchange , Thirteenth Edition Page 91 the meaning of "Banker's lien" is given as follows:

¶75

A banker's lien on negotiable securities has been judicially defined as "an implied pledge."A banker has, in the absence of agreement to the contrary, a lien on all bills received from a customer in the ordinary course of banking business in respect of any balance that may be due from such customer."

¶76

In Chitty on Contract , Twenty-sixth Edition, Page 389, Paragraph 3032 the Banker's lien is explained as under:

¶77

W.P.(C). No.19821 of 2023

¶78

:13:

¶79

By mercantile custom the banker has a general lien over all forms of commercial paper deposited by or on behalf of a customer in the ordinary course of banking business. The custom does not extend to valuables lodged for the purpose of safe custody and may in any event be displaced by either an express contract or circumstances which show an implied agreement inconsistent with the lien. The lien is applicable to negotiable instruments which are remitted to the banker from the customer for the purpose of collection. When collection has been made the proceeds may be used by the banker in reduction of the customer's debit balance unless otherwise earmarked.

¶80

(emphasis supplied)

¶81

In Paget's Law of Banking , Eighth Edition, Page 498 a passage reads as under;

¶82

THE BANKER'S LIEN Apart from any specific security, the banker can lock to his general lien as a protection against loss on loan or overdraft or other credit facility. The general lien of bankers is part of law merchant and judicially recognised as such.

¶83

In Brandao v. Barnett, (1846)12 Cl. and Fin.787 it was stated as under:

¶84

Bankers most undoubtedly have a general lien on all securities deposited with them as bankers by a customer, unless there be an express contract, or circumstances that show an implied contract, inconsistent with lien. The above passages go to show that by mercantile

¶85

W.P.(C). No.19821 of 2023

¶86

:14:

¶87

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.

¶88

(underline supplied)

¶89

It is also profitable to refer to the definition of ‘general lien’, ‘lien’ and ‘banker’s lien’ as defined in Black’s Law Dictionary , 8^th edition, which reads as follows:

¶90

General lien: “A possessory lien by which the lien-holder may retain any of the debtor's goods in the lienholder's possession until any debt due from the debtor, whether in connection with the retained goods or otherwise, has been paid.

¶91

Lien: “A legal right or interest that a creditor has in another's property , lasting usu,until a debt or duty that it secures is satisfied. Typically, the creditor does not

¶92

W.P.(C). No.19821 of 2023

¶93

:15:

¶94

take possession of the property on which the lien has been obtained”.

¶95

Banker's lien: “the right of a bank to satisfy a customer's matured debt by seizing the customer's money or property in the bank's possession”.

¶96

The Apex Court in Syndicate bank ’s case cited (Supra), after considering various definitions of ‘banker’s lien’ and the contentions of the parties, has held that a bank can exercise general lien over all forms of deposits or securities made by or on behalf of the customer in the ordinary course of banking business. In answer to the same, the learned counsel for the petitioners would contend that the said judgment in Syndicate Bank ’s case cited (Supra) is not applicable in the facts and circumstances of the present case. He relies on the judgment of this Court in PNB Vesper Life Science Pvt. Ltd. v. Registrar of Co-operative Societies [2023 (3) KLT 594], State Bank of India and Others v. Jayanthi and Others [Manu/TN/2511/2011] and Sunil Ratnakar Gutte v. Union Bank of India [AIR 2022 Bombay 195] in support of his contention. Further, the learned counsel for the petitioners attempted to substantiate that the

¶97

:16:

¶98

W.P.(C). No.19821 of 2023

¶99

Apex Court judgment in Syndicate Bank ’s case cited (Supra) is not applicable in the facts and circumstances of the present case by relying on the judgment in Alekha Sahoo v. Puri Urban Cooperative Bank Ltd. [AIR 2004 Orissa 142] . The learned counsel for the petitioners submitted that in Alekha Sahoo ’s case cited (Supra), the Orissa High Court has held that in Syndicate Bank’s case cited (Supra), the Apex Court has not laid down any law that the bank can exercise its general lien under Section 171 of the Act, 1872 over the properties of the sureties for the liabilities of the principal debtor to the bank and further held that, in the said judgment of the Apex Court, to hold that the bank has a general lien, the court considered the fact that there were two letters executed by the judgment debtor therein, which created a lien in favour of the bank over the two Deposit Receipts,expressly agreeing that the bank would have a lien over the Fixed Deposit Receipts.

¶100

Let me consider the contention raised by the learned counsel for the petitioners that the Apex Court in Syndicate Bank’s case cited (Supra) has not laid down any law regarding

¶101

:17:

¶102

W.P.(C). No.19821 of 2023

¶103

the entitlement of the bank to exercise general lien as provided under Section 171 of the Act, 1872. The Apex Court in Syndicate Bank’s case cited (Supra) held in paragraph 7 of the judgment as follows:

¶104

7. Applying these principles to the case before us we are of the view that undoubtedly the appellant Bank has a lien over the two FDRs. In any event the two letters executed by the Judgment-debtor or 17.9.80 created a general lien in favour of the appellant Bank over the two FDRs. Even otherwise having regard to the mercantile custom as judicially recognised the banker has such a general lien over all forms of deposits or securities made by or on behalf of the customer in the ordinary course of banking business. The recital in the two letters clearly creates a general lien without giving any room whatsoever for any controversy.

¶105

( underline supplied)

¶106

In view of the findings in the Apex Court judgment in Syndicate Bank ’s case cited (Supra) that the banker has a general lien over all forms of deposits or securities made by or on behalf of the customer in the ordinary course of banking business, I am unable to accept the contention of the counsel for the petitioner that the Apex Court has not laid

¶107

:18:

¶108

W.P.(C). No.19821 of 2023

¶109

down any law regarding the banker’s lien. In view of the above, I am unable to follow the decisions in Alekha Sahoo ’ s case cited (Supra) and the judgments in PNB Vesper Life Science ’s case cited (Supra) and Sunil Ratnakar Gutte ’s case cited (Supra), which are not applicable in the facts and circumstances of this case.

¶110

Section 171 of the Act, 1872 deals with the general lien of bankers and going by the first limb of the said section, the Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them. The second limb of Section 171 of the Act, 1872 states that no other persons have a right to retain, as a security for such balance, goods bailed to them unless there is an expressed contract to that effect. So going by the tenor of Section 171 of the Act, 1872, as regards the bankers and other four entities mentioned therein, they have a general lien to retain a security for a general balance of account for any goods bailed to them but for other entities other than the five mentioned in the

¶111

:19:

¶112

W.P.(C). No.19821 of 2023

¶113

said Section, they can have a right to retain any goods bailed to them only if there is an expressed contract to that effect. So going by the definition of general lien of banker’s as given in Section 171 of the Act, 1872, and the definitions as stated above, the banker has in the absence of a contract to the contrary, a general lien on all securities deposited with them as banker’s by a customer in respect of any balance that may be due from the said customer.

¶114

A similar view was taken by this Court in Nakulan v. Canara Bank [2014 (1) KLT 125] which held in paragraph 11 as follows:

¶115

“11. A reading of the judgment of the learned Single Judge in W.P.(C) No.5670/2013 from which W.A.No.656/2013 was filed would indicate the circumstances under which the right of general lien of the Bank was refused. It appears that the Bank had no case therein that the security furnished for the housing loan and the loan availed by a proprietary concern was inadequate and hence the general lien is to be exercised. It would be inappropriate for me to discuss more about the implications of the judgment in W.A.No.656/2013 since the same has not become final as indicated above. The Bank in the instant case has a specific plea that the

¶116

W.P.(C). No.19821 of 2023

¶117

:20:

¶118

personal loan availed by the petitioner on the basis of a demand promissory note is without any security and that the gold ornaments have to be retained. Therefore nothing deters me from relying on Section 171 of the Act and following the dictum in Syndicate Bank's case supra to hold that the Bank is entitled to retain as security the gold ornaments pledged till the personal loan is also cleared. The prayer of the petitioner for a direction to the Bank to release the gold ornaments pledged on his clearing the gold loan keeping the personal loan in tact is hereby declined.”

¶119

This Court in P. V. Hariharan v. The Indian Overseas Bank (W.P.(C) No.10707 of 2019) was dealing with a similar circumstance and in paragraph 15 of the said judgment held as follows:

¶120

“15. Therefore, the sum and substance of the contention advanced by the learned Standing Counsel for the respondents is that, apart from the liability of the petitioner personally, petitioner has extended personal guarantee against cash credit and term loan facilities availed by an establishment belonging to his wife as well as a co-obligant to the educational loan. These aspects are not disputed by the petitioner. Evidently, substantial amounts are due from that accounts and, therefore, having extended personal guarantee and is a co-obligant against the facilities availed by the wife and daughter of

¶121

W.P.(C). No.19821 of 2023

¶122

:21:

¶123

the petitioner, I am of the considered view, the general lien as is provided under Sec.171 of the Indian Contract Act, 1872 clearly applies to the fact and circumstances of the case. Even though learned counsel for the petitioner has advanced a contention that Sec.171 of Act, 1872 will not apply to immovable properties, I am of the view, the Bank has exercised its general lien as per Sec.171 against the title deed deposited by the petitioner against the loan availed by him, and since the petitioner is still indebted to the Bank on account of other transactions, Bank is entitled as of right to exercise the general lien under Sec.171 of Act, 1872. So also, it is clear from the judgments cited by learned Standing Counsel for the respondents that the title deed of an immovable property is not excluded from the general lien, clearly evident from the principles of law laid down by the apex court as is discussed above.

¶124

Another aspect to be considered is as to whether the amount due to the bank in another account of which late Sri. P. Gopinathan Pillai was admittedly a guarantor will come within the meaning of general balance of account as provided in Section 171 of the Act, 1872. Section 128 of the Act, 1872 deals with liabilities of sureties, which reads as follows:

¶125

“128. Surety’s liability.—The liability of the surety is coextensive with that of the principal debtor, unless it is

¶126

W.P.(C). No.19821 of 2023

¶127

:22:

¶128

otherwise provided by the contract."

¶129

Going by Section 128, the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. Therefore, late Sri. P. Gopinathan Pillai being a guarantor, his liability towards the repayment of the amount due from the KJP Group is co-extensive with the principal borrower. Learned counsel for the petitioners would rely on the judgment in Jayanthi ’s case cited (supra) as well as Sunil Ratnakar Gutte 's case cited (supra) to contend for the position that when mortgage by deposit of title deed was created for a specific purpose to cover an advance for a specific loan, the bank cannot hold the documents for a balance due in different loan, of which the party is not a borrower. A combined reading of Sections 128 and 171 of the Act, 1872 makes it clear that late Shri. P. Gopinathan Pillai being a guarantor, for another loan which is admittedly in default, the general balance of account would take in not only the loan amount availed by him as a principal debtor but also the liability due towards another loan account of which he is a guarantor in as much as Section 128 provides that the liability of the surety is co-

¶130

W.P.(C). No.19821 of 2023

¶131

:23:

¶132

extensive with that of the principal debtor. The Apex Court in The Board of Trustees of the Port of Bombay and Others v. Sriyanesh Knitters, (1999) 7 SCC 359, though while considering the right of general lien exercised by Wharfage, held in paragraph 29 and 30 as follows:

¶133

‘29. Attractive as it may appear, we do not find any merit in the aforesaid submission. The first part of Section 171 of the Contract Act identifies five categories of persons who can have a general lien and retain the goods bailed to them. Wharfinger is one of them. The submission of the learned counsel for the respondents does not take into account the fact that Section 171 of the Contract Act enables these five categories to retain as security the goods bailed to them in respect of “general balance of account”. The general balance of account has to be of the amount legally due to bankers, factors, wharfingers, attorneys and policy-brokers. The appellants come in the category of wharfingers, namely, the owners of the wharf. The duties which they are required to perform are provided in the statute itself, namely, Section 42 of the MPT Act. In other words the services which are undertaken under Section 42 have to be paid for and any amount due in respect thereof will be regarded as “general balance of account”. There is no reason to give a restricted meaning to the expression “general balance of account” to mean only wharfage charges which,

¶134

W.P.(C). No.19821 of 2023

¶135

:24:

¶136

according to the respondents, would imply the charges for loading or unloading of goods, and would not include demurrage. Once goods are taken charge of by the appellants as wharfingers then in respect of the services rendered, as contemplated by Section 42, if there is any amount which is due and payable to it the same would be regarded as “general balance of account” in respect of which it has a general lien over the goods bailed to it.

¶137

30. In our opinion the circular dated 2-10-1979 issued by the appellants was valid and the appellants could retain the goods which were in their possession as bailees as security for realisation of the amount of wharfage, demurrage and other charges which were due to them. We accordingly allow these appeals and set aside the judgment of the High Court with the result that the writ petitions filed by the respondents in the High Court stand dismissed. The appeals are allowed with costs throughout.’

¶138

(underline supplied)

¶139

The Apex Court in the above said judgment has held that the general balance of account has to be of the amount legally due to bankers, factors, wharfingers, attorneys and policy-brokers and held that a restrictive meaning cannot be given to the expression general balance of account and any

¶140

:25:

¶141

W.P.(C). No.19821 of 2023

¶142

amount which is due and payable would be regarded a general balance of account in respect of which they will have a general lien over the goods bailed to it. In view of the decision of the Apex Court as above, it could be safely concluded that general balance of account would include any amount legally due to the respondent bank which even includes amount due to the bank from KJP group of companies for which late Shri. P. Gopinathan Pillai was admittedly a guarantor.

¶143

In view of the above, I am of the opinion that the bank is entitled to retain the title deeds exercising their general lien as provided in Section 171 of the Act, 1872 and the request of the petitioners for the return of the title deeds to the legal heirs of late Sri. P.Gopinathan Pillai cannot be granted. The writ petition is accordingly dismissed.

¶144

Sd/-

¶145

VIJU ABRAHAM JUDGE

¶146

sm/

¶147

W.P.(C). No.19821 of 2023

¶148

:26:

¶149

¶150

PETITION	ER EX	HIBITS
Exhibit	P1	A TRUE COPY SENT BY THE RELEASE THE	OF THE LETTER DATED 23-02-2007 LEGAL HEIRS REQUESTING TO TITLE DEEDS
Exhibit	P2	A TRUE COPY SEND BY THE FIRST RESPON	OF THE LETTER DATED 09-01-2022 FIRST P:ETITIONER BEFORE THE DENT.
Exhibit	P3	TRUE COPY OF SENT BY THE PETITIONER	THE LETTER DATED 11-04-2022 RBI OMBUDSMAN TO THE FIRST
Exhibit	P4	A TRUE COPY SENT BY THE OMBUDSMAN.	OF THE LETTER DATED 13-04-2022 FIRST PETITIONER BEFORE THE RBI
Exhibit	P5	A TRUE COPY SENT BY THE COMPLAINT IS REPLY GIVEN	OF THE REPLY DATED 06-05-2022 OMBUDSMAN STATING THAT THE NOT MAINTAINABLE IN VIEW OF THE FROM THE RESPONDENT NO.2
Exhibit	P6	A TRUE COPY SENT BY THE	OF THE REPLY DATED 11-07-2022 RESPONDENT NO.2
Exhibit	P7	TRUE COPY OF VALUATION RE THE FAIR MAR	THYE RELEVANT PORTION OV THE PORT DATED 24.08.2019 SHOWING KET VALUE.

P.Santhakumary Amma v. Indian Overseas Bank

Case brief

What is this about?

What the court decided

P.Santhakumary Amma v. Indian Overseas Bank

Case brief

What is this about?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Akhil Shaji, Vs State of Kerala

M/S.Himavarsha Kuries Private Limited (in Liquidation) Vs Shajahan K.A.

Leela, Vs the Sub Collector, Tirur

M.M. Salim Vs Secretary to Government

M.U.Thomas Vs State of Kerala

Sebastian Vs State of Kerala