Dismissed

R.Shanmugasundaram, v. Deputy General Manager

Madras HC13 Feb 2019WP(MD)/2575/2019

Case brief

AI extract

What is this about?

In a writ petition under Article 226, the petitioner sought release of security documents and pledged jewels after settling an education loan but owing an agriculture loan. The court applied Section 171 of the IPC regarding bankers' lien, ruling the bank could retain security against the balanced general account.

What did the court decide?

Petitioner permitted to liquidate jewel loan liability but not entitled to immediate return of pledged jewels as of right.

R.Shanmugasundaram, Vs Deputy General Manager — Contract and Commercial Disputes | Madras HC (2019)

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 13.02.2019

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CORAM :

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THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN WP(MD)No.2575 of 2019

R.Shanmugasundaram

... Petitioner

Vs.

1.Deputy General Manager,

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Canara Bank, Canara Bank Circle Office, St.Mary's Campus, East Veli Veethi,

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Madurai District.

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2.Assistant General Manager,

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Canara Bank, Door No.585, Priyanga Complex, 1^st Floor,

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Periakulam Road, Theni District.

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3.The Branch Manager, Canara Bank, No.16, Kamarajar Bazar, Bodinayakkanur,

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Theni District. ... Respondents

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PRAYER : Writ Petition is filed under Article 226 of the Constitution of India, to issue a Writ of Mandamus, to release the document given as security for the Education Loan No.10002651008580, since settled on 20.01.2018 and further to accept the payments in full settlement towards liability in Gold Loan Nos.GL100284269742, GL100284269743 and to return my jewels by considering the representation dated 05.01.2019.

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For Petitioner : Mr.I.Pinaygash

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For Respondents : Mr.Pala.Ramasamy

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ORDER

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The writ petitioner had availed three loans from the respondent bank. They are educational loan, agriculture loan and jewel loan. In fact, the accounts are five in number. The petitioner had settled the educational loan in full. The petitioner is ready to pay the jewel loan also. The petitioner therefore wants the documents offered as security and the jewels pledged by him. Since the third respondent has declined to accept the request of the petitioner, this writ petition came to be filed.

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2.Heard the learned counsel on either side.

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3.Section 171 of the Indian Contract Act reads as under :

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“171.General lien of bankers, factors, wharfingers, https://hcservices.ecourts.gov.in/hcservices/ attorneys and policy-brokers.-Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain

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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.”

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4.That apart, the Hon'ble Division Bench in the decision reported in (2019) 1 MLJ 257 dealt with a similar issue and negatived the plea of the borrower. The writ petitioner can profitably read para 10, 11 and 12 of the said decision. When the petitioner is having more than one transaction with the bank unless the petitioner is willing to clear all the accounts, the petitioner is not entitled to take back the security offered. The bank is merely enforcing its statutory right of lien. It is true that the writ petitioner is ready to clear the jewel loan. But then, the petitioner has not cleared the agricultural loan. Therefore, the bank is entitled to retain whatever security was offered by the writ petitioner. Therefore, I am not in a position to grant any relief to the writ petitioner.

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5.This writ petition is liable to be dismissed. Accordingly, it is dismissed. The learned counsel appearing for the writ petitioner at this stage states that the writ petitioner would like to clear the jewel loan. He specifically alleges that the bank is not permitting the writ petitioner to liquidate the liability incurred in respect of the jewel loan account. The petitioner is permitted to liquidate the jewel loan liability. But then, the petitioner will not be entitled to return of the pledged jewels as of right. It is of course open to the writ petitioner to submit a representation to the Assistant General Manager, Canara Bank, Theni District.

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6.This Court has only clarified the legal position. It is always open to the banking authorities to take a sympathetic view of the matter and grant relief to the petitioner. The petitioner states that he would liquidate the jewel loan liability within a period of one week from the date of receipt of a copy of this order and submit a representation to the bank immediately. Upon receipt of such representation, the concerned authority shall pass appropriate orders within a period of two weeks from the date of receipt of a copy of this order. The learned counsel for the bank states that the educational loan was an unsecured one. This is rebutted by the petitioner's counsel who would state that he is having proof to the contrary. No costs.

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Assistant Registrar (T AND P) // True Copy //

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https://hcservices.ecourts.gov.in/hcservices/

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Sub Assistant Registrar

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3 TO: 1.Deputy General Manager, Canara Bank, Canara Bank Circle Office, St.Mary's Campus, East Veli Veethi, Madurai District. 2.Assistant General Manager, Canara Bank, Door No.585, Priyanga Complex, 1^st Floor, Periakulam Road, Theni District. 3.The Branch Manager, Canara Bank, No.16, Kamarajar Bazar, Bodinayakkanur, Theni District. +1 CC to M/s.I.PINAYGASH, Advocate ( SR-46933[F] dated 14/02/2019 ) +1 CC to M/s.PALA.RAMASAMY, Advocate ( SR-47211[F] dated 14/02/2019 )

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WP(MD)No.2575 of 2019

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13.02.2019

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DS/ /SAR- (27.03.2019) 3P 7C

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https://hcservices.ecourts.gov.in/hcservices/

R.Shanmugasundaram, v. Deputy General Manager

Case brief

What is this about?

What did the court decide?

R.Shanmugasundaram, v. Deputy General Manager

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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Coram

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