JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

                 The petitioner / complainant took a loan of Rs.35,000/- from the respondent bank on 19.7.2007.  He also took a loan of Rs.17,200/- against pledge of his gold.  The petitioner / complainant had also stood as a guarantor for repayment of the loan taken by as many as 12 persons from the respondent bank.  The case of the petitioner / complainant is that in May, 2009 he approached the respondent for repayment of the loan of Rs.17,200/- taken against the pledge of the gold jewelry but the bank refused to accept repayment of the said loan.  He therefore approached the concerned District Forum by way of a consumer complaint, seeking direction to the bank to accept the repayment of the said loan and release his gold ornaments.

2.      The complaint was resisted by the respondent bank which denied the allegation that the complainant had approached it in Mya, 2009 for repayment of the loan taken against the pledge of gold jewelry.  It was also stated in the reply that besides himself having taken loan in two separate account, the petitioner had stood as guarantor for repayment of the loan taken by as many as 12 individuals.

3.      The District Forum vide its order dated 22.2.2010 allowed the complaint and directed the complainant to deposit the gold loan with the respondent bank, which was directed to release the ornaments of the petitioner / complainant to him on receiving the said gold loan with interest upto August, 2009. 

4.      Being aggrieved from the order passed by the District Forum, the respondent bank approached the concerned State Commission by way of an appeal.  Vide impugned order dated 29.7.2016, the State Commission allowed the appeal filed by the bank and consequently dismissed the complaint.  Being aggrieved, the petitioner / complainant is before this Commission by way of this revision petition. 

5.      The first question which arises for consideration is as to whether the petitioner / complainant had approached the bank in May, 2009 with an offer to refund the loan which he had taken against the pledge of the gold ornaments.  As noted earlier, the aforesaid allegation has been denied by the respondent bank.  No documentary proof of having approached the bank in May, 2009, for repayment of the loan has been produced by the petitioner.  Had he made such a request, he would have taken an acknowledgement from the bank while submitting his request and would have then filed that acknowledgement before the District Forum.  That having not been done, the obvious inference is that he had not approached the bank with an offer to repay the loan taken by him against the pledge of his jewelry. 

6.      Even otherwise, considering that as many as 12 borrowers who had taken loans on the strength of the guarantee furnished by the petitioner had defaulted in repayment of the said loan, the petitioner was not entitled to release of the gold pledged by him with the bank, without those persons settling their loan accounts with the respondent bank. 

7.      A similar issue came up for consideration of this Commission in State Bank of India Vs. Kumari Sunita in revision petition No.4039 of 2014 decided on 23.11.2015.  In that case, one Smt. Janki Devi had stood as guarantor for a loan taken by one Mr. Mahesh Kumar deposited her FDR with this bank which had extended the loan.  Since the loan was not repaid by Mahesh Kumar, the bank filed a Civil Suit against Janki Devi as well as Mahesh Kumar.  The FDR in favour of Smt. Janki Devi matured during the pendency of the suit and maturity amount was adjusted in the loan account of Mahesh Kumar.  From being denied the maturity amount of the FDRs, the legal heirs of Smt. Jank Devi approached the concerned District Forum by way of a consumer complaint.  The complaint was resisted by the petitioner which claimed that since Janki Devi has stood as a guarantor for the loan taken by Mahesh Kumar and the said loan had not been paid, they were entitled to adjust the FDR proceeds against the outstanding in the loan amount of Mahesh Kumar.  Upholding the plea taken by the bank this Commission, inter-alia observed and held as under:

          “6.      Section 171 of the Indian Contract Act to the extent it is relevant provides that the bankers 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 aforesaid section came up for consideration of the Hon’ble Supreme Court in Syndicate Bank vs. Vijay Kumar & Ors., AIR 1992 SC 1066.  In the aforesaid case, the respondent no. 3 before the Hon’ble Supreme Court deposited two sums, one of Rs. 65,000/- and the other of Rs. 25,000/-, by way of two separate fixed deposits receipts, so as to enable the Bank to furnish a bank guarantee on behalf of judgment debtor firm in favour of the Registrar, High Court of Delhi.  The fixed deposits receipts were duly discharged by signing on their reverse.  Later, the Bank guarantee issued in favour of the Registrar of the High Court was discharged by the Court.  The decree holder got a sum of Rs. 35,000/-, out of the amount of Rs. 90,000/-, which respondent no. 3 had deposited with the Bank by way of FDR, attached on the ground that the said amount belonged to the judgment debtor firm of which respondent no. 3 was a partner.  The High Court rejected the plea of the Bank that the aforesaid amount could not be attached, since the Bank had a lien on the FDRs against dues in an overdraft account.  It was contended on behalf of the Bank that it had a lien over the amount deposited by the judgment debtor and as banker they had a right to hold the security, in respect of overdraft amount.  Accepting the contention, the Hon’ble Supreme Court, inter-alia, held that the Bank has a general lien over all forms of securities or negotiable instruments, deposited by or on behalf of the customers in the ordinary course of banking business and such a general lien is a valuable right of the banker, judicially recognised, and in the absence of a contract to the contrary, the banker has a general lien over such security received from the 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 the customer’s debit balance.

          This issue also came up for consideration of the Karnataka High Court in Smt. K. S. Nagalambika vs. Corporation Bank & Anr., AIR 2000 Kant 201.  In the aforesaid case, the plaintiff had deposited money with the bank and obtained fixed deposits receipts in their name.  On maturity, the said deposits were not paid by the Bank on the ground that the plaintiff was a surety for a loan taken by his wife and the amount of the FDR was accordingly adjusted by the Bank towards the loan account of the wife.  Claiming the adjustment to be illegal, a suit was filed for recovery of the adjusted amount alongwith interest.  The Bank contended that it had general lien and therefore, was entitled to adjust the amount towards the loan account.  Relying upon the decision of the Hon’ble Apex Court in Vijay Kumar & Ors. (supra), it was held that undoubtedly the Bank had a lien over the FDRs.

8.      For the reasons stated hereinabove, I hold that respondent bank was entitled to retain the gold pledged by the complainant as a security, till the other borrowers for whom the petitioner had stood as a guarantor had paid their loans to the bank.  The respondent bank therefore, was not under an obligation to accept the amount outstanding in the gold loan account and release the gold pledged by the petitioner / complainant, till all its outstandings in the account in which the petitioner had stood as a guarantor were liquidated.  The view taken by the State Commission therefore, does not call for any interference by this Commission.  The revision petition is accordingly dismissed with no order as to costs.