DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PALAKKAD

Dated this the 17^th day of June 2011

Present : Smt.Seena.H. President

: Smt. Preetha G Nair, Member

: Smt.Bhanumathi.A.K. Member Date of filing: 27/01/2011

(C.C.No.15/2011)

1. Shajina

D/o.Late Nawabjan.S

Vakkavil House,

Kanimangalam, Nenmara,

Chittur Taluk, Palakkad.

2. Shabana,

D/o.Late Nawabjan.S.

Vakkavil House,

Kanimangalam, Nenmara,

Chittur Taluk, Palakkad.

3. Nishana

D/o.Late Nawabjan.S

Vakkavil House,

Kanimangalam, Nenmara,

Chittur Taluk, Palakkad.

4. Nawafjan,

S/o.Late Nawabjan.S

Vakkavil House,

Kanimangalam, Nenmara,

Chittur Taluk, Palakkad. - Complainants

(By Adv.S.Ramesh)

V/s

1. Canara Bank,

Nenmara Branch,

Palakkad

(Rep.by its Br.Manager)

2. The Branch Manager,

Canara Bank,

Nenmara Branch,

Palakkad - Opposite parties

(By Adv.A.Gourisankar)

O R D E R

By Smt.SEENA.H. PRESIDENT

Complaint in brief.

Complainants are the legal heirs of late Nawabjan.S who has availed a loan for agricultural purpose from opposite party bank on 23/4/05 by pledging gold ornaments. The pawnor has expired on 25/8/08. In the year 2008 itself the said gold loan was waived by the opposite party bank under the Central Govt. Debt Waiver Scheme. Complainants applied for release of the gold ornaments, but opposite party refused stating that the security has to be adjusted to another loan taken by Nawabjan. According to the complainant, the action of the bank in adjusting the gold ornaments for another separate independent transaction is clear deficiency in service and misappropriation on the part of the opposite party. Hence the complaint. Complainant prays for release of the gold ornaments alongwith compensation of Rs.10,000/-.

Opposite party resisted the complaint with the following contentions.

Complainants’ father has availed two loans from the opposite party bank. The 1^st loan Account No.9106 for a sum of Rs.20,000/- was availed on 15/12/2004. In that loan he did not repay outstanding dues of Rs.18,534/- Subsequently he has availed agricultural loan no.740/2005 by pledging 2½ sovereigns of gold ornaments. Subsequently Govt. has waived off the said agricultural debt. Opposite party bank retained the gold ornaments pledged in the gold loan account exercising general lien as a security for repayment of pending loan. According to opposite party, the bank is justified in retaining the gold ornaments as there is specific contract between the borrower and the bank to retain the pledged ornaments as security for repayment of all or any amount that may be outstanding at any time. Further contention raised is that the Forum lacks jurisdiction to entertain the complaint. Complainant ought to have approached the banking Ombudsman for redressal of the complaint. Further complainant is not a consumer as defined under Section 2(1)(d) of the Consumer Protection Act and hence complaint is liable to be dismissed.

The evidence adduced by both parties consists of their respective proof affidavits. Ext.A1 to A3 marked on the side of the complainant and Ext.B1 to Ext.B7 marked on the side of the opposite party.

The Issue that arises for our consideration are

1. whether there is any deficiency in service on the part of opposite parties ?

2. If so, what is the relief and cost complainant is entitled to ?

Issue NO.1 & 2

The facts of the case are more or less admitted by both parties. It is not in dispute that father of the complainants has availed two loans from the opposite party bank. It is also not in dispute that one of them has been waived off and the other is outstanding. On going through the facts of the case, we find that the limited question to be decided is whether the opposite party bank can exercise general lien over the security pledged in loan No.740/2005 for the dues in loan No.DPN 9106.

Heard both parties and has gone through the entire evidence on record.

The learned counsel for the complainant vehemently argued for the position that opposite party bank no right to exercise general lien over the security furnished in one loan for another one. Counsel relies on section 174 of the Indian Contract Act 1872 for establishing his case. Section 174 reads as follows:

Pawnee not to retain for debt or promise other than that for which goods pledged. Presumption in case of subsequent advances – The Pawnee shall not, in the absence of a contract to that effect, retain the goods pledged for any debt or promise other than the debt or promise for which they are pledged; but such contract, in the absence of anything to the contrary, shall be presumed in regard to subsequent advances made by the Pawnee.

The learned counsel for opposite party relies on section 171 of Indian Contract Act the provision which specifically deals with general lien of bankers, factors etc. Section 171 reads as follows:

General lien of bankers, factors, wharfingers, 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, 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.

On going through the provisions we are of the view that section 171 is the provision which specifically deals with the rights of the bankers. As per Section 171 in the absence of a contract to the contrary, banker can retain as security for a general balance of account, any goods bailed to them. It is for the complainant to prove whether there is any contract to the contrary. Here we find that complainant failed to prove the same. In Branch Manager, Canara Bank V/s P.Moovendran 1992(2) CPR 455 (SCDRC-Mad) Hon’ble State Commission also held that Bank is entitled to retain the jewels as lien under section 171 of the Indian Contract Act.

In view of the above discussions, we are of the view that complainant is entitled for the release of the gold ornaments only upon payment of the dues of the loan. Opposite party has acted legally and hence no deficiency in service can be fastened upon them.

In the result complaint dismissed.

Pronounced in the open court on the 17^th day of June 2011.

Sd/-

Seena.H

President

Sd/-

Preetha G Nair

Member

Sd/-

Bhanumathi A.K

Member

APPENDIX

Exhibits marked on the side of the complainant

Ext.A1 -Copy of Death Certificate of Late Sri.Nawabjan

Ext.A2 – Relationship certificate of Late Sri.Nawabjan issued by Village officer,

Nenmara dt.2/11/10

Ext.A3 – Letter dated 11/10/10 issued by Canara Bank, Nenmara

Exhibits marked on the side of the opposite parties

Ext.B1 -Photo Copy of Common loan application dt.15/12/04

Ext.B2 – Photo Copy of loan sanction letter dt.15/12/04

Ext.B3 – Photo Copy of Declaration dt/15/12/04

Ext.B4 - Photocopy of Agreement cum Deed of Hypothication dt.15/12/04

Ext.B5 – Photocopy of specimen signature card dt.15/12/04

Ext.B6 – Photocopy of gold loan account statement No.10201

(23/4/05 to 11/7/08)

Ext.B7 – Photocopy of gold loan account statement No.9106

(15/12/04 to 8/12/07)