BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION ATHYDERABAD.
F.A.No.93/2008 against C.D.No.411/2007, District Forum, GUNTUR
Between:
Syndicate Bank, rep. by its
Sr.Branch Manager, Brindavan
Gardens, Guntur, Guntur District.
1. Smt.Minnekanti Uma Devi, W/o.late Raghava
2. Minnekanti Ravi Shankar, S/o.late Raghava Rao,
3. Mineekanti Siva Rama Krishna, S/o.late Raghava
All are R/o.Stambala Garuvu, Guntur.
Counsel for the Appellant:
Counsel for the Respondents: Mr.K.Ramakrishna Rao.
QUORUM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT SMT.M.SHREESHA,.
FRIDAY, THE TWENTY FIFTH DAY OF MARCH,
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Aggrieved by the order in CC No.411/2007 on the file of District Forum, Guntur,
The case of the complainants in brief is that the first complainant’s husband and father of complainants’ 2 and 3 availed gold loan st
Opposite party filed counter admitting that the complainant’s husband applied for a loan amount of Rs.17,000/- that he stood as guarantor to one M/s.Balaji Cotton Traders and M/s. Sudha Cotton Syndicate and both
Based on the evidence adduced i.e. Exs.A1 to A7 and B1 and the pleadings put forward, the District Forum allowed the complaint in part directing the opposite party to return the pledged gold ornaments to the wife of the deceased together with costs of Rs.1,000/-.
Aggrieved by the said order, the opposite party bank preferred this appeal.
It is the complainant’s case that M.Raghava Rao, who is the first complainant’s husband and second and third complainant’s father pledged gold ornaments in opposite party bank on 06-10-2004 and availed a gold loan.
The learned counsel for the appellant/opposite party also relied on Section 171 of Indian Contract Act 1872 which reads as follows:
171 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.
The brief point that falls for consideration is whether the banker has general right of lien to retain the gold ornaments pledged for a particular loan even after discharge after loan for recovery of another loan subsequently advanced.
The learned counsel for the respondents relied on
Contract Act (9 of 1872) S.171 General lien of Banker Is on security of principal debtor and not guarantor. Grant of principal debtor and not guarantor, Grant of gold loans to petitioner against pledge of gold ornaments, Petitioner had also stood as guarantor for Cash Credit Loan granted to another debtor.
A brief perusal of Ex.B1 which is the loan application executed between the bank and the borrower reads as follows:
As security for repayment of the outstanding balance of the loan which you may grant to me/us, I/we hereby pledge with you Gold ornaments/silver articles as mentioned in the schedule herein below.
In case of failure on my/our part to repay any of the loan instalments and/or quarterly interest on due dates, the bank is authorised to recall the entire dues and to dispose of the securities described in the schedule without any notice to me/us and, short-fall after adjustment of the net sale proceeds shall be repaid by me/us on demand by the bank. account with you or sent to me/us at our cost.
It is pertinent to note that there is an express and implied provision in this application stating that even after the discharge of the entire loan amount, if the borrower stood as guarantor for some other third parties, these amounts will be adjusted.
There shall be no order as to costs.
JM
