JUSTICE DEEPA SHARMA (ORAL) THROUGH VIDEO CONFERENCING

The present Revision Petition, under Section 58 (1) (b) of the Consumer Protection Act, 2019 (for short “the Act”) has been filed by the Petitioner (hereinafter called “the Bank”) against the dated 16.08.2019 of the State Consumer Disputes Redressal Commission, Vijaywada, Andhra Pradesh (for short “the State Commission”) in Appeal No.536 of 2016.  The said Appeal filed against the order dated 30.09.2016 of the District Consumer Disputes Redressal Forum-I, Visakhapatnam (for short “the District Forum”) in Complaint No.45 of 2016 was dismissed.

         2.        The impugned order has been challenged before me on the ground that the findings of the Foras below are perverse as the Foras below have ignored the fact that the Bank had a right of lien on all the properties lying with it of the debtor against any loan amount due towards the borrower, irrespective of the fact that whether the property had been pledged or not.  It is submitted that the Foras below have wrongly interpreted Section 171 of the Contract Act and ignored Clause 14 of the Hypothecation Letter signed by the borrower/Petitioner when the loan was sanctioned. 

         3.        This Commission has a very limited revisional jurisdiction.  It is not required to re-assess and re-appreciate the evidences on record and substitute with its own conclusion on facts, especially when the findings on facts are concurrent.  This Commission can interfere with the concurrent findings of the Foras below only when there is perversity in the order or where there is a wrong exercise of jurisdiction.  A finding can be said to be perverse finding when it is based on no evidences where the material piece of evidence on record has not been considered.    It has been so held by the Hon’ble Supreme Court in “Rubi (Chandra) Dutta Vs. United India Insurance Co. Ltd. – (2011) 11 SCC 269” has held as under:

“23. Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked.  In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two Fora”.

 4.     Again in “Lourdes Society Snehanjali Girls Hostel and Ors. Vs. H&R Johnson (India) Ltd. and others, (2016) 8 Supreme Court Cases 286,” the Hon’ble Supreme Court has reiterated the same principle and has held as under:

  “17.  The National Commission has to exercise the jurisdiction vested in it only if the State Commission or the District Forum has either failed to exercise their jurisdiction or exercised when the same was not vested in them or exceeded their jurisdiction by acting illegally or with material irregularity.  In the instant case, the National Commission has certainly exceeded its jurisdiction by setting aside the concurrent finding of fact recorded in the order passed by the State Commission which is based upon valid and cogent reasons.”   

5.      In T. Ramalingeswara Rao  (Dead) Through L.Rs. and Ors. Vs. N.Madhava Rao and Ors. decided on 05.04.2019passed in Civil Appeal No. 3408 of 2019, the Hon’ble Supreme Court has held as under:

“12.     When the two Courts below have recorded concurrent  findings of fact against the Plaintiffs, which are based on appreciation of facts and evidence, in our view, such findings being concurrent in nature are binding on the High court. It is only when such findings are found to be against any provision of law or against the pleading or evidence or are found to be perverse, a case for interference may call for by the High Court in its second appellate jurisdiction.”

         6.        The brief facts of the case are that the Complainant had a bank account with the Petitioner in which he had deposited a sum of ₹50,000/- on 20.12.2014 under Kalpataravu Deposit scheme for a period of six months and against which receipts were issued to him and an interest @ 8.5% p.a. was payable to the Complainant at the time of the maturity.  The deposit period was extended for a further period of six months.  When on 20.12.2015, the Complainant asked the Bank to remit the maturity amount into his saving bank account, he was directed vide a letter No.0633/21/146 first to clear the loan amount taken from R.K. Mission Branch, Visakhapatnam.  The Complainant submitted a representation stating that the said loan had already been discharged and requested that his money lying deposited under the scheme should be remitted into his account.  When his request was not acceded to by the Bank, he filed the Complaint before the District Forum.

         7.        In the written statement, the contention of the Complainant that he had deposited a sum of ₹50,000/- in the scheme had been accepted.  The stand taken by the Bank was that the Bank had a right of lien over the amount deposited by the Complainant since some loan amount still remains unpaid.

         8.         Before the District Forum, both the parties had led their evidences and the District Forum dealt with all the contentions raised by the parties and gave its findings as under:

“5.       Now the point for determination is:

Whether there is any deficiency of service on the part of the Opposite parties; if so whether the Complainant is entitled for the reliefs sought for. 

6.         Ex.A1 dt.20.1.2014 is the copy of the FDR for an amount of Rs.50,000/- and the maturity value as on 20.12.2015 was mentioned as Rs.54,255/- is not in dispute. After maturity the Complainant handed over the FDRs to the 3^rd Opposite Party to receive the maturity amount but on 21.12.2015 the 3^rd Opposite Party issued a letter i.e. Ex.A2 to the Complainant that they did not 4 CC 45/2016 DCF-I, Vsp repay the amount on the ground that the Complainant had not repay the loan amount given vide loan a/c No.104730026000668. Then the Complainant make a representation to 3rd Opposite Party on 27.12.2015 i.e. Ex.A3 stating that there was no lien on the said amount. Hence without any lien the bank has no right to stop payment of Fixed Deposit. Ex.A4 is the letter issued by Andhra Bank, Waltair Branch to the Complainant on 7.1.2016 which reveals the Complainant obtained loan under PMRY scheme on 10.10.2000 for an amount of Rs.95,000/- from Andhra Bank, RK Mission Branch, and “bank is at liberty to recover the loan amount from any source of movable and immovable properties belongs to you for the time being held by you on our behalf”. Ex.A5 is the registered legal notice issued by the Opposite Party counsel to the Complainant regarding the repayment of loan amount which was due by the Complainant on 1.9.2008. Ex.A6 is the reply notice issued by the Complainant through his counsel, to the counsel of the Opposite Party that his client never availed business loan from their client’s bank, but the bank sanctioned loan under PMRY scheme and the same was cleared long back.

7.              On the other hand the Opposite Party took a plea that as per Ex.B1 the Complainant obtained loan from RK Mission branch, Andhra Bank but he failed to repay the loan outstanding and as per the right of banker’s lien has been conferred under Sec.171 of Indian Contract Act. The Opposite Party relied upon several decisions, wherein held that 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 and the Banker has a right of lien, if the securities have come to his hands in his capacity as Banker in the course of Banking business. Hence the Complainant owed an amount of Rs.1,19,992.06 ps as on 31.3.2016 along with subsequent interest as per RBI guidelines of the bank and refusing to pay the same with interest and on the other way demanding the payment of his deposit amount which is highly illegal and not in accordance with the accepted principles of law. The bank is dealing with public money in lending as well as holds legal responsibility to recover money from the borrower. The Opposite Party filed loan statement of Y.Polireddy (Complainant) from Andhra Bank, R.K.Mission branch and the loan account statement shows from 2002 to 2016 that was marked as Ex.B1. 

8.              The Complainant relied upon decision of High Court of Bombay, wherein held that there is express contract to the contrary, bank cannot keep lien on term deposits of its customers. Moreover, when a person or persons deposit/invest an amount in the term deposit in the bank, the position of the 5 CC 45/2016 DCF-I, Vsp customer is that of a creditor while the bank is a debtor. Hence the bank being the debtor, in respect of the money in fixed deposit, had no right to pass into service the doctrine of bankers lien and the money in fixed deposit. Whereas the Opposite Party relied upon decision of Supreme Court of India in Syndicate Bank Vs Vijay Kumar and others, dt.5.3.1992, wherein liberally explained about the banker’s lien. In this case the facts are, the depositor executed on the bank’s manual printed forms and as per the recital in the said letters he agreed that the deposits and renewals shall remain with the Bank so long as any account is due to the Bank from them. But in this present case, there is no letter obtained by the Complainant by OP-Bank regarding his previous loan amount. Moreover, there is no express contract between bank and the complainant with regard to the banker’s lien and there is no mention about the loan account details in the FD receipts. It is also to be noted that the Complainant obtained loan in the year 2000 but he deposited Rs.50,000/- in the year 2014 December, if the complainant is a default for his loan amount, the bank has to take necessary action for collection of loan amount but no documents filed by the Opposite Party with regard to the actions taken by them towards collection of loan amount from the Complainant and not even issued demand notice by Opposite Party until 2008. When the Complainant approached for his maturity amount, then the Opposite Parties woke up and withhold the maturity amounts, which is not justified. 

9.              As per Ex.A5, the Opposite Party issued a registered legal notice in the year 2008 i.e. after 8 years of the loan taken by the Complainant, for that notice the Complainant issued a reply notice stating that the loan was already cleared long back. For that notice there was no action taken by the Opposite Party and if the loan is not cleared then the bank has to take necessary steps to recover of that loan, but which action taken by the bank was not substantiated by them by filing necessary documents before the Forum. Hence why Opposite Parties are kept silent approximately 7 years from the date of demand notice issued by the Opposite party’s counsel and nearly 15 years from the date of obtaining loan by the Complainant from them. Hence after perusal of the documents it is clear that the complainant has not given any consent letter authorising the bank to retain or forfeit the maturity amount in discharging of any fraudulent debts. As such the Opposite Parties cannot create any lien without any express or implied contract between the complainant and the banker.

10.            At the time of arguments the Opposite Party counsel argued that as per the provisions of the Act and the clause in the loan application, there is a clause regarding the banker’s lien. But not filed any authenticated document by them to know by the Forum regarding the banker’s lien clause. The Opposite Party relied upon only Ex.B1 which was signed by Chief Manager of Andhra Bank, Waltair Branch but not filed his Affidavit in evidence. Moreover, as per the versions of the Opposite Party, the Complainant obtained loan from R.K.Mission Branch, Andhra Bank, whereas the Statements signed by Chief Manager, Waltair Branch. Thus they failed to establish their case as such the Opposite Parties are liable to pay the matured amount of Rs.54,255/- with 9% interest p.a. from the date of maturity i.e. 20.12.2015 to the Complainant which would be just and proper. The Complainant deposited that amount for the purpose to meet his personal needs but because of the acts of the Opposite Party, that too unless there is express of contract to the contrary bank withholding the amount, even though by giving notice to the complainant was unilaterally and moreover with a fond hope and for their future plannings Customers approach the banks and invest the amount by way of Fixed Deposits but because of the acts of the bank’s the Complainant deprived of having his investment in time which causes him mental agony and financial hardship. Hence to compensate it by allowing Rs.10,000/- towards compensation which would be just and proper. Accordingly this point is answered.

11.            In the result the Complaint is allowed in part directing the Opposite Parties to pay the maturity amount of Rs.54,255/- (Rupees Fifty four thousand two hundred and fifty five) with 9% interest p.a. from the date of maturity i.e. 20.12.2015 till realisation to the Complainant within two months, failing which to pay the same with 12% interest p.a. The Opposite Parties are further directed to pay Rs.10,000/- (Rupees Ten thousand) towards compensation besides costs of Rs.2,500/- (Rupees Two thousand five hundred).

9.      This order of the District Forum was challenged by the Petitioner before the State Commission in the Appeal and the same contention that the Petitioner had the lien over the said FD had been raised and that they were justified in not releasing the said amount in the said account.  The State Commission heard the arguments of the learned Counsel for the parties and re-appreciated and re-assessed the evidences before it and dealt with all the aspects and contentions raised before it.  The State Commission has held as under:

“12 It is an admitted fact that the complainant deposited an amount of ₹50,000/- with the 3rd opposite party bank under the scheme Kalpa Taruvu Deposit Scheme for a period of 6 months. Ex.A-1 is the photostat copy of deposit receipt. The complainant renewed the Fixed Deposit for further period of 6 months. The Fixed Deposit was matured on 20-12-2015. On 21-12-2015, the complainant approached the 3 opposite party bank and requested to pay the maturity amount The 3N opposite party issued a letter Ex.A-2 directing the complainant to clear the loan account No. 1047 300 26000668 in view of the instructions received from RK. Mission Branch On 27-12-2015, the complainant issued a letter Ex A-3 to the 3 opposite party directing it to release the Fixed Deposit amount failing which, he will initiate appropriate legal proceedings. On 07-01-2016, the 3rd opposite party issued a reply Ex: 4 to the complainant. There is no much dispute with regard to the deposit of an amount of ₹50,000/- by the complainant with the 3d opposite party bank.

13. It is the case of the opposite parties that the complainant had availed the credit loan facility of ₹95,000/- from Andhra Bank, R.K. Mission Branch, Visakhapatnam in the year 2000 and failed to repay the same. On 01-09-2008, the R.K. Mission Branch got issued a legal notice Ex A-6 directing the complainant to clear the amount due under loan Account No.BE/2000/2 within one week from the date of receipt of notice. The complainant got issued a reply Ex A-5 on 10-09-2008 to RK. Mission branch stating that he cleared the loan amount long back.  To substantiate the averments, the learned counsel for the complainant drawn the attention of this Commission to the decision of the Honourable Supreme Court, dated 20-04-1992 in Crl. Appeal No.254 of 1992 in Punjab National Bank and others Versus Surendra Prasad Sinha, wherein it was held that the bank while exercising the right of lien, is entitled to encash the Fixed Deposit Receipts deposited by the principal borrower as a security for clearance of the loan amount and such an act would not amount to criminal breach of trust as defined under Section 405 IPC.

In Bank of Baroda Versus D. Radhakrishnu Reddy, 2007 (6) ALD 824 wherein it was held that:

“..From the aforesaid decisions it is amply clear that though the remedy to recover the debt from the principal debtor is barred by limitation, the liability still subsists and the bank is entitled to appropriate the debt due from the amounts which are in its possession either belonging to the principal debtor or the surety, as it is settled law that the liability of the surety is co-extensive with that of the principal debtor. 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 to the banker judiciously recognized and in the absence of agreement to contrary by virtue of statutory provision under Section 171 of the contract act the banker has a general lien over such securities and amounts in its possession. He has the right to use the proceeds towards adjustment of the debt due to him from the customer. Such a lien is also applicable to negotiable instruments including fars of the customer which are lying with the bank Merely because the said fixed deposit was created subsequent to the loan transaction it would not make any difference. The bank has a right to adjust all the amounts which are in their possession and which belong to the customer on the date they adjust the said amount irrespective of the date on which the transaction which gave raise to the said claim took place....

Let us consider the facts of the case on hand in the light of the principle enunciated in the cases cited supra Even as per the version of the opposite parties, the complainant availed the credit loan facility from R.K. Mission branch, Visakhapatnam in the year 2000. For die reason or other, the said brunch has not taken steps for recovery of the alleged due amount from the complainant On 01-09-2008, the R.K. Mission brunch, Andhra Bank. Visakhapatnam issued a legal notice Ex A-6 directing the complainant to clear the loan account No. BE/2000/2 within one week. The complainant issued a reply Ex A-5 stating that he cleared the loan account long back. For one renson or other, the R.K. Mission branch has not taken any steps against the complainant for recovery of the alleged due amount vide loan account No. BE/2000/2 from 2008 till 2015 The alleged loan account is hopelessly barred by limitation

14. To substantiate their stand, the opposite parties filed Ex.B-1 statement of account in respect of loan account No.000012932146.  The statement of account is shown up to 26-11-2007. The R.K. Mission branch shown unapplied interest up to 31-03-2016.  The rights and liabilities of the parties springs from the terms and conditions of loan agreement. For the reasons best known, the opposite parties did not choose to produce the loan agreement alleged to have been executed by the complainant in favour of the R.K. Mission branch. In the absence of loan agreement, it may not be possible to determine the rights and liabilities of the parties. It is not the case of the opposite parties that the complainant handed over the Fixed Deposit Receipt as a security to the alleged credit loan availed by him from R.K. Mission branch.  As per the principle enunciated in the cases cited supra, the bank has general lien over the Fixed Deposit Receipts kept by the principal borrower or surety as security for discharge of loan. The facts of the case on hand are not similar to the facts of the cases cited supra. Therefore, those two decisions are no way helpful to the opposite par les to substantiate its stand.

15. The learned counsel for the opposite parties (appellants) listed that the complaint is not maintainable in view of non-implementing the RK Mission branch, Andhra Bank, Visakhapatnam. As observed earlier, the R.K. Mission branch issued a notice BA way back in the year 2008. The R.K. Mission branch has not taken any steps for recovery of the alleged loan amount from the complainant.  On the other hand, the complainant issued Ex.A-5 reply specifically denying the liability. In such circumstances, a duty cast on the opposite parties to produce the loan agreement, hypothecation agreement and other relevant documents in support of their stand.  For the reasons best known, the opposite parties did not take any steps in this direction. The opposite parties also have not taken any steps to implead the R.K. Mission branch. When the R.K. Mission branch itself is not interested to recover legally unenforceable debt amount from the complainant, how the opposite parties are entitled to retain the Fixed Deposit without any justification. There is no justification on the part of the opposite parties to retain the Fed Deposit amount of the complainant. The complainant is the competent person to implead or non-implead of any particular person If any other person has interest or semblance of interest in the subject matter of the complaint, be is entitled to come on record by following the due procedure. Simply because the complaint has not impleaded the RK. Mission branch, that Itself is not a legally valid ground to dismiss the complaint, in limini.  In the light of the foregoing discussions, we are unable to accede to the contention of the learned counsel for the opposite parties that the complaint is not maintainable for nor Impleading the R.K. Mission brunch

16. The 3rd opposite party without any justifiable ground, retained the Fixed Deposit amount of the complainant. Non-payment of the Fixed Deposit amount to the complainant on the date of maturity certainly amount to deficiency in service. The material placed on record clinchingly establishes the deficiency in service on the part of the opposite parties. Had the 3^rd opposite party paid the maturity amount as on 20-12-2015, the complainant might have utilised the same in a proper way. Taking into consideration the facts and circumstances of the case, the District Forum rightly granted interest at the rate of 12% p.a. from 20-12-2015 till the date of realization. The findings recorded by the District Forum are supported by documentary evidence produced by both parties. The District Forum has assigned cogent and valid reasons to its findings. We are fully endorsing with the findings recorded by the District Forum. There is no illegality or irregularity in the impugned order which warrants interference of this Commission. Viewed from any angle, the appeal is liable to be dismissed.”

10.    This order is impugned before me on the same contention that the Bank has a right of lien over the said FD against a loan amount which remained unpaid.  Learned Counsel has relied on Clause 14 of the Hypothecation Agreement executed by the Complainant at the time of taking the loan from the Bank.  Clause 14 of the said letter reads as under:

“14.            Nothing here in shall prejudice or affect any lien security or claim to which the bank shall by law or otherwise be entitled or shall operate to prejudice the Bank’s rights or remedies in respect of any present or future security guarantee obligation or decree for any indebtedness or liability of the Borrower to the Bank.”

11.    This clause 14 is the part of the document which was executed in the year 2000 at the time when some loan was taken by the Complainant hypothecating all his machinery with the Bank against the said loan by executing this document.  The alleged FD was created by the Complainant in the year 2014, i.e. 14 years after the alleged loan.  Learned Counsel submits that the said clause binds any further security as well.  No doubt, this clause reads about the future security but it is a fact that the Complainant had not hypothecated the disputed FD with the Bank against the said loan at any time therefore FD was never pledged as security.  Also, the stand of the Complainant is that the said loan was cleared by him long back and the Bank has not produced any evidence before the Foras below to prove that any amount was due from the Complainant.  Moreover, if the loan amount remained due, the Bank had legal remedies available to it for recovery of the said loan amount since a lien of all the machineries of the Complainant had been created against the said loan.  It is not shown by the Bank that it took any legal steps towards the recovery of the  said unpaid loan and any amount towards loan remained unpaid even after redemption of securities against loan.     

12.    Learned Counsel for the Petitioner has also relied on Section 171 of the Contract Act and argues that by virtue of this Section ubridled right has been given to the Bank to create lien on all the properties of customer who had opened any bank account or any FD with them.  He has relied on “Syndicate Bank vs. Vijay Kumar & Ors., AIR, 1992 State Commission 1066”, “Branch Manager, Union Bank of India & Ors. vs. Tele Surya Rao, II, 1997 CPJ 67 NC” “M. Mallika vs. State Bank of India & Anr., IV 2006 CPJ 1 NC” and “Charanjeet Kaur vs. State Bank of Patiala, I 2015 CPJ 8 NC”.

13.    The findings in this case do not help the Petitioner at all because the findings on Section 171 have been given in those

cases in the light of the facts of those cases.  Before me, the facts are entirely different.  No lien against the FD in dispute had been created at any time by the Bank.  When the FD was issued to the Complainant, I wonder what had stopped the Petitioner to pledge this FD against the unpaid loan amount as the FD was created after 14 years of sanctioned loan.  It is also not shown if any notice had ever been issued before the FD was opened in the year 2014 or subsequently to the Complainant for clearing the loan amount.  Section 171 does not give an unbridled right to the Banks to withhold the property of a customer.  All the expressions used in this Section have to be read as a ejusdem generis  The expression used are merely security etc. and therefore, unless a lien has been created, it cannot be said that the Petitioner is justified in the facts and circumstances of this case to withhold the money of the Complainant which he put in trust in the form of FD with the Petitioner.  The facts in this case clearly show that the Foras below are justified in holding that the Petitioner is guilty of deficiency in service.  I found no illegality, infirmity or perversity in the impugned order.  The Revision Petition has no merit and the same is dismissed in limine.

14.    Copy of this order be sent to the Foras below as well as to the Complainant.