Joseph Antony v. The South Indian Bank Ltd.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN FRIDAY, THE 24[TH] DAY OF NOVEMBER 2023 / 3RD AGRAHAYANA, 1945** **OP(C) NO. 2205 OF 2023 AGAINST C.M.A.NO.16/2023 IN OS 246/2023 OF MUNSIFF** **COURT,KATTAPPANA** ## **PETITIONER/APPELLANT/PETITIONER/PLAINTIFF:** JOSEPH ANTONY, AGED 68 YEARS S/O. ANTONY RESIDING AT NELLIYEKKUNNEL HOUSE, NEDUMKANDOM P.O., KALKOONTHAL VILLAGE, UDUMBANCHOLA TALUK, IDUKKI -, PIN - 685554 BY ADV GEORGE SEBASTIAN ## **RESPONDENT/RESPONDENT/RESPONDENT/DEFENDANT:** THE SOUTH INDIAN BANK LTD., REGISTERED OFFICE AT TRISSUR AND BRANCH CENTER POINT, NEDUMKANDOM KARA, KALKOONTHAL VILLAGE, UDUMBANCHOLA TALUK, IDUKKI ,REP.BY ITS MANAGER., PIN - 685554 BY ADVS. K.MADHUSOODANAN MATHEW JACOB (KUNNATHU)(K/398/2013) SYRIAC JOSEPH(K/304/1980) THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON 24.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **O.P.(C).No. 2205 of 2023** **==> picture [37 x 9] intentionally omitted <==** ## **J U D G M E N T** _**Dated this the 24[th] day of November, 2023**_ **This Original Petition is carried from Ext.P6 judgment in C.M.A.No.16/2023 of the Sub Court, Kattappana, which confirms Ext.P4 order of the learned Munsiff, Kattappana, in I.A.No.1/2023 in O.S.No.246/2023, which was one for injunction. The petitioner herein is the plaintiff and the applicant in the injunction petition. The suit was filed** _**inter alia**_ **for permanent prohibitory injunction restraining the respondent-Bank from selling the gold ornaments, which were pledged in connection with two gold loans. The definite case of the petitioner/plaintiff was that, the gold loans were discharged by repayment the loan amounts advanced, wherefore, petitioner/plaintiff is entitled to get the gold ornaments returned. The existence of another Kissan Credit Loan, for** **O.P.(C).No. 2205 of 2023** **==> picture [37 x 9] intentionally omitted <==** **which another property was offered as security, is no reason to withhold the gold ornaments pledged. The plaintiff moved an interlocutory application for an interim injunction restraining the defendant from selling the gold ornaments** _**pendente lite**_ **. The learned Munsiff dismissed the said application vide Ext.P4 order, against which an appeal was preferred. The same was also dismissed vide Ext.P6 order. Both the Courts essentially relied upon the judgment of the learned Single Judge of this Court in Nakulan vs. Deputy General Manager, Canara Bank [2014 (1) KHC 51].** **2. Heard the learned counsel for the petitioner and the respondent.** **3. The learned counsel for the petitioner relied upon a judgment of the Hon'ble Supreme Court in Board of Trustees of the Port of Bombay and Others vs. Sriyanesh Knitters [1999 KHC 1332] and invited the attention of this Court to paragraph no.16 of** ## **O.P.(C).No. 2205 of 2023** **==> picture [37 x 9] intentionally omitted <==** **the said judgment, to contend that the general lien under Section 171 of the Contract Act, would only enable the Bank to retain the goods as security, which power would not enable the Banker to sell the goods, except after taking recourse to legal proceedings for recovery of the dues.** **4. Per contra, learned counsel for the respondent relied upon the judgment in Nakulan (supra), besides inviting the attention of this Court to Exts.RB & RC, which are documents evidencing the conditions upon which the gold loan was given to the petitioner/plaintiff. Specific attention was invited to clause no.7, which is extracted herebelow.** **7. If the pawner has other dues to the bank as principal debtor, co-obligant, guarantor or in any other capacity by way of loans, overdrafts or other debts in any manner, unless and until such debts, or any other debts that may arise in future are fully repaid by the pawner, the jewels pledged under this loan will be taken as security for all such debt or debts and will be retained by the bank as security and will be dealt with in regard to sale etc. as a pledged commodity.** **O.P.(C).No. 2205 of 2023** **==> picture [37 x 9] intentionally omitted <==** **5. Thus, according to the learned counsel, the Bank has every power to deal with the gold ornaments for the purpose of sale, treating it as a pledged commodity, wherefore, no proceedings need be initiated for the sale of the gold ornaments.** **6. Having heard the learned counsel appearing on both sides, this Court cannot endorse the submissions made by the learned counsel for the respondent-Bank. The hon'ble Supreme Court in Board of Trustees(supra), categorically held that Section 171 only enables to retain the goods, the sale of which will be subject to initiation of legal proceedings for recovery of the dues. Paragraph no.16 of the said judgment is extracted here below.** **16. There is another aspect which is relevant. S. 171 of the Contract Act only enables the retention of goods as security.** **O.P.(C).No. 2205 of 2023** ..6.. **On the other hand in respect of current dues in respect of existing goods in their possession the Board not only has a lien under S.59 of the MPT Act but also has the power to sell the said goods and realise its dues by virtue of S.61 of the MPT Act. The procedure for exercising this power of sale of the goods in respect of which the Board has a lien is contained in the said section. Before selling the goods no order of any court or other judicial authority is required. On the other hand the general lien contemplated by S. 171 of the Contract Act only enables the retention of the bailed goods as a security. Th eir retention does not give any power to sell the goods, unlike the power c contained in S.61 of the MPT Act. If payment is not made by the consignee to the wharfinger, in a case where S. 171 of the Contract Act applies, the wharfinger can only retain the goods bailed as security and will have to take recourse to other proceedings in accordance with law for securing an order which would then enable the goods to be sold for realisation of the amounts due to it. It may in this connection, be necessary c for the wharfinger to file a suit for the recovery of the amount due to it and S.131 of the MPT Act clearly provides that such a remedy of filing a suit is available to the Board. The added advantage of sale given by S.61 of the MPT Act in respect of current dues cannot be regarded as whittling down the right of a general lien contained in S. 171 of the Contract Act in respect of old dues. (underlined by me for emphasis)** ## **7. This judgment was sought to be distinguished** **by the learned counsel for the respondent by pointing out that, the same was rendered on the question of lien by a wharfinger over future** **O.P.(C).No. 2205 of 2023** **==> picture [37 x 9] intentionally omitted <==** **goods. It is true that, on facts there exists such a distinction. However, on the impact and the interpretation of Section 171 of the Contract Act, no distinction on the legal position can be drawn as regards the proposition held by the Hon'ble Supreme Court, based on the distinct facts dealt with therein. This Court is also not in a position to take stock of Nakulan (supra), in view of the authoritative pronouncement made by the Hon'ble Supreme Court in Board of Trustees (supra).** **8. Coming to clause 7 in Exts.RB & RC, the whole clause is only in harmony with Section 171 of the Contract Act, except the last portion which speaks of the right of the Bank for sale of the gold ornaments, treating it as a pledged commodity. In the light of the interpretation given by the Hon'ble Supreme Court to Section 171 in Board of Trustees (supra), the validity, enforceability and also the binding nature of this clause, is a** **O.P.(C).No. 2205 of 2023** **==> picture [37 x 9] intentionally omitted <==** **matter to be decided in the suit, based upon which the interim injunction sought for cannot be refused. This Court also finds that the interim injunction sought for is necessary for preserving the subject matter of the** _**lis**_ **.** **9. In the afore-referred circumstances, and especially in view of the authoritative pronouncement of the hon'ble Supreme Court in Board of Trustees (supra), the orders impugned in this Original Petition cannot be sustained. The same are set aside. The respondent-Bank will be restrained by an order of injunction from selling the plaint schedule ornaments, which were pledged in connection with gold loans availed by the petitioner/plaintiff, until disposal of the suit. This Court clarifies that, it has not expressed any opinion on the merits of the matter and the learned Munsiff will decide the suit untrammeled by any of the observations made in this judgment, which is squarely limited for the purpose of the** **O.P.(C).No. 2205 of 2023** **==> picture [37 x 9] intentionally omitted <==** **interim order. Inasmuch as, the recovery of dues to the Bank by way of sale of the gold ornaments remains injuncted, the learned Munsiff will make every endeavour to dispose of the suit, as expeditiously as possible. Needless to say that the respondent-Bank certainly has a right to retain the gold ornaments, by virtue of Section 171 of the Contract Act, as interpreted by the Hon'ble Supreme Court in Board of Trustees (supra).** Sd/- **C. JAYACHANDRAN JUDGE** **TR** **O.P.(C).No. 2205 of 2023** ..10.. ## **APPENDIX OF OP(C) 2205/2023** PETITIONER EXHIBITS Exhibit P1 Exhibit P2 A TRUE COPY OF THE PLAINT IN OS 246/2023 OF THE MUNSIFF COURT, KATTPAANA DATED 19.06.2023 A TRUE COPY OF THE INTERLOCUTORY APPLICATION (IA 1/2023 IN OS 246/2023 ) DATED 19.06.2023 Exhibit P3 A TRUE COPY OF THE COUNTER AFFIDAVIT DATED 04.07.2023 IN IA 1/2023 IN OS 246/2023 OF THE MUNSIFF COURT KATTAPPANA - Exhibit P4 A TRUE COPY OF THE ORDER DATED 14.08.2023 IN IA 1/2023 IN OS 246/2023 OF THE MNSIFF COURT, KATTAPPANA - Exhibit P5 A TRUE COPY OF THE APPEAL MEMORANDUM DATED 22.08.2023 IN CMA 16/2023 OF MUNSIFF COURT, KATTAPPANA Exhibit P6 - A TRUE COPY OF THE ORDER DATED 30.09.2023 IN CMA 16/2023 OF THE SUB COURT KATTAPPANA RESPONDENT EXHIBITS Exhibit RA Copy of the decision reported in 2014 (1) KLT 125 Exhibit RB True copy of the Pledge card dated 28/07/2017 Exhibit RC True copy of the Pledge card dated 30/05/2017