P. Abdu v. State Bank of Travancore

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR** **TUESDAY, THE 23RD DAY OF AUGUST 2016/1ST BHADRA, 1938** **WP(C).No. 14091 of 2016 (J) ----------------------------** **PETITIONER :** **P.ABDU, AGED 51 YEARS,S/O.SAIDU HAJI, POOZHITHARA HOUSE,P.O.EDARICODE, KLARI SOUTH,TIRUR,MALAPPURAM.** **BY ADVS.SRI.BABU KARUKAPADATH SMT.AMRIN FATHIMA SRI.MITHUN BABY JOHN SRI.J.RAMKUMAR SRI.N.SATHEESH KUMAR(NEMMARA) SMT.M.A.VAHEEDA BABU SRI.P.U.VINOD KUMAR** **RESPONDENT:** **----------** **STATE BANK OF TRAVANCORE, EDARICODE BRANCH,MALAPPURAM DISTRICT, REPRESENTED BY ITS BRANCH MANAGER-676505.** **BY SRI.T.SETHUMADHAVAN SENIOR ADVOCATE BY ADV. SRI. JAYESH MOHAN KUMAR, SC,** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 4/8/2016, THE COURT ON 23-08-2016 DELIVERED THE FOLLOWING:** **bp** **WP(C).No. 14091 of 2016 (J) ----------------------------** ## **APPENDIX** |**PETITIONER(S)' EXHIBITS**|**PETITIONER(S)' EXHIBITS**| |---|---| |**-----------------------**|| |**P1:**|**A TRUE COPY OF THE TERM DEPOSIT ADVICE DATED**| ||**23/2/2013 WITH REGARD TO THE FIXED DEPOSIT OF AN**| ||**AMOUNT OF RS.50,000/-WITH THE RESPONDENT BANK**| |**P2:**|**A TRUE COPY OF THE TERM DEPOSIT ADVICE DATED**| ||**22/1/2013 WITH REGARD TO THE FIXED DEPOSIT OF AN**| ||**AMOUNT OF RS.50,000/-WITH THE RESPONDENT BANK**| |**P3:**|**A TRUE COPY OF O.S.415/2014,FILED BY THE RESPONDENT**| ||**BANK,WHICH IS PENDING BEFORE THE HON'BLE MUNSIFF**| ||**COURT,PARAPPANANGADI**| |**P4:**|**A TRUE COPY OF THE WRITTEN STATEMENT DATED 1/6/2015**| ||**FILED BY THE PETITIONER IN O.S.415/2014.**| |**RESPONDENT(S)' ANNEXURES**<br>**:**|| |**------------------------**|| |**ANNEXURE**|**R1(A): COPY OF THE HYPOTHECATION AGREEMENT FOR TERM**| ||**LOAN EXECUTED BY THE PEITINERON 25/6/2012.**| |**ANNEXURE**|**R1(A): COPY OF THE STATEMENT OF ACCOUNT IN RESPECT OF**| ||**LOAN ACCOUNT AVAILED BY PETITIONER.**| |**ANNEXURE**|**R1(B): COPY OF THE BRANCH ZERO BALANCE ACCOUNT.**| **//TRUE COPY//** **P.A. TO JUDGE** ## **bp** ## **P.B.SURESH KUMAR, J.** ## **= = = = = = = = = = = = = = WP(C).No.14091 of 2016-J.** ## **= = = = = = = = = = = = = =** Dated this the 23[rd] day of August, 2016. ## **J U D G M E N T** The petitioner has two Fixed Deposits in the respondent Bank ('the Bank' for short). Exts.P1 and P2 are the receipts of the said Fixed Deposits, of which Ext.P1 relates to the deposit of Rs.50,000/- made by the petitioner on 23.2.2013 and Ext.P2 relates to the deposit of Rs.50,000/- made by the petitioner on 22.1.2013. The maturity date of Ext.P1 deposit is 8.7.2014 and the maturity date of Ext.P2 deposit is 6.2.2013. Earlier, the petitioner had availed a loan from the Bank for purchase of a vehicle. It is conceded that the petitioner did not repay the instalments of the said loan and consequently the vehicle purchased was repossessed and sold by the Bank. Even after giving credit of the sale proceeds, a sum of Rs.2,24,060/was outstanding in the loan account and consequently the Bank **WP(C).No.14091/2016-J.** 2 instituted Ext.P3 suit against the petitioner for realisation of the said amount with interest and costs. Ext.P3 suit is still pending. The case of the petitioner is that though the fixed deposits have been matured, the Bank is not releasing the proceeds of the deposits to the petitioner on the ground that it has a lien over the same for realisation of the amounts claimed in Ext.P3 suit. According to the petitioner, money put in fixed deposit constitutes a debt in the hands of the banker and a debt cannot be the subject matter of a lien. The petitioner has also a case that the Bank had realised the entire outstanding in the vehicle loan account with the proceeds of the sale of the hypothecated vehicle and there is nothing left to be paid to the Bank in connection with the said transaction. The petitioner, therefore, seeks directions to the Bank to release the proceeds of Exts.P1 and P2 Fixed Deposits with interest. 2. The Bank has filed a statement in this matter contending that as per the terms of the agreement entered into by them with the petitioner while giving vehicle loan to the petitioner, they are entitled to exercise a lien over the Fixed 3 ## **WP(C).No.14091/2016-J.** Deposits of the petitioner also. The hypothecation agreement executed by the petitioner in favour of the Bank in connection with the vehicle loan has also been produced by the Bank as Ext.R1(a) along with the statement. 3. Heard the learned counsel for the petitioner as also the learned counsel for the Bank. 4. The Bank has disputed the case of the petitioner that it had realised the entire outstanding in the loan account with the proceeds of the sale of the hypothecated vehicle. According to them, even after crediting the sale proceeds of the vehicle in the loan account, a sum of Rs.2,24,060/- was outstanding in the loan account and it is in the said circumstances that Ext.P3 suit has been filed. The question as to the liability of the petitioner being a pure question of fact, according to me, the same is a question to be considered in Ext.P3 suit. 5. The short point remaining to be considered is whether the Bank has a lien over Exts.P1 and P2 Fixed Deposits. The learned counsel for the petitioner, relying on the decision of **WP(C).No.14091/2016-J.** 4 this Court in **Union Bank of India v. Venugopalan** (1990(1) KLT 262), contended that money lodged with banks as fixed deposits _stricto jure_ is a loan to the Bank and that therefore the banker in connection with the fixed deposit is a debtor. It is contended that the depositor in the circumstances cannot be treated as the owner of the money in fixed deposit. If the depositor cannot be treated as the owner of the fixed deposit, there cannot be a lien over the same as lien postulates property of the debtor in the possession or under the control of the creditor. Per contra, the learned counsel for the Bank contended, relying on Ext.R1(a) hypothecation agreement, that the petitioner has permitted the Bank to exercise a lien on all his assets which include the Fixed Deposits as well. Clause 9 of Ext.R1(a) agreement, which is relied on by the learned counsel for the Bank, reads thus: “Nothing herein shall prejudice the rights or remedies of the Bank in respect of any present or future security, guarantee, obligation or decree or order or certificate for any indebtedness or liability of the Borrower to the Bank or Bank's general lien on the assets of the Borrower.” The learned counsel for the Bank also relied on the decision of **WP(C).No.14091/2016-J.** 5 the Apex Court in **Syndicate Bank v. Vijay Kumar** (AIR 1992 SC 1066) in support of his contention that the Bank can exercise lien over the fixed deposits as well. 6. Lien, in its primary sense, is a right in one man to retain that which is in his possession belonging to another until certain demands of the person in possession are satisfied. In this primary sense, it is given by law and not by contract. As far as this case is concerned, the petitioner has permitted the Bank to exercise lien over his assets. His contention is only that lien cannot be exercised over Fixed Deposits. It is seen that in **Syndicate Bank v. Vijay Kumar** _(supra),_ the Apex Court has held that lien can be exercised by the banker against the Fixed Deposits as well. Paragraph 7 of the said judgment reads thus: “Applying these principles to the case before us we are of the view that undoubtedly the appellant-Bank has a lien over the two FDRs. In any event the two letters executed by the judgmentdebtor on 17-9-80 created a general lien in favour of the appellant-Bank over the two FDRs. Even otherwise having regard to the mercantile custom as judicially recognised 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. The recital in the two letters clearly creates a general lien without giving room whatsoever for any controversy.” **WP(C).No.14091/2016-J.** 6 In the light of the judgment of the Apex Court referred to above, there is no merit in the writ petition and the same is accordingly dismissed. _**Sd/-**_ **P.B.SURESH KUMAR, JUDGE.** _**Kvs/-**_ ## _**// true copy //**_