A bank cannot exercise a general lien over the documents of a property mortgaged as security for a loan for recovery of amounts other than the loan for which the lien was created.

JUDGMENT

1. The petitioner was earlier working in the 1st respondent-Bank in Srungavarapukota Branch, Punyagiri Road, S. Kota, Vizianagaram District. While working in the said Bank, the petitioner had obtained a bank loan of Rs.2,44,840.00 repayable in 20 years. Thereafter, the petitioner constructed a house in the year 1999 with the said loan amount and was paying the instalments to the bank regularly. As security for the loan amount, the petitioner deposited the documents of that house with the 3rd respondent bank.

2. The respondents, on the ground that the petitioner had indulged in misappropriation, had initiated a criminal prosecution as well as disciplinary proceedings against the petitioner. The criminal case which was taken up as C.C.No.357 of 2005, in the Court of the Judicial Magistrate of First Class, S.Kota, ended in an acquittal. An appeal bearing Criminal Appeal No.58 of 2015 was filed in the Court of Principal District Judge, Vizianagaram, against which the petitioner has filed a Revision in Crl.R.C.No.2793 of 2015, which is pending before this Court, and a stay was granted in those proceedings against the pending Criminal Appeal No.58 of 2015.

3. The disciplinary proceedings ended in dismissal of the petitioner. The final proceedings, on the basis of which the order of dismissal had been granted, also recorded that an amount of Rs.3,90,610.00 had been misappropriated by the petitioner.

4. The petitioner cleared the loan amount and the said loan account was closed on 29/10/2018. Thereafter, the petitioner made various representations dtd. 5/1/2019, 5/3/2019, 22/5/2019 and 29/7/2019 requesting the 3rd respondent to release the house property documents. As the documents were not released, the petitioner approached the banking Ombudsman. The 3rd respondent stated before the Banking Ombudsman that the bank was seeking to recover the amount of misappropriation, as quantified by the bank, from the petitioner and were exercising general lien over the title deeds for repayment of the amounts said to have been misappropriated.

5. The petitioner has now approached this Court by way of the present writ petition contending that retention of the documents of the petitioner relating to his house property, for recovery of amounts alleged to have been misappropriated by him, is arbitrary, highhanded and without any supporting provision of law.

6. Smt. T.V. Sridevi, learned counsel for the petitioner while reiterating the contentions raised above, would submit that in similar circumstances, a Division Bench of the Hon'ble High Court at Madras (Madhurai Bench) in M. Shanthi vs. Bank of Baroda, rep. By its Chief Manager, Namakkal Branch, Namakkal reported,ALT 443 (S.B.) AIR 1992 SC 1066 had held that the bank would not have any such right of lien and would have to return the documents.

7. Sri K. B. Ramanna Dora, learned Standing Counsel appearing for the respondent-Bank, would submit that the bank is entitled to have a general lien over the property, given as security for a loan, and can exercise the said general lien even against the other sums due to the bank and relied upon the judgment of a learned Single Judge of the erstwhile High Court of A.P., in K. Sita vs. Corporation Bank, Kakinada,WritLR 584 = 1=2017 SCC Online MAD 37703 1999 and a judgment of the Hon'ble Supreme Court in Syndicte Bank vs. Vijay Kumar and Ors.,(1992) 2 SCC 331.

8. The learned Single Judge of the erstwhile High court of A.P., after considering various judgments of the Hon'ble High Court at Madras and the judgments of the erstwhile High Court of A.P., and after following the judgment of the Hon'ble Supreme Court, cited supra, had held that once a general lien is created in favour of a bank, the bank is given authority to retain the assets under the general lien, as long as any amount of any account is due to it from the judgment debtor. The assets over which such general lien was granted, in the cases before the Hon'ble Supreme court and the High Court, w