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S. G. PANDIT, RAMACHANDRA D. HUDDAR
Union Bank Of India – Appellant
Versus
V. Harish D. Kamath – Respondent
JUDGMENT :
Ramachandra D. Huddar, J.
Appellants who are respondents in W.P.No.8646/2017 assail the order dated 02.05.2023 passed by the learned Single Judge of this Court in the said writ petition by filing this appeal under Section 4 of the Karnataka High Court Act.
2. For convenience, parties to this appeal are referred as per their rank in the writ petition.
3. The brief facts as set out in the writ petition are as under:
By filing the said writ petition, the petitioners challenged the Endorsement dated 02.07.2016 issued by the Corporation Bank, (now Union Bank of India) Asset Recovery Management Branch, Bengaluru, wherein, it is stated that:
In this connection you are aware that our Bank is holding Fixed Deposits in your name as collateral security for the loan sanctioned to M/s.Shreshashayana Enterprises and same were assigned to the Bank as Collateral Security towards the limit sanctioned to M/s.Shreshashayana Enterprises
The court affirmed the validity of a bank's general lien over fixed deposits as collateral for a loan, based on prior agreements executed by the depositors.
A bank cannot exercise a general lien to retain title deeds for debts where the mortgagor is not a borrower and has cleared the outstanding loan.
A general lien under Section 171 of the Indian Contract Act is not applicable to title deeds of immovable property; they must be returned upon loan settlement unless an express agreement allows other....
Home loan – No law for time being in force, permits bank to retain title deeds alleging dues in respect of any other transaction, under Section 171 of Contract Act.
A bank cannot exercise its general lien over documents against a co-borrower for debts related to a different loan. The right to redeem property arises upon repayment of loans secured against it.
A bank cannot assert a general lien over title deeds related to a home loan to secure unrelated debts; repayment of the home loan extinguishes the lien.
The bank holds a valid lien over the salary account to secure repayment of loans, and the statutory protections under Section 60 CPC do not apply to non-attachment actions by the bank.
It is true that jurisdiction of High Court under Art. 226 is an extraordinary jurisdiction vested in High Court not for purpose of declaring the private rights of the parties but for purpose of ensur....
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