The court established that in a joint savings bank account with either or survivor basis, the bank is entitled to exercise its bankers lien over the account, treating the amount as the property of either account holder for the purpose of exercising bankers lien.

1. The Court: The petitioner assails an action of the State Bank of India as communicated by the writing dated December 6, 2016.

2. Learned advocate for the petitioner submits that, the petitioner is a student, perusing her higher studies abroad. She was awarded a scholarship. She has a bank account with State Bank of India. She had deposited the scholarship amount in such account maintained with the State Bank of India. Since she was travelling abroad for her higher studies, she has inducted her father as the joint account holder in respect of such account. The bank now alleges since the father of the petitioner is a defaulter of certain loan amounts, the account held by the petitioner along with her father is put on hold. The bank has threatened to adjust the amount lying in such account against the outstanding in respect of her father.

3. Learned advocate for the petitioner relies upon (2004) 8 Supreme Court Cases 498 (Anumati vs. Punjub National Bank), All India Reporter 1971 Andhra Pradesh 165 (Nadikatla Anjanna & Ors. vs. Bandi Ramakrishna & Ors.), All India Reporter 1944 Patna 363 (Radha Raman Choudhary & Anr. vs. Chota Nagpur Banking Association Ltd. & Ors.) and an unreported judgment of the Delhi High Court rendered in RFA 164/2010 & CM No. 4991/2010 (Prabha Kaul through representatives vs. Chandra Kaul Muthoo & Ors.) in support of the proposition that the bank does not have a bankers lien over a joint account.

4. Learned advocate for the bank refers to Section 171 of the Contract Act, 1872 and submits that, the bank is entitled to invoke its right of lien over the bank account maintained by the petitioner. He submits that, the account concerned is a savings bank account where both the petitioner and the father have authority to operate such account on either or survivor basis. Therefore the bank is entitled to exercise its bankers lien over such account.

I have considered the rival contentions of the parties and the materials made available on record.

5. Anumati (supra) is concerned with a fixed deposit jointly owned on either or survivor basis pledged by one of the account holders with the bank. The issue coming up for consideration is whether the bank can adjust the amount of fixed deposit kept as pledge in respect of outstanding of one of the account holders without the authority, knowledge or concurrence of the other account holder. It holds in paragraph 11 that, parties to a joint account are not automatically authorised to pledge each other’s credit. It states that, the banker has no right to set off the credit balance in the joint account except in respect of another joint account of the same parties. It goes on to note that, the difference between the joint fixed deposit account and a joint savings, current or other account. It notes that in case of fixed deposit there is no right of one of the depositors to operate such account on its own and withdraw the money on maturity.

6. Nadikatla Anjana (supra) is concerned with a garnishee proceedings in respect of rent revivable. It cannot be read to mean that, a banker cannot apply its bankers lien recognised under Section 171 of the Indian Contract Act, 1872 in respect of a joint savings bank account. No banker is involved in the proceedings.

7. Radha Raman Choudhary (supra) is concerned with a fixed deposit. There difference between a fixed deposit and a saving account is noted in Anumati (supra). The fact scenario in the present case is absolutely different to that obtaining in Prabha Kaul (supra). Prabha Kaul (supra) relates to a suit for declaration and injunction where the allegation is of illegal conversion of fixed deposits and bank accounts by one of the relatives.

8. Section 171 of the Contract Act, 1872 recognises bankers lien. Section 171 of the Act of 1872 is as follows:

“S.171. General lien of bankers, factors, wharfingers, attorneys and policy-brokers.- Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence o