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2006 (3) CPR 59 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION,
NEW DELHI
S.N. Kapoor, Presiding Member and B.K. Taimni, Member
M. Mallika & Ors.—Appellants
versus
The Managing Director, State Bank of India & Ors.—Respondents
First Appeal Nos. 664, 668 and 669 of 1996
Decided on 27-7-2006
Counsel for the parties:
For the Appellants : Nemo.
For the Respondents:Mr. V.G. Pragasam, Advocate.
IMPORTANT POINT
Bank’s General lien u/s. 171 of Contract Act, prevails over rights of mortgagor u/s. 60(a) of Transfer of Property Act, 1882. Even after redemption of Bank loan, Bank, Mortgagee can exercise general lien for loans/claims outstanding against mortgagors in its other Branches as Bank is a juristic person.
Headnote:Consumer Protection Act, 1986 — Section 19 — Appeal against order of State Commission holding Bank is deficient in service but not granting compensation — Transfer of Property Act, 1882 — Section 60 — Right of Mortgagor to get back title deeds after redemption of debt — Mortgage Bank not returning title deeds in exercise of its right of general lien — Contract Act, 1872 — Section 171 — Bank has right of general lien — Section 171 prevails on Section 60, being particular — So no deficiency in Bank service — But as Bank is not in appeal, it is not disturbed — But appeals are dismissed with cost.
Held: While the Complainant has right to get back the documents/title deeds given and deposited to secure concerned loan by mortgaging the property after the entire instalments have been paid in respect of the loan account
which has been cleared, the Bank is also entitled to exercise its right of general lien u/s 171 of the Contract Act. (Para 18)
For the aforesaid reasons in terms of Section 171 and in the light of judgment in the case of Syndicate Bank v. Vijaya Kumar, (1992) 2 SCC 330, we feel that the bank was absolutely justified in feeling inhibited in returning the documents/title deeds. M/s. Bava Trading
Corporation, M/s. Cauvery Knitting Co. and K.R. Krishnamurthy & Sons and suit guarantor for all the credit and loan facilities sanction to the said firms. As such, in all the three cases, notwithstanding the provisions under Section 60 of the Transfer of Property Act, the bank was entitled to exercise its right of general lien under Section 171. The mortgagers right to get back title deeds under Section 60 is right of general nature. Provisions of the Contract Act under Section 171 carves out an exception to the said general rule in order to protect the interest of the bank by ensuring right to retain the document so that other loan accounts of the bank are also cleared by borrowers or guarantor without forcing the bank to file suits. (Para 19)
Since the bank is not in appeal, we are not supposed to disturb the findings of the State Commission about deficiency. However, in the aforementioned circumstances coupled with the fact that the complaint was filed just within 15 days from giving notice, there is no room for awarding any compensation for the
alleged mental agony and harassment. All the three appeal Nos. 644, 688 and
669 of 1996 for enhancement of the
compensation are dismissed with cost Rs. 1000/- to Bank in each of the three
appeals.(Para 20)
Result : Appeal dismissed with cost.
S.N. Kapoor, Presiding Member — By this order, we proceed to decide above three appeals arising out of similar and common questions of law and facts. The Complainants/Appellants were either partners or guarantors of loans granted to 4 other firms. By these appeals, they are claiming compensation for mental agony and harassment, caused due to non delivery of their title deeds, despite all payments.
2. In all these three appeals, the Appellants were Complainant, before the State Commission and all the three filed three separate complaints seeking similar reliefs of direction against the State; Bank of India to deliver the documents/ title deeds of mortgage properties for the entire amount had been paid in terms of Section 60 (a) of the Transfer of Property Act, 1882 along with compensation for mental agony of Rs.5,00,001/- in two cases and Rs. 10,00,001/- in one case and cost.
On the other hand, the bank has contested the matter on the ground that these complainants were also partners and guarantors of loans granted to other concern and huge sums were due against them as Guarantors.
3. The bank contested FA No. 664 of 1996, inter alia, on the ground that the complainant -Mrs. M. Mallika deposited the documents while taking loan on behalf of M/s. Annapoorna Agencies. She was not only the partner of M/s. Annapoorna Agencies but also partners of M/s. Venkatakrishna and Cauvery Knitting Company and she stood as guarantor for all the loan facilities sanctioned by the State Bank of India. The above said firms committed defaults in payment of dues. The bank exercised its right to lien u/s 171 of the Contract Act against the security given by the Complainant/Appellants to usual recovery of their
dues in these matters. Two suits had been filed against M/s. Venkatakrishna and Cauvery Knitting Company for recovery of Rs. 1,12,132.50 paise and Rs. 4,94,259.58 paise, respectively.
4. Similarly in the case of S. Muruganandiam (FA No. 669/96), he deposited the documents while taking loan on behalf of M/s. Kamdhenu Farms. Account of Kamdhenu Farms was cleared by the Complainant and it was closed. He was partner in 4 other Firms M/s. Bava Trading Corporation, M/s. Bava Enterprises, M/s. Cauvery Knitting Co. and Sri Enterprises and a suit had already been filed to recover Rs, 46.00 lakhs before filing of this complaint.
5. Similarly K. Kumaresan (FA No. 668/96), he deposited the documents while taking loan on behalf of M/s. Kamdhenu Farms. He was partner in
M/s. A.G. & M.K. Suppliers and Bava Trading Corporation stood as guarantor and a suit had already been filed to recover Rs. 28,02,312/- against A.G. & M.K. Supplier and Rs. 7,37,887.02 against M/s. Cauvery Knitting Co. before filing of the complaint.
6. In all these three matters notices were sent to the bank seeking return of documents/title deeds.
7. It may be mentioned that in all these three matters during the pendency of the complaint the documents had been returned and the complainant are now seeking just compensation which had not been granted despite the finding that the bank was deficient in service in not returning the documents/title deeds in time.
8. The State Commission after considering facts and circumstances just directed the opposite parties to return the documents/title deeds of the complainants within 15 days from the date of order with cost of Rs.2000/-.
9. Feeling aggrieved, the appellants have filed the present appeal for awarding compensation for harassment and mental agony.
10. We have heard the Ld. Counsel for the respondent and gone through the record.
11. The State Commission took the view that the bank was deficient in service on account of failure of return of the documents/title deeds in time.
12. Ld. Counsel for the Respondent/Opposite Party relied upon Section 171 of the Contract Act and on the judgment in the case of Syndicate Bank v. Vijaya Kumar1, in support of his contention that the Bank was not deficient in rendering service for non-return of title deeds to thes
