IMPORTANT POINT
National Commission not empowered to arrogate to itself, powers which come within jurisdiction of debt recovery tribunals

J. M. Malik, Presiding Member—Learned counsel for the parties present. Arguments heard.

2. Shri Sudershan Kumar Mittal, the complainant/respondent stood guarantor in the loan account of M/s M. G. Metal Linkers Pvt. Ltd. and mortgaged his two residential properties against the said loan. The complainant, Shri Sudershan Kumar Mittal also stood guarantor of M/s Shri Balaji Educational and Charitbale Trust, which had obtained another loan. It is pointed out that he is the Chairman of Shri Balaji Educational and Charitable Trust. So far as loan of M/s M.G. Metal Linkers Pvt. Ltd. is concerned, it was loan to the tune of Rs.241.60 lakhs. In one time settlement it was agreed that the complainant/guarantor shall pay a sum of Rs.140.00 lakhs to the Bank. He was assured that his title deeds would be returned. However, the needful was not done.

3. On the contrary, the bank demanded another sum of Rs.7,03,467.00, which according to the Bank was due towards interest. The said amount was also paid. It is also admitted that so far as loan of M/s Shri Balaji Educational and Charitable Trust was concerned, that became NPA and the bank released one title deed in the name of Smt. Raj Mittal but the bank did not release the second sale deed and contended that they have lien over all the securities furnished by the respondent/complainant.

4. Both the fora below have come to the conclusion that the bank had given undertaking that they would return the documents but the needful was not done, therefore, they were estopped form withholding the documents of the complainant. The State Commission also mentioned the Supreme Court authority in Ravinder Kaur vs. Ashok Kumar, AIR 2004 SC 904.

5. We have heard the learned counsel for the parties. Learned counsel for the respondent/ complainant vehemently argued that the amount of Rs.140.00 lakhs was given in the hope and undertaking that the opposite party would return the title deeds. They have been cheated and they are estopped from raising this point again and again. It is also argued that their house cannot be auctioned/sold in view of Section 60 of C.P.C.

6. This must be borne in mind that this is a case under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002). Section 60 is not applicable to the provisions under the SARFAESI Act. It is surprising to note that the State Commission has applied the law of estoppel. However, it must be borne in mind that there is no estoppel against the Act. Section 171 of the Contract Act, 1872 runs as follows:

“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 of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect.

7. The Hon’ble Supreme Court in the case of Syndicate Bank vs. Vijay Kumar and Others, AIR 1992 Supreme Court 1066 was pleased to hold that

“in mercantile system the bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of the customers in the ordinary course of banking business. The Bank has the liberty to adjust from the proceeds of the two FDR’s towards the dues to the Bank and if there is any balance left that would belong to the depositor.”

8. The deed of guarantee in Shri Balaji Educational and Charitable Trust has been produced before us. Its para 6 is relevant and is reproduced as hereunder

“6. Bank may hold all securities, goods, negotiable instruments, documents of title to goods or other properties belonging to Guarantor/s which are in Bank’s possession or which may at any time hereafter come into Bank’s possession and Bank may also liquidate any or all of these securities, goods, negotiable