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 otherwise.

JUDGMENT :

M.A. ABDUL HAKHIM, J.

1. Since common issues arise in these Writ Petitions, I dispose these Writ Petitions by a common judgment.

2. The issue involved in these Writ Petitions is that, on closure of the loan by the borrower, whether the Bank is entitled to retain the original title deeds which were deposited with the Bank to create an equitable mortgage to secure the said loan, invoking the general lien under Section 171 of the Indian Contract Act, 1872 , on the ground of other dues under a different loan from the borrower, either as borrower or as guarantor.

3. I heard the learned Counsel for the Petitioners/Borrowers, Sri.Nirmal V. Nair, Sri.Rameez Nooh and Sri.Anjana Kannath and the learned Standing Counsel for the Respondents/Banks, Sri.Jithesh Menon, Sri.Ramola Nayanpally and Sri. M.S. Kiran.

4. The learned Counsel for the Petitioners/Borrowers contended that the Banks have no right to retain the title deeds deposited with them to create an equitable mortgage to secure the loan when the entire liability under the said loan is settled. When the Title Deeds are deposited for a specific loan, they are to be returned on settlement of the said loan. The Bankers’ general lien under Section 171 of the Indian Contract Act cannot be invoked to retain the Title Deeds alleging arrears in some other loans. The Bankers’ general lien under of the Indian Contract Act cannot be invoked against immovable property, as it is available only against goods as defined under the Sale of Goods Act, 1930 . The Title Deeds of the immovable property are not goods within the meaning of of the Contract Act. A general lien under of the Contract Act is available only in the absence of a contract to the contrary. When the borrower has created a mortgage to secure a particular loan, he is entitled to redeem the mortgage by payment of the debt. Such a mortgage is a contract contrary to the general lien provided under . The learned Counsel for the Borrowers cited the decisions of the Hon’ble Supreme Court and of various High Courts including this Court in Gurbax Rai and Others v. Punjab National Bank, New Delhi [(1984) 3 SCC 96], R.D.Saxena v. Balram Prasad Sharma [ (2000) 7 SCC 264 ], Alekha Sahoo v. Puri Urban Co-operative Bank Ltd. and Others [AIR 2004 Ori 142], Biju Jacob v. The Authorised Officer, Federal Bank Limited and Others [2010:KER:20841], State Bank of India and Another v. Jayanthi and Others [AIR 2011 Mad 179], Syndicate Bank v. Sheela Julian [ 2018 (5) KHC 282 ], State Bank of India v. Joshy P.K. and Others [2019:KER:19625], Sunil Ratnakar Gutte v. Union Bank of India [ AIR 2022 Bom 195 ], PNB Vesper Life Science Pvt. Ltd. v. Registrar of Co-Operative Societies [ 2023 (3) KHC 116 ], Thomas George v. Corporation Bank [2023 KER 68061], Balaram Choudhury v. Indian Bank, Bhubaneshwar [AIR 2024 Ori 107], Inkel Ltd. v. Federal Bank Limited [2024 KHC 1604], and Kerala Bank and Another v. Manarkattu Theatres (P) Ltd. [2024:KER:2707] in support of their contentions.

5. Per Contra, the learned Counsel for the Banks contended that the issue is no longer res integra and it is well settled by the decisions of the Hon’ble Supreme Court and of various High Courts, including this Court. The Banks are entitled to retain all securities available with them to invoke the gener