The main legal point established in the judgment is the limitation on the bank's right to withhold the entire fixed deposit amount beyond the customer's liability and the requirement of mutuality for the exercise of the bank's lien.

1.The City Union Bank Limited, Thirukattupalli Branch, filed a suit in OS.No.193/1986, before the District Munsif Court, Thiruvaiyaru, against (1) Kumaraswamy, (2) Chellapappa and (3) Thangaraj, for recovery of a sum of Rs.2568.15/-, with future interest.

2.The case of the plaintiff is that the defendant along with others executed a promissory note in favour of the plaintiff/Bank on 19.11.1983 in Thirukkattupalli for Rs.4,000/-, agreeing to repay the same together with interest at Rs.16.50/- per cent per annum (compound interest) with quarterly rests. The loan was advanced for commercial purposes. The liability of the defendants interse is joint and several.

3.The 3rd defendant filed a written statement, wherein, it is stated that the document relied upon by the Bank is not a promissory note, so as to clothe him with any liability and the defendant did not borrow any amount from the plaintiff. The defendant has not participated in any transactions with the plaintiff, regarding the borrowing of the amount and payment of dues to the Bank.

4.The 3rd defendant, viz. C. Thangaraj, filed a suit in OS.No.193/1986, before the District Munsif Court, Thiruvaiyaru, against the City Union Bank, for the recovery of Rs.11,053/-, together with interest thereon, being the amount due under the Fixed Deposit Receipt No.127288, dated 3.8.1985 and also for Rs.10,000/-, towards damages and compensation for the loss of reputation in public and humiliation done to the plaintiff. That in the said suit, the plaintiff has stated that he was a senior Tamil Pandit in the Government High School and also a Mirasdar of having 4 acres of land. He claimed that he is a respectable citizen with an unblemished character in his life. He was having a savings bank account in the City Union Bank Limited in SB.No.1152 from the year 1973 and the 2nd defendant, requested him on several occasions to deposit amounts in his Bank and he obliged him, by making a deposit of Rs.10,000/- on 15.3.1985 in fixed deposit account for one year. The plaintiff also deposited another sum of Rs.10,000/- on 3.8.1985 in FDR.No.127288. The plaintiff got back Rs.10,850/-, that being the amount on the first fixed deposit dated 15.3.1985. In respect of the second deposit in FDR.No. 12728, the plaintiff handed over the fixed deposit receipt to the Vijaya Bank, Thanjavur on 2.8.1986 for the realisation of the amount from the defendants and the Bank dishonoured the fixed deposit receipt on the ground that the defendants are having a lien over the fixed deposit amount of the plaintiff. The defendant's refusal to refund the matured fixed deposit amount is not proper. On the receipt of the notice, Bank gave a reply, without making the payment. The plaintiff contended that there was no express or implied contractual agreement between the plaintiff and the defendants, at any point of time, to have a lien on the fixed deposit amount and therefore, the defendant/Bank cannot exercise any lien over the fixed deposit amount of the plaintiff. As the defendant did not honour the fixed deposit receipt through Vijaya Bank, the plaintiff felt that his name and reputation in the public were completely damaged and he was subjected to humiliation, victimisation, mental agony and ignominy in the estimation of the people, living near him and also the staff of the Vijaya Bank. The plaintiff made a claim of Rs.10,000/-, being the damages for the loss of reputation.

5.The City Union Bank Limited filed a written statement, wherein, it is sated that the plaintiff along with one Kumaraswamy and his wife Chellapappa obtained a loan of Rs.4,000/- and they have all executed a promissory note on 19.11.1983 to repay the said amount together with interest and the plaintiff is the co-promissor, liable to repay the said amount with interest. The loan amount was not paid and there was no response to pay the amount also and therefore, the defendant filed a suit in OS.No.193/1986, before the District Munsif Court, Thiruva