IN THE HIGH COURT OF JUDICATURE AT MADRAS Orders Reserved on Orders Pronounced on

4.9.2023 08.11.2023 CORAM THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR AND THE HONOURABLE MR.JUSTICE P.B.BALAJI W.A.No.1062 of 2020 and C.M.P.No.12977 of 2020 P.K.Parthiban ... Appellant/Petitioner Vs.

1. The Regional Manager, Canara Bank, No.524, Anna Salai, Teynampet, Chennai.

2. The Manager, Canara Bank, Ponneri Branch, Ponneri – 601 204, Tiruvallur District. ... Respondents/Respondents Appeal filed under Clause 15 of Letters Patent to set aside the order dated 12.08.2020 passed in W.P.No.8986 of 2017.

For Appellants : Mr.M.L.Ramesh For Respondents 1 & 2 : Mr.S.Parthasarathy *****

JUDGMENT

D.KRISHNAKUMAR, J.

Facts in Brief:

The appellant executed a mortgage deed in Doc.No.1155 of 2014 dated 11.2.2014 on the file of the Office of Registrar, Ponneri, as a guarantor by deposit of title deed in respect of vacant land measuring an extent of 17 cents comprised in S.No.348/2A of Kolur Village, situated at Ponneri Taluk, Tiruvallur District for the overdraft facility availed by one G.Mahendiran for a sum of Rs.25,00,000/- in Overdraft A/c No.3725256000025. Thereafter, the appellant had availed an overdraft facility independently for a sum of Rs.15.00 lakhs initially and later it was enhanced to Rs.35,00,000/- during the year 2014 by mortgaging his another property viz., vacant land measuring an extent of 0.65 acres (26.5 ares) comprised in S.No.342/5B of No.22, Kolur-III Village, Kolur Panchayat Union, Ponneri Taluk, Tiruvallur District. The borrower G.Mahendiran had cleared the entire loan and the respondent Bank had also issued a certificate stating that there is no due pending in the aforesaid overdraft account. However, pursuant to the certificate issued by the respondent bank, when the appellant had approached the respondent Bank to return the title deed deposited by him since the borrower already cleared the entire loan, the respondent bank refused to release the documents and giving no objection or removing the encumbrance by stating that the appellant is liable to pay an outstanding amount of Rs.56,42,429/- as on 31.10.2017. The respondent Bank is claiming a general lien under Sec.171 of the Contract Act. Challenging the same, the appellant has filed the instant writ petition in W.P.No.8986 of 2017 for issuance of Mandamus directing the respondents to return the title deeds placed with the second respondent Bank by creating a mortgage by deposit of title deeds in Doc. No.1155 of 2014 dated 11.2.2014 on the file of the Registrar of Ponneri.

2. The learned Single Judge dismissed the writ petition by holding that the rights under Section 171 of the Indian Contract Act can be exercised on an immovable property deposited with the respondent Bank as security.

Aggrieved by the same, the present appeal.

3. The appellant raised several grounds in the appeal by stating that the learned Single Judge failed to note that there is no express undertaking given by the appellant with the second respondent to extend the mortgage created on 11.2.2014 to the overdraft facility obtained by the appellant later. The learned Single Judge failed to note that the overdraft facility obtained by the appellant later is also secured by another property by creating a mortgage. Therefore, power under Section 171 of the Indian Contract Act cannot be exercised by the Bank without approval from the appellant.

4. According to the learned counsel appearing for the appellant, the respondent bank cannot exercise right of general lien to secure any other liabilities of the mortgagor by retaining the documents of the mortgagor or guarantor, which are deposited with an intention to secure a particular loan transaction. In support of his contention, the learned counsel appearing for the appellant placed reliance on the following decisions:

1. Mangalore Catholic Co-operative Bank Ltd., Managalore Vs. Msundara Shetty [CDJ 1987 Kar HC 271]

2. Syndicate bank Vs. Vijayakumar [CDJ 1992 SC 224]

3. State Bank o