Rajasthan

StateCommission

A/308/2022

Chola Mandalam M.S General Insurence Co. - Complainant(s)

Versus

Jarnel Singh - Opp.Party(s)

Ajayraj Tatiya

23 Nov 2022

ORDER

RAJASTHAN STATE CONSUMER DISPUTES REDRESSAL COMMISSION, JAIPUR

 

 

FIRST APPEAL NO: 308/ 2022

 

Cholamandalam Investment & Finance Co. Ltd., Regd. Office “Dere House” No. 2, SSC Bose Road, Pare, Chennai-600001 & ors.

Vs.

Sh. Jarnail Singh s/o Sh. Satnam Singh r/o Fatehpur Dhalia, Tehsil Sangaria Distt. Hanumangarh (Raj.)

 

Date of Order 23.11.2022

Before:

Hon'ble Mr. Justice Devendra Kachhawaha-President

Hon'ble Mr.Atul Kumar Chatterjee- Member (Judicial)

Hon'ble Mrs. Shobha Singh-Member

 

Mr. Ajayraj Tantia learned counsel for the appellant

None present on behalf of respondent despite service of notice

 

 

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BY THE STATE COMMISSION ( PER HON'BLE MR. ATUL KUMAR CHATTERJEE, MEMBER (JUDICIAL):

 

This appeal has been filed by the appellants/opposite parties against the order of learned District Consumer Commission, Hanumangarh dated 22.6.2022 passed in Complaint Case No.336/2017, whereby the complaint filed by respondent/complainant was allowed.

 

In this matter the controversy involved is that whether the appellants/opposite parties were correct in withholding the documents deposited by respondent/complainant as security in lieu of the loan availed by him from the appellants financial institute. In this matter it is admitted that the respondent/complainant was a guarantor of another loanee Jagan Singh who in turn has defaulted in payment of the outstanding loan amount. The appellant financial institute had, on the basis of clause 21 (Lien and set-off) of the loan agreement executed between both the parties declined to release the documents of the respondent/complainant despite payment of the amount of loan availed by him.

 

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The respondent/complainant brought a complaint against the appellants/opposite parties alleging deficiency of service saying that not providing the documents despite payment of loan by the complainant was not correct and the appellants were not entitled to detain those documents, may be that respondent/complainant was guarantor of another loanee Jagan Singh who has stated above in turn defaulted in payment of the outstanding loan amount against him.

The learned counsel for the appellants while relying on the judgments passed by this Commission in Appeal No. 440/2014 ( Indusind Bank Ltd. Vs. Dharamveer Gurjar ) decided on 24.2.2015, First Appeal No. 106/2015 (AU Financiers (India) Ltd. Vs. Jitendra Mali )decided on 3.3.2016 and Appeal No. 1302/2012 ( Yaadram Vs. Indusind Bank Ltd.) decided on 4.12.2014 has contended that condition no. 21 of the loan agreement executed between the appellant company and respondent complainant empowers the company to have a lien and right of set-off on all moneys belonging to the borrower/guarantor.

Since no body is present on behalf of respondent/complainant, we deem it proper to dispose of this

 

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appeal on the basis of the contentions of the learned counsel for the appellants and record.

 

So far as legal position is concerned Hon'ble Supreme Court in the case of Svenska Handelsbanken Vs. Indian Charge Chrome reported in 1994 SCC (1) 502 and Syndicate Bank Vs. Vijay Kumar & ors. reported in (1992) 2 SCC 330 has held that apart from any specific security, the banker can look to his general lien as protection against loan or overdraft or other credit facility. The general lien of bankers is part of law merchant and judicially recognized as such.

As stated above it is more or less undisputed that the respondent/complainant had given guarantee in respect of the loan availed by Jagan Singh from the appellant company itself besides availing loan for himself (complainant). It is also undisputed that though the respondent/complainant had paid the entire outstanding amount in lieu of the loan availed by him but Jagan Singh, for whom the complainant had given the guarantee, had defaulted in payment of loan. From the copy of loan agreement executed between the appellant company and the complainant, the condition no. 21 “Lien and set-off” is as under:

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“ (a) The company shall have a lien and right of set-off on all moneys belonging to the Borrower/Guarantor standing to its credit in any account whatsoever with the company. If upon demand by the company the balance outstanding in the loan account is not repaid within the prescribed time, such credit balance in any account of the Borrower/Guarantor or his relatives as defined under the Companies Act,1956 or partners as the case may be, shall be adjusted towards dues under the loan account. In case of any deficit, the deficit amount may be recovered by the company from the Borrower/Guarantor.

(b) Nothing contained in these presents shall be deemed to limit or affect prejudicially the rights and powers of the company under the security documents or letters of guarantee or any of them or under any law.

100. There shall be no set-off or counter claim by the Borrower/Guarantor and that all payments made by the borrower under this agreement must

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be made without set-off or guarantee or any of them or under any law.”

 

The bare perusal of the above condition reveals that the appellant company had a lien over the property kept as security while availing loan by the loanee or guarantor. In this matter since the documents of vehicle were kept by the appellant company as security and as stated above the respondent/complainant Jarnail Singh stood as guarantor for the loan of Jagan Singh who failed to re-pay the loan amount as per scheduled terms therefore, under the above condition the appellant company was lawfully authorized to detain those documents kept as security and as such had the authority to decline to issue No Objection Certificate and return the documents for the loan availed by the complainant despite it is being paid completely.

From the above discussions we arrive at a conclusion that the law regarding the banker's right of lien is no more res-integra therefore, we are of the opinion that the judgment of learned DCC Hanumangarh is not sustainable in the eye of law as such the impugned judgment dated 22.6.2022 is hereby

 

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quashed and set aside and the appeal filed by the appellants/opposite parties is hereby allowed. No costs.

 

(Shobha Singh) (A.K.Chatterjee) (Devendra Kachhawaha)

Member Member(Judicial) President

 

 

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