JUDGMENT
Y.K. Sabharwal, J.
(1) This appeal is directed against the orderdated 20/04/1992 made by Additional District Judge dismissing the application of the appellant, State Bank of Mysore filed under Order 21 Rule46-A, Civil Procedure Code and directing the bank to deposit the amount of F.D.R. with interest in the said Court as soon as possible but not later than seven days from the date of the order. Briefly, the facts are these :-
(2) Respondent No. 1 Surjit Kaur obtained a decree on the basis of award against J.S. Butalia, Proprietor of Jayes International on 31/09/1991. Reference to arbitration was make on 18/07/1991. On 2 8/08/1991 an award was made in favor of respondent No. 1 and against respondent No. 2 and the award was made rule of the Court and decree passed in terms thereof on 3/09/1991, Respondent No.2-judgment-debtor stated before the arbitrator that the amount of the F.D.R. be recovered from the bank to satisfy the award and it was so recorded in the award. Immediately thereafter i.e. on or about 12/09/1991 the execution petition was filed by respondent No. 1 against respondent No. 2seeking attachment of the amount of F.D.R. including interest due thereupon till date. The F.D.R. was with State Bank of Mysore. A prohibitory order was passed by the Executing Court on 15/09/1991.
(3) The stand of the Bank before the Executing Court was that F.D.R.for Rs. 55,906.90 favoring respondent No. 2 was under its general lien for liabilities of respondent No. 2 towards the bank and there is no credit balance available with the bank for being remitted in terms of the order of the Court.As the Garnishee order had been served on the bank it filed objections under Order 21 Rule 46-A, Civil Procedure Code inter-alia, stating that respondent No. 2 the judgment debtor owed a huge sum to the bank and a suit for recovery of had been filed on 11/05/1990 against him by the bank in the Court ofRs. 8,24,369.00 Senior Sub-Judge, Gurgaon. which was pending. The Bank said that F.D.R. was given to it as security for bank guarantee which the bank had given on behalf of the respondent No. 2 and that the bank guarantee had been discharged and after discharge of the bank guarantee the bank had every right to adjust the amount of the F.D.R in exercise of its general lien over the F.D.R. It was also pleaded that the bank had every right to adjust the amount of F.D.R. against its dues. Further the bank pleaded that the parties in order to play a fraud got a collusive award prepared which does not affect its right to adjust the amount due on F.D.R. It was also pleaded that the respondent No. 2 much after filing of the suit procured the award and himself got statement recorded in the award that the amount of F.D.R. be recovered from the bank when he fully knew that he had to pay a huge sum of Rs. 8,24,369.00 with costs and interest to the bank. The case of the banking the objection petition was that no amount was due from it to respondent No. 2 for which any Garnishee order could be issued. It was pleaded that the award was procured to get a handle to deprive the bank of the amount of theF.D.R. The objections tiled by the bank were dismissed by the impugned order. An application for review filed by the bank, inter-alia, pleading that the amount of the F.D.R. bad been adjusted by the bank on 21/10/1991 in the Protested Bill Ledger and that the said fact escaped the attention of the Manager of the bank as ledger and adjustment is not dealt with by the Manager but by the staff working at the Counter, was rejected by the executing Court on 6/05/1992.
(4) In this appeal the bank was directed to produce relevant record to show that in exercise of its lien the bank had already adjusted/appropriated the amount in question. Inspection of the said record was also given to the respondents. Photostat copy of the said record in support of the plea of adjustment by the bank in the Protested Bill Ledger has also been placed on record of this appeal.
(5) The Executing Court, for dismissing the objections of the bank that it has general lien on the amount of the F.D.R. has placed reliance upon a decision of a single judge of this Court in Vijay Kumar v. Jullunder BodyBuilders, Delhi and Others, A.I.R. 1981 Delhi, Page 126, and from this decision the following passage has been extracted in the impugned order :- “WHERE the contract between the customer (judgment-debtor)and the bank was to furnish a guarantee for certain amount on the understanding that the bank will hold the fixed deposit receipts furnished by the Customer as a security for the guarantee the bank gave on behalf of the Customer and the liability under the guarantee was discharged by the Court, the bank could not hold the deposit receipts in their hands for the general balance due to the customer in the customer’s overdraft account when the endorsement of the bank manager on the reverse of the letter given by the customer in connection with the guarantee on the usual printed from indicated that the fixed deposit receipts were given in connection with the bank guarantee only the letter had to be read with the endorsement and so read would constitute a contract contrary to the general lien of the bank. Consequently, the Court, in whose favor the guarantee was given could attach the fixed deposit receipts in the hands of the bank as the amount under the fixed deposit receipts belonged to the customer.”
(6) In view of the aforesaid decision the executing Court held that the bank/appellant is not entitled to adjust the amount of the F.D.R.
(7) The aforesaid decision of this Court on which reliance was placed by the Executing Court had already been reversed by the Supreme Court inre: Syndicate Bank v. Vijay Kumar and Ors., . The Supreme Court decided that case on 5/03/1992 whereas the impugned order is dated 20/04/1992. It has been held by the Supreme Court that having regard to the mercantile custom as judicially recognised the bank has a general lien over all forms of deposits and securities made by or on be half of the customer in the ordinary course of banking business. The Supreme Court not only relied upon the recital in the letters in the said case Creating lien in favor of the bank but also pronounced about the right of the bank of general lien over all forms of deposits or securities made by or on behalf of the customer in the ordinary course of banking business.
(8) Apart from the right of the appellant to exercise the general lieu on the amount of the F.D.R. as according to it huge amounts were due to the bank from respondent No. 2 and much before passing of the decree on the basis of the award, a suit for recovery of over Rs. 8 lakhs had been filed by the bank against respondent No. 2, it seems that the amount of the F.D.R. had been adjusted by the bank on 2 2/10/1991. The documents in that regard, as noticed above, have been placed on record of this appeal. Having regard to the facts and circumstances of the case the fact that the said documents were not placed by the bank on Execution Court record at the time of filing objections under Order 26 Rule46-A, Civil Procedure Code or lack of specific pleading about adjustment in the said objections is not of vital consequence. I may also notice that in this appeal the appellant has also placed certain documents in support of its contention that respondent No. 1 was, in fact, an employee of respondent No. 2 and had been writing letters to the bank for and on behalf of respondent No. 2as Manager of respondent No. 2 with a view to support its plea that the whole affair between the respondents Nos. 1 and 2 was collusive with a view to deprive the bank of its dues and somehow procure the amount of theF.D.R.
(9) For the aforesaid reasons, the impugned order, dated 20/04/1992 is set aside. The direction to the appellant-bank to deposit the amount of the F.D.R. cannot be sustained as no amount is due from the Garnisheei.e. the bank to respondent No. 2. The appeal is, accordingly, allowed and the impugned order is set aside leaving the parties to bear their own costs.