The complainant who is the petitioner in RP/2077/2018 and respondent in RP/1357/2018 had a savings bank account with ICICI Bank Ltd., which is petitioner in RP/1357/2018 and respondent in RP/2077/2018. On 23.4.2014, a debit of Rs.22,466/- was made in his savings bank account, as a result of which the balance in the said account became NIL. A cheque, which the complainant had issued on 05.6.2014 came to be dishonoured for want of funds in his savings bank account. Being aggrieved, the complainant approached the concerned District Forum by way of a consumer complaint, seeking refund of the aforesaid amount along with interest and compensation etc.
2. The complaint was resisted by the Bank, primarily on the ground that the complainant is an ex-employee of ICICI Bank Ltd. and a sum of Rs.62,500/- was credited in his saving bank account on 18.9.2013, towards salary of the notice period before terminating his service. On the same day, a sum of Rs.70,902/- was credited in his account in full and final settlement of his dues. Thereafter, a sum of Rs.62,386/- was credited in his account towards full and final settlement of his dues but this was done, without adjusting the amount of Rs.62,500/- which the bank had already credited in his account on 18.9.2013. On noticing the same, the bank debited the amount available in the saving bank account of the complainant.
3. The District Forum having dismissed the consumer complaint, the complainant approached the concerned State Commission by way of an appeal. Vide impugned order dated 06.3.2018 the State Commission allowed the appeal by directing the Bank to pay Rs.10,000/- as compensation to the complainant along with the cost quantified at Rs.5,000/-. The aforesaid amount was to carry interest @ 9% per annum if the order was not complied within one month. Since both the parties are aggrieved from the order passed by the State Commission, both of them are before this Commission.
4. The only question involved in these petitions is as to whether the ICICI Bank Ltd. was entitled to debit the amount lying in the Savings Bank Account of the Complainant, without any authorisation / request from him, merely because it had made excess payment towards salary for the notice period to the complainant.
5. Section 171 of the Indian Contract Act to the extent it is relevant provides that the bankers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them. The aforesaid section came up for consideration of the Hon’ble Supreme Court in Syndicate Bank vs. Vijay Kumar & Ors., AIR 1992 SC 1066. In the aforesaid case, the respondent no. 3 before the Hon’ble Supreme Court deposited two sums, one of Rs. 65,000/- and the other of Rs. 25,000/-, by way of two separate fixed deposits receipts, so as to enable the Bank to furnish a bank guarantee on behalf of judgment debtor firm in favour of the Registrar, High Court of Delhi. The fixed deposits receipts were duly discharged by signing on their reverse. Later, the Bank guarantee issued in favour of the Registrar of the High Court was discharged by the Court. The decree holder got a sum of Rs. 35,000/-, out of the amount of Rs. 90,000/-, which respondent no. 3 had deposited with the Bank by way of FDR, attached on the ground that the said amount belonged to the judgment debtor firm of which respondent no. 3 was a partner. The High Court rejected the plea of the Bank that the aforesaid amount could not be attached, since the Bank had a lien on the FDRs against dues in an overdraft account. It was contended on behalf of the Bank that it had a lien over the amount deposited by the judgment debtor and as banker they had a right to hold the security, in respect of overdraft amount. Accepting the contention, the Hon’ble Supreme Court, inter-alia, held that the Bank has a general lien over all forms of securities or negotiable instruments, deposited by or on behalf of the customers in the ordinary course of banking business and such a general lien is a valuable right of the banker, judicially recognised, and in the absence of a contract to the contrary, the banker has a general lien over such security received from the customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of the customer’s debit balance.
This issue also came up for consideration of the Karnataka High Court in Smt. K. S. Nagalambika vs. Corporation Bank & Anr., AIR 2000 Kant 201. In the aforesaid case, the plaintiff had deposited money with the bank and obtained fixed deposits receipts in their name. On maturity, the said deposits were not paid by the Bank on the ground that the plaintiff was a surety for a loan taken by his wife and the amount of the FDR was accordingly adjusted by the Bank towards the loan account of the wife. Claiming the adjustment to be illegal, a suit was filed for recovery of the adjusted amount alongwith interest. The Bank contended that it had general lien and therefore, was entitled to adjust the amount towards the loan account. Relying upon the decision of the Hon’ble Apex Court in Vijay Kumar & Ors. (supra), it was held that undoubtedly the Bank had a lien over the FDRs.
However, in my opinion, Section 171 of the India Contract Act entitles a bank to retain a security, only for the purpose of recovering an amount which is due to it in its capacity as a banker. The general lien under Section 171 of the Contract Act, in my opinion, is restricted to the dues which the bank can claim and recover in its capacity as a banker and does not extend to the dues to which it is entitled in some other capacity. In other words, an amount due to the bank in its capacity as an employer from it erstwhile employee cannot be recovered by exercising a general lien in terms of Section 171 of the Indian Contract Act. The amount which the bank was seeking to recover from the complainant was payable to it in its capacity as the ex-employer of the complainant and not in its capacity as a banker. The bank cannot be allowed to use Section 171 of the Indian Contract Act to recover that amount merely because the account of the complainant happened to have been opened with it. Had the savings bank account of the complainant been with some other bank other than ICICI Bank Ltd., the said bank obviously would not have been able to debit the above referred amount of Rs.22,466/- from that account since it would have no control on that account. The bank therefore, could not have recovered that amount by debiting the amount, which was available in the account of the complainant.
6. In Jammu & Kashmir Bank Ltd. Vs. Attar-Ul-Nissa & Ors. AIR 1967 SC 540, one Sultan Mohd. had borrowed Rs.45,000/- from the Jammu & Kashmir Bank on the basis of a promissory Note. The bank made an erroneous credit of Rs.28,029/15 to the account of Sultan Mohd. The said entries were later credited by the bank. In a Suit filed by the bank for recovery of the amount due from Sultan Mohd., it was claimed by the respondents that the bank could not have reversed the credit entries in the account of Sultan Mohd. It would be pertinent to note here that the credit entries in the account of Sultan Mohd. were reversed at the instance of Accountant General of the State. The High Court held that the bank was not entitled to reverse the credit entry made in the account and pay that money back to the person who had deposited it even though that person may have made the deposit by mistake. The High Court was of the view that as soon as the money is credited in the account of the Constituent, it becomes his money and the bank cannot pay it back to the person who paid it to the account of the Constituent, on his representation that it was paid by mistake. Approving the view taken by the High Court, the Hon’ble Supreme Court inter-alia held that though on facts there was double payment for a certain period due to mistake on the part of the Government, it was not open to the bank to debit the amount of the Constituent like Sultan Mohd., without his authority.
The Bank relied upon the provisions of Section 72 of the Contract Act, in support, the debit entry made by it. Rejecting the contention, the Hon’ble Supreme Court inter-alia observed that Section 72 will only apply to a case of two persons one paying the money and the other receiving the money on behalf of the person paying it. In such a case, if payment is made by mistake, the person receiving the money must return it. But Section 72 has no application to a case where the money is paid by a person to a Bank with instructions that it should be deposited in the account of a third person, who is a Constituent of the bank. It was also held that the bank was not concerned with any mistake made by the Accountant General in sending the money to the bank for credit the same to the account of Sultan Mohd. and it was open to them to recover the amount paid by mistake from Sultan Mohd. A bank however, could not reverse the entries and pay out money from the account of Sultan Mohd., without his authority.
7. In the present case, though the amount debited in the account of the complainant belonged to ICICI Bank Ltd., the said amount was not due to it in its capacity as the banker of the complainant. The said amount was due and payable to ICICI Bank Ltd. in its capacity as the ex-employer of the complainant. Therefore, instead of debiting the aforesaid amount taking advantage of the complainant having the said account with it, the ICICI Bank Ltd. should have taken recourse to legal proceedings to recover the excess payment from the complainant.
8. The next question which arises for consideration is as to what would be the appropriate order to be passed in this case. Though, in my opinion the bank ought not to have debited the amount of Rs.22,466/- in the account of the complainant, the fact remains that the complainant was legally liable to return the said amount to the bank if it was paid by mistake. Therefore, it would not be just and fair to direct the bank to return the aforesaid amount of Rs.22,466/- to the complainant. At the same time it cannot be disputed that the
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bank has been deficient in rendering services to the complainant since it debited the aforesaid amount of Rs.22,466/- from the account of the complainant, without any authorisation from him. The Bank therefore must compensate the complainant for the aforesaid deficiency on its part in rendering services to the complainant. The State Commission having directed payment of a token compensation of Rs.10,000/- to the complainant, along with cost of litigation quantified at Rs.5,000/-, the order passed by the State Commission, in my opinion, does not call for any interference by this Commission in exercise of its revisional jurisdiction. 9. Both the revision petitions are therefore, dismissed. ICICI Bank Ltd., petitioner in RP/1357/2018 is granted four weeks from today to pay compensation and cost in terms of the order of the State Commission. No interest would be payable if the said payment is made within four weeks from today. However, interest on the compensation amount of Rs.10,000/- would be payable from the date of the order of the State Commission in case this order is not complied by the Bank within four weeks from today.