Ghanashyam Kampa vs The Sr. Manager
2022 Latest Caselaw 2061 Ori

             IN THE HIGH COURT OF ORISSA AT CUTTACK

                           W.P.(C) No.36127 Of 2021
                            (Through hybrid mode)

        Ghanashyam Kampa                        ....            Petitioner

                                              Mr. P. Panigrahi, Advocate
                                   -versus-

        The Sr. Manager, Canara Bank,           ....           Opp. Party
        BBSR
                                              Mr. S.K. Mishra, Advocate


                  CORAM: JUSTICE ARINDAM SINHA
                                  ORDER

Order                            31.03.2022
No.
  4.    1.      Mr. Panigrahi, learned advocate appears on behalf of petitioner

and relies on judgment dated 9th August, 2017 of a Division Bench

of Madras High Court in W.P.(MD) no.12613 of 2016 ( M. Shanthi

v. Bank of Baroda). He submits, in the judgment several views of

different High Courts and declaration of law of the Supreme Court on,

inter alia, section 171 in Contract Act, 1872 were discussed. He

submits, in year, 2011 credit facility of cash credit was obtained upon

creating security of stock. Subsequently, a separate sanction for

housing loan was made and security for repayment of that was by

deposit of title deed in respect of the property. According to him, his

client took the first loan for business and the second loan for house.

For the house, the title deed was deposited.

// 2 //

2. It appears from M. Shanti (supra) there were several views

expressed. Some of them are:-

(i) Where there is credit facility extended upon security

obtained for repayment and the bank has a right to recover under the

Securitization and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002, provisions therein will be

override provisions in the Contract Act.

(ii) A specific contract will be a contract to the contrary that

will militate against the banker's general right of lien under section

171 in the Contract Act.

(iii) Bank cannot exercise general right of lien to secure any

other liability of mortgagor, when the deposit was with intention to

secure a particular loan transaction.

(iv) It is doubtful, whether in exercise of general right to

retain title deed, the bank can being the property to sale, for recovery

of some debt in connection with a different transaction, not covered by

the mortgage.

3. Mr. Mishra, learned advocate appears on behalf of the bank and

submits, letter evidencing deposit of title deed in respect of the

housing loan is dated 28th December, 2012. The cash credit facility

was granted earlier on security of stock. There is no stock.

4. The bank is granted adjournment to file additional affidavit

// 3 //

disclosing the memorandum of deposit of title deed. Bank may also

disclose creation of security regarding earlier cash credit facility

granted to petitioner. Advance copy of the affidavit must be served to

petitioner. The affidavit be filed on adjourned date.

5. List on 7th April, 2022.

(Arindam Sinha) Judge Sks