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TMI Blog1990 (1) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... s raised on one E. V. John, the brother of the judgment-debtors, giving a fixed deposit receipt for a sum of ₹ 6,500/- issued by the petitioner-bank as security to the court. In execution of the decree the court, treating the bank as a garnishee, called upon the bank to deposit the amount and interest thereon, covered by the fixed deposit, in court. This order, directing the bank to deposit the amount, it is submitted on behalf of the decree-holder, was passed after rejecting the bank's contention that the bank has a 'lien' over the amount in fixed deposit. Since this order was passed without considering the above contention of the bank, according to the bank, the bank filed E.A. 781/87 seeking review of the order. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' in respect of the fixed deposit? An effective answer to this question could be had only if we understand the relation of banker to the customer in regard to fixed deposit. The fixed deposit is one of the three bank deposits; the other two being saving deposits and current deposits. We should in this connection remember that money lodged with banks as fixed deposits stricto jure is a loan to the bank. The banker in connection with the 'fixed deposit', therefore is a debtor. The depositor accordingly would cease to be the owner of the money in fixed deposit. The said money becomes the money of the bank, enabling the bank to do as the bank likes, that however, with the obligation to repay the debt on maturity. (See page 411 of Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , money in the fixed deposit can be adjusted towards the agricultural loan account, the bank has been maintaining in the name of E.V. John. This Section no doubt entitles a banker in the absence of a contract to the contrary, retain, as security for a general balance of account any goods bailed to them. This Section is one of the 24 Sections in the Contract Act governing the transactions called 'bailment'. To attract this provision a bank should therefore establish that it is a bailee within the meaning of Section 148 Contract Act. A bailment, going by the definition, is the delivery of goods by one person to another for some purpose, upon a contract that, they shall, when the purpose is accomplished, be returned or otherwise dispos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hatever account the bank chooses, to set off or liquidate the debt . The situation highlighted in the above observation, going by the statement of law by Buckley LJ (in Halesowen's case)(1971 (1)QB 1), is an 'accounting situation' in which 'the existence and amount of one party's liability to the other can only be ascertained by discovering the ultimate balance of their mutual dealings'. To put it differently, the banker has the right to 'set off one account against the other. The use of the word 'lien' in this context is misleading. (See the observation made in this regard by Lord Denning M. R. in Halesowen's case). 10. The direction given by the executing court to deposit ₹ 8,812/- made men ..... X X X X Extracts X X X X X X X X Extracts X X X X
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