Vijaya Bank v. Gambro Nexim (I) Medicals (P) Ltd. & Ors.

CODE OF CIVIL PROCEDURE, 1908,

--Application for restitution --Appeal against order of refund of FDR amount along with interest Direction to pay same rate of interest----When ex parte decree was passed in favour of bank, it claimed and got interest at the rate of 24 % per annum, therefore, if one principle was applied for the bank then the same must apply even against the bank, thus, the bank was liable to pay interest at the same rate of interest, which it had claimed and got against the company and others in terms of the ex parte judgment and decree.--Company lien its fixed deposit receipt (FDR) as security for bank guarantees issued in favour of Sales Tax Department. However, dispute arose between the company and the bank. Therefore, the bank filed suit, in which the bank obtained in its favour an ex parte money decree with costs and interest. Bank initiated execution proceedings and adjusted the FDR out of the decretal amount. However, the ex parte decree was set aside, therefore, the company filed an application under section 144 seeking payments of the amount of the FDR along with same rate of interest as was claimed by the bank and the same was allowed. Thus, the bank filed an appeal against the order on the ground that the bank had general lien with respect to monies available in its hands for the dues payable by the person, whose monies were the bank and also Court had wrongly granted a high rate of interest. Held: FDRs were given and charged as specific lien only for the claims of the bank in case the Sales Tax Department invoked and encashed the bank guarantees, which were given by the bank. The specific lien so created was never cancelled and the fixed deposit receipts were never available as general deposits for the bank to claim general lien on the same. Therefore, the company and others were entitled to ask the bank to refund the FDRs as the bank did not have any general lien on the two fixed deposit receipts. Further that, when the ex parte decree was passed in favour of the bank it claimed and got interest at the rate of 24 % per annum. Therefore, if one principle was applied for the bank, then the same must apply even against the bank. Thus, the bank was liable to pay interest at the same rate of interest, which it had claimed and got against the company and others in terms of the ex parte judgment and decree. Hence, the appeal was to be dismissed.