1. The respondent Bank filed an application in IA No. 436/2001 to implead the appellant herein in TA-256/2001, and the same was allowed by the DRT-II, Chennai, by its order dated 14.12.2004. Aggrieved by the same, the proposed party preferred this appeal.
The 1st respondent's husband in the TA before the DRT-II, namely, late V.C. Soundarapandian, was an employee of the respondent Bank herein.
During the course of his employment, it is stated, that he had committed several misdeeds and also misappropriated the Bank's amount for which the respondent Bank had instituted a suit in OS-307/1992 before the Sub-Court, Tuticorin, and the same has been now transferred and pending in TA-256/2001 before the DRT-II at Chennai. That apart, the deceased V.C. Soundarapandian availed loan for which he had created mortgage by deposit of title deeds and as he had committed default in discharging the mortgage, the respondent Bank filed the Suit in OS-332/1994, before the Civil Court, Tuticorin, and when the suit was pending, he died and his LRs were brought on record. S. Vasuki and others who are the defendants in the suit submitted to the decree by filing a Memo on 15.12.1999 and based on the Memo, a decree was passed on 16.12.1999 and they have also deposited the entire decretal amount and, therefore, the decree was fully satisfied. As the respondent Bank subsequently came to know of the sale in favour of the appellant, they have taken out an application in IA-436/ 2001, to implead the present appellant as a party to TA-256/2001, and the same was allowed by the DRT-II, Chennai, and the same is under challenge before this Tribunal.
4. The learned Advocate for the appellant would contend that she had purchased the property on 9.8.1999, which was the subject matter of the Suit in OS No. 332/1994, and respondent's claim in that suit was fully discharged, on the date of purchase there was no order of injunction restraining the vendors from selling he property and the appellant was also not aware of the other suit filed by the respondent Bank in OS-307/1992, which is now pending before the DRT-II, as TA-256/2001, and, therefore, she is a bona fide purchaser of the property for a valuable consideration without notice of the pendency of the claim made by the respondent Bank. It is also further submitted that the respondent Bank cannot exercise the general lien in respect of the title deeds of the immovable property as the title deeds are not 'goods' as defined under Section 171 of the Indian Contract Act, 1872.
In any event, the appellant is not liable to answer any of the claims of the respondent Bank and, therefore, she is an unnecessary party to the proceedings, taken by the respondent Bank, against her vendors.
5. The appellant's contention is that the claim of the respondent Bank in the present suit is not a 'debt' within the meaning of definition under Clause (g) of Section 2 of the RDDB&FI Act, 1993, and the suit itself is not maintainable and inasmuch as the TA-256/ 2001, is also not maintainable. But whereas, the respondent Bank's claim in OS-332/1994, was also fully discharged. It is also stated that there was no order of injunction restraining the owners from alienating the property and the application filed by the-respondent Bank was after purchase of the property and, therefore, the order of injunction obtained by them is not valid and binding upon the appellant. The appellant also contended that he is not a necessary party to the proceedings.
6. It is also brought to the notice of this Tribunal that the appellant, who is the purchaser of the property, has filed an application for the return of the title deeds, which was deposited with the respondent Bank, and the same was allowed and as against the same, the respondent Bank has filed C.R.P. before the High Court at Madras, and the same is pending, 7. On the contrary, the learned Advocate for the respondent Bank had submitted that the property purchased by the appellant was under equitable mortgage with the Bank and they have filed a Suit in OS-307/1992, for recovery of the amount from the vendors of the appellant for the amount defrauded by the deceased V.C.Soundarapandian. As the property held by the deceased was under equitable mortgage with the respondent Bank, they were under the bona fide impression that there was no necessity to have an order of attachment of the said property in respect of the claim relating to OS No. 307/1992, at present pending in TA-256/2001. That only when the respondent Bank came to know that the heirs of the deceased V.C.Soundarapandian were making arrangement to sell the property, they have filed an application for the grant of injunction and when they came to know that the appellant has purchased the property, they have filed an application to implead her as a party to the proceedings. According to the respondent Bank, the appellant is a necessary and proper party to answer the claim of the respondent Bank in respect of the property.
8. The claim of the respondent Bank is that it has got a general lien in respect of the goods bailed to them including the title deeds, which was pledged to them at the time when equitable mortgage was created and when they are exercising a lien over the title deeds in respect of the property which was purchased by the appellant, the appellant is a necessary and proper party for proper adjudication. Incidentally, respondent Bank relied upon Section 171 of the Contract Act, which reads, "Bankers, factor, wharfingers, attorneys of a High Court and policy brokers 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, but no other persons have a right to retain, as a security for which balance, goods, bailed to them, unless there is an express contract to that effect." It is, therefore, contended that the respondent Bank has got a general lien in respect of the title deeds also as there is no contract to the contrary between the Bank and the original pledgors.
9. The respondent further contended that during the pendency of the suit of the : respondent Bank for recovery of the amount relating to the misapporiation committed by V.C. Soundarapandian, the appellant had purchased the property and, therefore, she, is not a bona fide purchaser of the property for a valuable consideration. In any circumstances,, it is submitted that the Banker's lien is not only a paramount lien, but it has get a wider , meaning and application for which he relies upon the case of Syndicate Bank v. Vijay kumar and Ors., I (1992) BC 324 (SC)=(1992) 2 SCC 330, wherein the Hon'ble Supreme Court had dealt with the definition of Banker's lien in all angles by extracting several quoting's from Halsbury's Laws of England, 2nd Edition, Chalmers on Bills of Exchange; 13th Edition; Chitty on contract, 26th Edition and also Pager's Law of Banking 8th Edition, Page 498, which reads, "The Banker's Lien apart from any specific security, the Banker can look to his general lien as a protection against loss on loan or overdraft or other credit facility. The general lien of Bankers is part of law merchant and judicially recognised as such." Almost, very same was expressed in Brandao v.. Barnett (All England Reporter, Page 722-H) wherein, it was held, "Bankers, most undoubtedly, have a general lien on all securities, deposited with them, as Bankers, by a customer, unless there be an express contract, or circumstances that show an implied contract, inconsistent with lien." The above said two definitions go a long way in defining the Banker's lien and state that the Bank has got a general lien on all securities deposited with them.
10. Then a question may arise whether the documents of title deeds pledged with the Bank would amount to a security. The learned Advocate for the appellant contend that mere handing over of the title deeds to a Bank without executing necessary documents to create as a security, will not amount to security. But on the other hand, the respondent Bank contend that the very fact that the title deeds have been handed over with an intention to create a security, it will amount to security deposited with the Bank and, therefore, the Bank has got a general lien even over documents of title deeds. It is no doubt true that mere handing over of the documents of title deeds to a person or to a Bank cannot be considered as a security, unless necessary documents are accompanied with the documents of title deeds as required under law, to create as a security. But in the instant case, the facts and circumstances areentirely different. The vendors of the appellant have not only handed over those documents, but also executed necessary accompanying documents with an intention to create as a security and it was taken as a security. No doubt, that security stood discharged by the payment of the decretal amount. But, however, the respondent Bank is withholding the title deeds till today. As against the order passed by the Sub-Court, Tuticorin, for return of the documents, it is represented before this Tribunal, that the respondent Bank has already preferred C.R.P. as against the said order and the same is pending before the High Court. No doubt, the appellant is entitled to for the return of the documents, when the debt in respect of that document was discharged. But, in the present case, the circumstances are different and the respondent Bank is holding the documents on the ground that they are having a general lien over those documents. As the matter is pending before the High Court for adjudication with regard to the return of the documents, I do not propose to express any opinion in respect of the same.
11. Now, question is whether the appellant is a necessary and proper party to the proceedings pending before the DRT. Admittedly, the appellant had purchased the property which was once mortgaged to the respondent Bank and the said mortgage stood discharged. But, however, the claim of the respondent Bank against the original owner of the said properly is still pending and the respondent Bank also has stated that only with a view to defeat the claim of the respondent Bank, the sale was made in favour of the appellant. If that be so, the duty is cast upon both the parties to prove and disprove their respective claim. The duty cast upon the respondent Bank is to prove that the appellant is not a bona fide purchaser, of the property for a valuable consideration. Likewise, it is also for the appellant to prove that she is a bona fide purchaser of the property for a valuable consideration without notice of the respondent's claim.
12. A party is sought to be added to the suit not only to prevent multiplicity of proceedings but his presence is required for proper adjudication of the suit. What makes a person a necessary party is not merely that he has relevant evidence to give on seme of the questions involved but he would also hound by the result of the action and the question to be settled and question in the action cannot be effectively and completely adjudicated in his absence. The party may have direct interest or the legal interest and commercial interest. When it is made out that, that particular party is having some interest in the suit, then it would be incumbent upon the Court or the parties to implead one as a party to the suit, as it is required for proper adjudication. As the respondent Bank contended that the appellant is not a bona fide purchaser of the property as she was aware of the present litigation also and that the documents are withheld by the Bank, and only in the said circumstances, the respondent Bank filed an application for the grant of injunction from selling the property though the sale had already been made in favour of the appellant, still it requires consideration to have proper adjudication. That in the said circumstances, I do feel that the appellant's presence is necessary before the Tribunal and in that context, I hold that the appellant is a necessary and proper party to the proceedings and, therefore, I am not inclined to interfere wilh the order passed by the DRT.13. In the result, the appeal is dismissed. But however, the DRT-II, Chennai, shall proceed with the matter without being influenced by any of the observations made by this Tribunal in this order.