1. This execution case raises the question of a banker's lien.
2. The decree-holder obtained a decree on November 2, 1979, for Rs. 1,04,441.35 with future interest at 9 per cent. per annum and costs against the judgment-debtors, Jullundur Body Builders. In the course of execution, the judgment-debtor said that they will pay the decretal amount in Installments. They were accordingly required to furnish a bank guarantee in the sum of Rs. 90,000. The judgment-debtors approached the Syndicate Bank (the bank) with whom they had an overdraft account. They deposited two fixed deposit receipts with a covering letter with the bank and requested it to issue a guarantee in favor of the Registrar of this court. The particulars of the FDR are under :
(1) FDR dated 9-5-80 for Rs. 25,000 to mature on 1-7-85.
(2) FDR dated 17-9-80 for Rs. 65,000 to mature on 17-12-83.
3. The deposit receipts were duly discharged in favor of the bank. On September 17, 1980, the bank executed a deed of guarantee for Rs. 90,000 in favor of the Registrar.
4. On October 27, 1980, a Division Bench of this court discharged the bank guarantee as the proposal to pay in Installments was not acceptable to the decree-holder.
5. On the application of the decree-holder this court attached an amount of Rs. 35,000 in the hands of the bank out of the amount of the aforesaid deposit receipts. The order of attachment was made by R. N. Aggarwal J. on November 21, 1980. The bank as a garnishee has now raised on objection to the attachement. The ground of objection is that the bank has a lien on the deposit receipts and that the amount does not belong to the judgment-debtors and cannot, thereforee, be attached. It is the validity of this defense which is in question.
6. The judgment-debtors are customers of the bank. They have an overdraft account. The bank has allowed them overdraft facility up to Rs. one lakh. It is not clean overdraft. The judgment-debtors have admittedly given securities like hypothecation of stocks and machinery on this account. On November 21, 1980, when the attachment order was issued there was a debit balance of Rs. 1,17,365.95 in this account. The bank now claims that they have a lien on the amount of Rs. 90,000 of the deposit receipts and that they will exercise their right of set-off when the receipts mature against the balance of account. Reliance is placed by the bank on the covering letter which the judgment-debtors wrote on 17th September, 1980, when they requested the bank to issue a guarantee in favor of the Registrar. The letter reads :
Dev Nagar's Br., New Delhi.
Our Fixed Deposit Account No. 389914/7493 389914/7493 covered by yourReceipt/Certificate No. 389914/7493 389914/7493 for Rs. 65,000 due on17th Dec. 1983.
We enclose herewith our Fixed Deposit Receipt Certificate No. 389914/7493 389914/7493 dated September 17, 1980, for Rs. 65,000 due on December 17, 1983, duly discharged by me as security for the loan/overdraft account of Sri/Smt. M/s. Jullundur Body Builders for Rs. 90,000. The bank is at liberty to adjust from the proceeds of other receipts/certificates issued in renewal thereof at any time without any reference to me/us, to the dues under the said loan/OD account. I/We agree that the above deposit and renewals shall remain with the bank so long as any amount on any account is due to the bank from us of the said Sri/Smt. M/s. Jullundur Body Builders singly or jointly with others.
The other letter for the deposit receipt of Rs. 25,000 is in identical terms.
7. The bank relies on the last paragraph of the letter which entitles the bank to retain the receipt 'so long as any amount on any account is due to the bank from us' (the judgment-debtors). The decree-holder on the other hand relies on the fixed deposit receipts where, on the reverse, the following words appear :
'Lien to BG 11/80.'
8. This means that the deposit receipts are being held against the guarantee furnished by the bank. This is clear from the first paragraph of the letter which says that the receipt of Rs. 65,000 is held 'as security' for Rs. 90,000. The two receipts of Rs. 65,000 and Rs. 25,000 are, thereforee, securities which the judgment-debtors have given to the bank for issuing the bank guarantee. If they are asked to pay Rs. 90,000 to the Registrar they can recover the money from the deposit receipts. This is the arrangement. The letter of September 17, 1980, has to be read in the light of this arrangement. The circumstances show that the agreement was for the specified purpose of guarantee. It was a special contract for a special and exceptional transaction.
9. By mercantile custom the banker has a general lien over all forms of commercial paper deposited by or on behalf of a customer in the ordinary course of banking business. The custom is displaced by either an express contract or circumstances which show an implied agreement inconsistent with the lien. This proposition was established as long ago as 1846 in the leading case of Brandao v. Barnett  12 Cl & F 787.
10. In re Bowes  33 Ch.D. 586, where a policy of life assurance was deposited with a memorandum which expressed the deposit as security for all sums due up to a limit Pounds 4,000, North J. held that a lien would not be implied so as to extend the effect of the security beyond the agreed overdraft. The most frequent example of circumstances inconsistent with the general lien is in the case of deposit expressed to cover an advance for a specified purpose. (See Chitty on Contracts, vol. 2 (24th edn) para. 2643).
11. Lien is the right to retain property belonging to another until a debt due from the latter is paid. This is a possessory lien. It has judicially been defined as an 'implied pledge'.
12. The bank is claiming in this case a general lien because they say that they have a right to retain the deposit receipts for all the general balance due from the judgment-debtors. In other words they claim a banker's lien which is a special form of general lien. They assert a right to retain such of their customer's property as has come into their bands in the ordinary course of business as a banker.
13. In Brandao v. Barnett 12 Cl & F 787 Lord Campbell made the classic statement. He said :
'Brandao 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 the lien.'
14. It is contended that the ban has a banker's lien, that the judgment debtors are their customers, and they handed over to them the deposit receipts as security, that they have these in their hands and are entitled to hold them, not only for the guarantee they issued but, also for the general balance due in the overdraft account. In other words, it is claimed by the bank that they have a further right as bankers to hold the securities in respect of the overdraft account. In other words, it is claimed by the bank that they have a further right as bankers to hold the securities in respect of the overdraft account.
15. I have no hesitation in rejecting the bank's claim. It appears to me that the claim of the bank is inconsistent with the terms of the special contract. The contract was to furnish a guarantee for Rs. 90,000 on the understanding that the bank will hold the deposit receipts as a security for the guarantee they give on behalf of their customers. The contract is expressed pithily in those 'lien to BG 11/80'. The charge is limited to the amount of the bank guarantee. After the bank guarantee has been released the bank has no right to hold the security in their hands. They are bound to return it to the customer when he makes a demand on them. It seems to me that the express term of this contract between the banker and the customer is inconsistent with the general lien that the bank claims. It could claim a particular lien for the bank guarantee. But it has no general lien. Now, that the bank guarantee has been discharged the bank has no right to hold the securities for something more than what was originally agreed upon. Sir Macenzie Chalmers in his Bills of Exchange, 3rd Edn. (p. 92) says :
'The terms on which securities are deposited may, of course, create merely a particular lien and not a general lien.'
16. In my opinion the present is a case of particular lien.
17. The letter of 17th September, 1980, is on the usual printed form which the bank gets signed from the customers in their daily routine business. It is not addressed to the particular transaction of bank guarantee. The words written by the officer of the bank on the reverse of the deposit receipts are specific and explicit. They are the controlling words. They are decisive of this case. They unambiguously tell us what was in the minds of the parties at that time, 'Lien to B.G.'. That is what the bank wanted from the customer. The customer was prepared to give the security of the deposit receipts to the bank in return for their preparedness to stand surety for him. The written word will prevail over the printed word. The written word expresses truly the intention of the parties. That, to my mine, ought to prevail. The letter of September 17, 1980, in the first paragraph says the same thing. The letter has to be read as whole. It has to be read with the words written in hand on the receipts, namely, 'lien to B/G 11/80'. The court has to see the real nature of the transaction. What matter is the substance and not the form.
18. Banker's lien was recognised in common law as part of the Law Merchant. 'When a general usage has been judicially ascertained and recognised, it becomes part of the law merchant, which courts of justice are bound to know and recognize' (Brandao v. Barnett, per Lord Campbell). In India the law is codified. Section 171 of the Indian Contract Act deals with the banker's lien. It says that the general lien is subject to a contract to the contrary. I find here a special contract, contrary to the general lien claimed by the bank.
19. Applying these principles to this case it appears to me that the bank cannot claim a general right of retainer on the amount of Rs. 90,000. The letter of September 17, 1980 though worded in wide terms has to be read with the deposit receipt which expressly mention that the deposit receipts are securities for guarantee No. 11/80. The bank cannot apply this money to satisfy the balance on the overdraft account that may be due from the customer. It cannot claim the right to set off the sum of Rs. 90,000 and interest against Rs. 1,17,365.95. The reason is that there is an express contract between the bank and the customer that the bank shall have a lien on the deposit receipts against the bank guarantee. If the bank guarantee is discharged, as has happened in this case, the customer can say to the bank : 'you return my FDRs which I deposited with you against the transaction of guarantee'. The bank will have no answer. The attendant circumstances show that there was an express contract inconsistent with the general lien. So I must hold that the amount of Rs. 90,000 belongs to the judgment-debtors and can be attached by the decree-holder in execution of his decree against them. So the bank loses the battle. The judgment-creditor wins.
20. For these reasons I dismiss the objections and order the bank to deposit the amount of Rs. 35,000 in this court in a week's time.