IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT:

THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU

TUESDAY, THE 8TH DAY OF MARCH 2016/18TH PHALGUNA, 1937

WP(C).No. 2527 of 2015 (M)

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PETITIONER:
--------------

LONANKUTTY ANTONY @ T.L.ANTONY, AGED 58 YEARS,

S/O LATE LONANKUTTY, THYPARAMBIL HOUSE,
EDAVANAKKAD P.O., ERNAKULAM DISRICT, PIN-682 502

BY ADVS.SRI.C.ANILKUMAR (KALLESSERIL)
SRI.C.Y.VINOD KUMAR

RESPONDENT(S):
------------------

1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES,

ERNAKULAM (GENERAL), CIVIL STATION , B2 BLOCK
5TH FLOOR, KAKKANADU, PIN-682 030.

2. THE ASSITANT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERL),

FORT KOCHI, ERNAKULAM DISTRICT, PIN-682 001

3. THE EDAVANAKAD SERVICE CO-OPERATIVE BANK LTD NO.1,

REPRESENTED BY ITS SECRETARTY
EDAVANAKAD P.O., PIN-682 502

4. THE PRESEIDENT,
THE EDAVANAKAD SERVICE CO-OPERATIVE BANK LTD NO.1,
EDAVANAKAD P.O., PIN-682 502.

5. STATE OF KERALA, REPRESENTED BY ITS SECRETARY,

CO-OPERATIVE DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM, PIN-695 001.

R3&4 BY ADV. SRI.P.P.JACOB

R2 BY ADV. SRI. T.R. RAJESH, GOVERNMENT PLEADER

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON

08-03-2016, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
 WP(C).No. 2527 of 2015 (M)
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APPENDIX

PETITIONER'S EXHIBITS :

EXHIBIT P1: THE PHOTOCOPY OF THE RELEVANT PAGE OF THE PASS BOOK OF
THE LOAN ACCOUNT NO.2579/14 K OF THE PETITIONER.

EXHIBIT P2: THE PHOTOCOPY OF THE LETTER DATED 30.09.2014 ISSUED BY THE
ASSISTANT SECRETARY OF THE 3RD RESPONDENT BANK.

EXHIBIT P3: THE PHOTO COPY OF THE PETITION DATED 18.10.2014 SUBMITTED
BY THE PETITIONER BEFORE THE 1ST RESPONDENT.
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EXHIBIT P4: THE PHOTOCOPY OF THE LETTER NO.V.1132/14, DATED 2.12.2014

OF THE 2ND RESPONDENT.

EXHIBIT P5:THE PHOTOCOPY OF THE ORDER DATED 2.12.2014 ISSUED BY THE

2ND RESPONDENT TO THE 3RD RESPONDENT.

EXHIBIT P6: THE PHOTOCOPY OF THE PETITION DATED 1.1.2015 BEFORE THE
1ST RESPONDENT.

EXHIBIT P7: THE PHOTOCOPY OF THE POSTAL ACKNOWLEDGMENT CARD FOR

THE RECEIPT OF EXHIBIT P6 BY THE 1ST RESPONDENT.

EXHIBIT P8: THE PHOTOCOPY OF THE POSTAL ACKNOWLEDGMENT CARD FOR

THE RECEIPT OF EXHIBIT P6 BY THE 3RD RESPONDENT.

EXHIBIT P9: ENCUMBRANCE CERTIFICATE NO,3114/2014 DATED, 5.4.2014

ISSUED FROM S.R.O., KUZHUPPILLY.

RESPONDENTS' EXHIBITS:
------------------------------

EXT.R3(a): TRUE PHOTOCOPY OF THE RELEVANT PAGES OF THE RATION CARD

BEARING NO. 1735012718 ALONG WITH ENGLISH TRANSLATION.

EXT.R3(b): TRUE PHOTOCOPY OF THE SUBMISSION BY PREETHI BEFORE THE

SECRETARY ALONG WITH ENGLISH TRANSLATION.

EXT.R3(c): TRUE PHOTOCOPY OF THE PETITION SUBMITTED BY MERCY ANTONY

DATED 28.09.2014 ALONG WITH ENGLISH TRANSLATION.

EXT.R3(d): TRUE PHOTOCOPY OF THE PETITION RECEIVED FROM LEENA O.K.

DATED 27.09.2014 ALONG WITH ENGLISH TRANSLATION.

EXT.R3(e): TRUE PHOTOCOPY OF THE RESOLUTION NO.IX DATED 11.12.2014

ALONG WITH ENGLISH TRANSLATION.

EXT.R3(f): TRUE PHOTOCOPY OF THE COVERING LETTER DATED 24.12.2014

ALONG WITH ENGLISH TRANSLATION.

EXT.R3(g): TRUE PHOTOCOPY OF THE ORDER DATED 14.01.2015 ALONG WITH

ENGLISH TRANSLATION.

/True Copy/
P.A to Judge.
rv
 DAMA SESHADRI NAIDU, J.
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W.P. (C) No. 2527 of 2015 (M)
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Dated this the 8th day of March, 2016.
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JUDGMENT

The petitioner, a member of the third respondent Co-operative

Bank, availed himself of a loan after mortgaging a piece of property

and later cleared it. When he sought the return of the title deeds of

the property after clearing the loan, the respondent Bank refused.

The refusal seems to be on the premise that the petitioner's wife also

secured a loan, and the petitioner's title deeds are deemed to have

been kept as security for the realisation of the said debt, too. In other

words, the third respondent Bank has exercised its general lien.

Aggrieved, the petitioner has filed the present writ petition.

2. The learned counsel for the petitioner has submitted that the

petitioner has nothing to do with the loan obtained by his wife. He

has further submitted that the petitioner is not a guarantor to the

loan. Nor has he offered his property as security.

3. The learned counsel for the respondent Bank has, on the

other hand, strenuously contended that the petitioner has all along
 W.P.(C.) No. 2527/2015 -2-

known about the loan obtained by his wife. He has, in fact, contended

that it is the petitioner that is instrumental in his wife's securing the

loan.
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4. In elaboration of his submissions, the learned counsel has

also contended that the Bank has bona fide believed that the

husband's property could be used for securing his wife's loan.

5. The learned counsel has also drawn my attention to Ext.R3(g)

issued by the Assistant Registrar allowing the respondent Bank to

retain the petitioner's title deeds until his wife's loan is cleared.

6. Heard the learned counsel for the petitioner and the learned

counsel for the respondent Bank, apart from perusing the record.

7. To a specific query whether the petitioner and his wife are

living together, the learned counsel for the petitioner did submit that

they had been living together, though he added apologetically that

they had a strained relationship. I must acknowledge that the answer

to my question, either way, has no impact on the issue.

8. To begin with, this Court is aware that it cannot indulge in

any moral adjudication. The liability of the party, be it husband or

wife, is required to be determined strictly in statutory terms—in terms

 W.P.(C.) No. 2527/2015 -3-

of either the contract they have entered into or the law governing the

issue.

9. In the first place, the learned counsel for the respondent

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Bank could not bring to the notice of this Court any provision under

which the Assistant Registrar issued Ext.R3(g) allowing the respondent

Bank to retain the petitioner's documents for the loan contracted by

his wife. It is indeed an extra-legal order with no enforceability. And

it is required to be ignored as devoid of any force. It is thus

disregarded.

Securities-Lien:

10. In Transcore v. Union of India 1, the Apex Court has

delineated on the securities that could be offered. Broadly, there are

three types of security over an asset. First is where the creditor

obtains an interest in the asset concerned (mortgage). Second is the

security in which the rights of the creditor depend on possession of

the asset (pledge/lien). The third is the charge where the creditor gets

neither ownership nor possession of the asset, but the asset is

appropriated to satisfy the debt or obligation in question. The

dichotomy, which is important, is that more than one obligation could

1
(2008) 1 SCC 125,
 W.P.(C.) No. 2527/2015 -4-

arise from the same transaction, namely, to repay the debt or to

discharge other obligation.

11. Focusing on the contractual concept of the term, we may

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examine ‘lien’. Black’s Law Dictionary2 defines lien as a legal right or

interest that a creditor has in another's property, usually lasting until

a debt or duty it secures is satisfied. Typically, the creditor does not

take possession of the property on which the lien has been obtained.

Of the banker’s lien, the same lexicon defines it to be the right of a

bank to satisfy a customer's matured debt by seizing the customer's

money or property in the bank's possession.

12. In West’s Encyclopedia of American Law3 lien is defined as a

right given to another by the owner of property to secure a debt, or

one created by law in favour of certain creditors. A lien is an

encumbrance on one person’s property to secure a debt the property

owner owes to another person. The statement that someone’s

property is “tied up” describes the effect of lien on both real and

personal property. Lien is a French word meaning “knot or binding”

that was brought to Britain during the Norman Conquest in 1066.

2
9th Ed.
3
2nd Ed. Vol.6, P.315
 W.P.(C.) No. 2527/2015 -5-

13. The Hon’ble Supreme Court in Syndicate Bank v. Vijay

Kumar4 has examined the numerous definitional dynamics of the

expression ‘the Banker’s Lien.’ In Halsbury’s Laws of England 5, the

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lien is defined to mean a right in one man to retain that which is in his

possession belonging to another until certain demands of the person

in possession are satisfied. As per this primary sense, it is given by

law and not by contract. A banker’s lien on negotiable securities,

according to Chalmers on Bills of Exchange6, is ‘an implied pledge’. A

banker has, in the absence of an agreement to the contrary, a lien on

all bills received from a customer in the ordinary course of banking

business regarding any balance that may be due from such customer.

14. In Paget’s Law of Banking 7, it is observed that 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. In Chitty on Contract8, the Banker’s lien is explained as

under:

4
(1992) 2 SCC 330
5
2nd Edn., Vol. 20, p. 552, para 695,
6
13th Edn., p. 91
7
8th Edn., p. 498
8
26th Edn., p. 389, para 3032
 W.P.(C.) No. 2527/2015 -6-

“Extent of lien.— 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 does
not extent to valuables lodged for the purpose of safe custody and may
in any event be displaced by either an express contract or
circumstances which show an implied agreement inconsistent with the
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lien …. The lien is applicable to negotiable instruments which are …

remitted to the banker from the customer for the purpose of collection.
When collection has been made the proceeds may be used by the
banker in reduction of the customer’s debit balance unless otherwise
earmarked.”

(emphasis original as in Vijaya Kumar)

15. Putting the issue in perspective, we may say that a lien is the

creditor’s right to retain the debtor’s asset, movable or immovable,

until the debt is repaid. If the asset is retained till the debt for which

the asset is offered as security is repaid, it is a particular lien. On the

other hand, if the asset is retained till any other unconnected debt is

repaid, it is a general lien. As the general lien is mostly exercised by

the bankers, it is also called the banker’s lien. With either a particular

lien or a general one, there shall be no contract, express or implied,

to the contrary. Even with general lien, the owner of the asset has to

be contractually connected to the debt in the capacity of either a

borrower or a guarantor.

16. In fact, Section 171 of the Indian Contract Act gives statutory
 W.P.(C.) No. 2527/2015 -7-

shape to the general lien of bankers, factors, etc. The provision reads

to the effect that bankers, factors, wharfingers, attorneys of a High

Court and policy-brokers may, in the absence of a contract to the

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contrary, retain as security for a general balance of account, any

goods bailed to them. But no other persons have a right to retain, as

security for such balance, goods bailed to them, unless there is an

express contract to that effect. It serves well to remember, however,

that lien in service jurisprudence differs from that under the contract

act or even common law.

17. As is well known, a statute of limitation bars or runs against

the remedy, but does not discharge the debt or extinguish or impair

the right, obligation, or cause of action. Keeping this in view, let us

proceed further.

18. In Anson's Law of Contract 9, it is opined that at Common

Law lapse of time does not affect contractual rights. Such a right is of

a permanent and indestructible character, unless either from the

nature of the contract or from its terms, it be limited in point of

duration. According to the Anson’s, though the contractual right is of

permanent character, the remedies arising from its violation are

9
19th Edn. p. 383, as quoted in Bombay Dyeing & Mfg. Co. Ltd. v. State of Bombay
 W.P.(C.) No. 2527/2015 -8-

withdrawn after a certain lapse of time. The remedies are barred,

though the right is not extinguished.

19. Quoting the above, in Bombay Dyeing & Mfg. Co. Ltd. v.
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State of Bombay10, a Constitution Bench of the Apex Court has held

that when a creditor has a lien over goods by way of security for a

loan, he can enforce the lien for satisfying the debt, even though an

action thereon would be time barred.

20. There is, in this case, no privity of contract; nor any legal

obligation even by implication, however.

Coverture:

21. The archaic and now obsolete common law concept of

spousal unity is a matter of coverture. Black’s Law Dictionary defines

coverture as the condition of being a married woman. Under common

law, a woman under coverture could sue only through the personality

of her husband. The lexicon further amplifies thus:

"Coverture, is a French word signifying any thing that covereth, as

apparell, a coverlet . . . . It is particularly applied in our common lawe,
to the estate and condition of a married woman, who by the lawes of
our realme, is in (potestate viri) and therefore disabled to contract with
any, to the preiudice of her selfe or her husband, without his consent
and privity; or at the least, without his allowance and confirmation."
John Cowell, The Interpreter (1607).

10
1958 SCR 1122
 W.P.(C.) No. 2527/2015 -9-

"Coverture is by law applied to the state and condition of a married

woman, who is sub potestati viri, (under the power of her husband) and
therefore unable to contract with any to the damage of herself or
husband, without his consent and privity, or his allowance and
confirmation thereof. When a woman is married, she is called a Femme
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couvert, and whatever is done concerning her during marriage is said to

be done during coverture." The Pocket Lawyer and Family Conveyancer
96 (3d ed. 1833)

22. To rid the phrases of their French flavour, we may

say femme sole is a single woman, and femme covert, literally, a

covered woman. In Chapter XV of the Commentaries on the Laws of

England11, William Blackstone explains the concept of coverture. The

legendary legal commentator describes the legal consequences of

making and dissolving a marriage by observing thus:

“By marriage, the husband and wife are one person in law: that is, the
very being or legal existence of the woman is suspended during the
marriage, or at least is incorporated and consolidated into that of the
husband: under whose wing, protection, and cover, she performs every
thing; and is therefore called in our law-French a feme-covert; is said to
be covert-baron, or under the protection and influence of her husband,
her baron, or lord; and her condition during her marriage is called her
coverture. Upon this principle, of a union of person in husband and
wife, depend almost all the legal rights, duties, and disabilities, that
either of them acquire by the marriage. I speak not at present of the
rights of property, but of such as are merely personal. For this reason, a
man cannot grant any thing to his wife, or enter into covenant with her:
for the grant would be to suppose her separate existence; and to
covenant with her, would be only to covenant with himself: and
therefore it is also generally true, that all compacts made between
11
At P.722 of iBooks
 W.P.(C.) No. 2527/2015 -10-

husband and wife, when single, are voided by the intermarriage.”

23. Under the English Common Law, wife and husband are

regarded as one person and are presumed to have but one will.
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Courts have gone to the extent of saying that they cannot be accused

of conspiracy for one person cannot conspire with oneself. This

common law concept has, however, largely confined to testimonial

privileges. It is based on the premise that once wife and husband are

treated as but one, one testifying against another, as a matter of legal

fiction, amounts to self-incrimination. On the converse, one testifying

for another is nothing but a reaffirmation of one’s own testimony: it

cannot even be corroborative—just repetitive. Undeniably there are

myriad exceptions to this rule. Indian Law has, however, refused to

recognise this spousal immunity of biblical origin. Section 120 of the

Evidence Act makes it clear.

24. Further, at page 725 of Commentaries on the Laws of

England, Blackstone observes that in the civil law, the husband and

wife are regarded as two distinct persons; and may have separate

estates, contracts, debts, and injuries. And the learned author thus

concludes that a woman may sue and be sued without her husband.
 W.P.(C.) No. 2527/2015 -11-

25. At any rate, in the first place, the coverture covers, rather

subsumes the proprietary rights of a wife under those of her husband.

The converse cannot be said. Second, in India, from either

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perspective, wife and husband are two independent legal entities

capable of contracting on their own. One does not bind the other,

especially by implication, vis-à-vis a transaction involving a third

party. In India, law has been consistent when dealing with the

property rights of, or contracts involving, either of the spouses. The

law equates the wife with the husband; it puts them on the same

pedestal. Both of them can independently acquire and hold the

property in their own names. One can, therefore, contract with third

persons independently of the other.

26. In conclusion it may be held that the question of the

husband’s implicitly incurring a liability on the contract entered into

by his wife with a third party, in the absence the husband’s express or

implied consent thereto, does not arise. Had it been a case of contract

between wife and husband, given the statutory obligation of spousal

maintenance, the parameters, of course, would have differed.

27. Veering back to the facts of the case, I may observe that
 W.P.(C.) No. 2527/2015 -12-

evidently the wife contracted, as the record reveals, the loan having

provided the sureties, who do not include her husband. The husband,

in fact, contracted the loan subsequently. In my considered view, the

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Bank's plea that it bona fide believed that the petitioner could offer

his property as security is to be discounted. For by the time the wife

took the loan, the husband was not at all in the picture—his loan was

subservient.

28. Unless a person is a party to a loan transaction in whichever

capacity, the question of the Bank’s exercising the general lien vis-à-

vis the property of that person—even if he or she were the spouse of

the contracting party—does not arise. Put differently, it falls foul of

the contractual obligations of the banker and customer.

29. In these circumstances, I am of the considered view that the

respondent Bank's action of retaining or withholding the petitioner's

title deeds even after his clearing the loan is per se illegal and

arbitrary.

30. In the facts and circumstances, the Court allows the writ

petition directing the respondent Bank to return to the petitioner the

title deeds of the property, which he had earlier mortgaged for a loan.
 W.P.(C.) No. 2527/2015 -13-

The debt admittedly stood discharged in due course.

31. Needless to observe that the respondent Bank should

execute and register the ‘gehan deed’, as expeditiously as possible, at

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any rate, within one month from the date of receipt of a copy of this

judgment.

32. If the officials of the Bank have lent the money to the

petitioner's wife without ensuring sufficient security for its repayment,

it is open for either the Management of the Bank or the Department to

enquire into the issue and take remedial steps, which includes

initiation of disciplinary proceedings against the negligent or

conniving officials.

33. In the manner stated above, the writ petition is disposed of.

No order as to costs.

sd/- DAMA SESHADRI NAIDU, JUDGE.

rv
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W.P.(C.) No. 2527/2015

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