Guru Nathan (Managing Director) 15 February 2014

Dispute on lien

Hello,

we had a business association with an organization and had a lien with

a Bank. the bank and the organization (our contract party) are sister concerns. the lien on our fixed deposit was a caution deposit. we closed our business two years back and received a letter saying that we would get our deposit back after a period of six months. after one a half years since we received this letter, we approached the bank to redeem our funds. we are said we have pending dues and we need to get NOC from our former business partner. We are not able to get any proper communication from our former business partner. In this situation, we have escalated the issue to Head quality services, but we receive a communication that our funds are in lien as on date. But, we signed for 3 years and extended it for another 3 years and the lien is not valid as on date, as we understand.

We believe the banker plays a role of trustee in this regard and its banker's responsibility to resolve the dispute, or even excercise the lien if needed.

We would like to know, if the banker is responsible to provide us information that proves the lien is valid as on date. is that correct? should we ask for such clarifications before filing a complaint with an ombudsman?

a guidance is much appreciated

thanks in advance

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5 Replies

T. Kalaiselvan, Advocate (Advocate) 16 February 2014

Yes, you can approach the bankers seeking clarifications on the subject and if not satisfied, you may approach the Banking Ombudsman with your grievances for a proper redress.

S K KARNjhc (Legal Adviser) 17 February 2014

Mr Salvadi sir, It is good in your case to have approached Banking Ombudsman within time b/r being watered on your lien

MANOJ GUPTA (MANAGER) 12 March 2014

One of my friend in a psu bank has been chargesheeted for misappropriation of funds and presently Disciplinary action is going on.

He also had a Savings Account as well as some FDs in another bank.

The employer bank has put a lien on all his accounts as well as written letter to the other bank to put lien on his account.

The other banks (without any court order / Garnishee order) , based on letter from the employer bank set lien on his savings account as well as fixed Deposit.

As per my limited knowledge of banking law, the bankers' right to lien does not apply in case of matter pertaining to any other bank, unless there is a specific order from court or any other authority like income tax attachment order / sale tax / excise etc. But In this case there is no such order.

Therefore the action putting lien by another bank (based on letter from employer bank) may not be legally tenable.

Experts please confirm or deny this. Please also enlighten the relevant section of the particular banking law which would apply here.