Bank can set hold account
narenbhai h.hora
(Querist) 05 June 2014
This query is : Resolved
in our bank a costumer have account of saving and two account of agricultural loan, in one agricultural loan account costumer has paid total loan amount and bank has issued no due certificate in name of costumer, then after costumer has release charge from revenue record from his all land, then after bank has came knowledge that costumer has not paid second loan amount so bank issued notice and set hold the saving account. bank can set his due amount from saving account ? and what other procedure bank can do ?
Kumar Doab
(Expert) 05 June 2014
Author : narenbhai h.hora
Similar Query by author: kishorbhaihora is at:
http://www.lawyersclubindia.com/experts/Set-hold-account-by-bank-476186.asp#.U5BG-3LWIqF
v. Lien
Banks have a right to exercise lien under section 171 of the Indian Contract Act against the dues from constituents/customers. However, the banks cannot exercise lien over the personal account of a customer on the ground that money was due to the bank in another account where he acts in a different capacity, if there is no agreement to that effect.
xi. Limitation
A bank may exercise lien under section 171 of Contract Act even where the debt is barred by limitation.
A consumer can initiate proceeding against a banker for non-release of securities even after the expiry of the period of limitation. This is based on the principle that the banker holds any goods as security from a customer as trustee and the security is not intended to be transferred to him, nor can he acquire any title to it, except on the basis of legal proceedings.
http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=171
Rajendra K Goyal
(Expert) 05 June 2014
Bank can exercise write of general lien and set off for its dues.
