Law:

Section:

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)------- --------Ss. 9 & 22-------Contract Act (IX of 1872), S. 171-------Suit for recovery of money-------Lien without contract-------Scope-------Suit was filed by borrower assailing lien marked by Bank over amount lying in the account-------Banking Court decreed the suit in favour of borrower and against the Bank-------Validity-------Lien was a right in one man to retain that which was in his possession but belonged to another person, till certain demands of the person in possession were satisfied-------Under the provisions of S.171 of Contract Act, 1872, a Banker, amongst others named therein, in absence of a contract to the contrary, had a right to retain as security for a general balance of account goods bailed to him-------Bank retained subject margin amount under lien to secure partially outstanding liability till such time either the original guarantees were returned or a no claim/discharge certificate in lieu thereof was provided to Bank for reversal of liability outstanding thereagainst-------Banking Court while passing and decree failed to recognize self-same right of Bank under S.171 of Contract Act, 1872, and committed an error of law-------High Court set aside and decree passed by Banking Court and dismissed the suit filed by borrower-------Appeal was allowed in circumstances. Shiam Lal J. Dewan v. Official Liquidators of the U.P. Oil Mills Co. Ltd. AIR 1933 Allahabad 789; R.G.N. Price, Official Liquidator, Andhra Paper Mills Company, Limited (in liquidation), v. The Sate of Madras AIR (39) 1952 Madras 58; Discount Bank of India Ltd., Delhi v. Triloki Nath and others AIR 1953 Punjab 145; Ch. Habibullah v. Sheikhupura Central Co-operative Bank Limited PLD 1987 SC 53; Messrs Continental Syndicate of Trade v. Lloyds Bank Ltd. PLD 1966 (W.P.) Kar. 556; Firm Jai Kishan Dass Jinda Ram and others v. Central Bank of India Ltd. AIR 1955 Punjab 250; Muhammad Saleemullah Khan v. National Construction Company (Pak.) Ltd. through Managing Director and another PLD 1999 Lah. 456 and Farooq v. Messrs Eastern Banking Corporation Ltd., Karachi and another PLD 1980 Kar. 115 ref. THIS JUDGMENT…

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