ICICI BANK Vs Manjeet Kaur (Delhi State Consumer Disputes Redressal Commission)
Whether the bank may exercise and invoke the banker’s Rights of Lien as per Section 171 of the Indian Contract Act, 1872 to settle the dues from the deceased person in case the deceased person has taken a loan?
The answer is negative as per the judgment of ICICI BANK Versus Manjeet Kaur decided dated 16.03.2022 by the Delhi State Commission. As per the RBI circular dated 09.06.2005 and 01.07.2011, the bank cannot make the adjustment in the bank account of the deceased person without the prior permission of the nominee or the legal heirs and the claim should have been settled within 15 days, after the intimation of the death of the account holder. As far as the right to the lien is concerned under Section 171 of the Indian Contract Act 1872, the bank shall file a civil suit for the recovery of the respective unpaid loan amount.
Section 171 of the Indian Contract Act is reproduced hereinbelow: –
171 General lien of bankers, factors, wharfingers, attorneys and policy brokers- Bankers, factors, wharfringers, attorney of a High Court and policy brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them, but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect.
The selective part of the RBI circular dated 09.06.2005 is reproduced hereinbelow Verbatim:-
‘Settlement of claims in respect of deceased depositors’
