Canara Bank, Represented by Its Senior Manager, Narayanaguda, Hyderabad and Others Vs. M/S. Taraka Prabhu Publishers Pvt. Ltd., and Others - Court Judgment

Excerpt:
banking - recovery of debt - section 49 and order 8 rule 6 of code of civil procedure, 1908 and section 171 of contract act, 1872 - customer failing to discharge loan taken from bank - whether bank have right to claim set-off of amounts deposited in current account by transferring them to loan account in order to realise loans advanced - matter falls within domain of law of contract and right of set-off claimed by bank - right cannot be denied on pretext that transfer of amount to current account will result in negation of activities of customer. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. - 2. when the matter came up for consideration before us it was deemed fit and proper to direct that the writ appeal as well as writ petition no. loan fromthe respondents which they have failed to discharge and under the terms of the loan the respondent banks are trying to enforce their contractual rights against the petitioners. in the instant case the petitioners have borrowed loan from the bank which they have failed to repay and consequent upon which the bank is trying to exercise the right of set off in terms of the contractual obligations assumed by the petitioners by transferring the amounts deposited by them in the current account to the loan account. the correct way to look at the controversy arising in this case is not as to whether the petitioners have given up their fundamental rights available to them under the constitution by entering into a contract with the respondent banks but to see whether the respondent banks have right to claim set off of the amounts deposited in the current account by transferring them to the loan account in order to realise the loans advanced to the petitioners which they have failed to discharge.ordersardar ali khan, j.1. canara bank, represented by its senior manager, narayanaguda, hyderabad, has filed writ appeal no. 682/90 against the order dated 16-5-1990 made in w. p. m. p. no. 8409/90 in w.p. no. 6601/90 granting an interim direction against the appellant bank thereby restraining it from transferring any amount deposited by the petitioner-company in its current account to the loan account and to allow the petitioner-company to operate the current account.2. when the matter came up for consideration before us it was deemed fit and proper to direct that the writ appeal as well as writ petition no. 6601 of 1990 may be posted for final hearing together so that the matter may be decided once and for all. therefore, this judgment is being passed after the combined hearing of writ appeal no. 682/90 and writ petition no. 6601/90.3. it would be appropriate to refer to the affidavit filed in support of the writ petition for narration of essential facts of the case.4. m/s. taraka prabhu publishers (pvt.) limited is a private limited company incorporated under the provisions of the companies act, 1956. the andhra pradesh industrial development corporation has contributed to the share capital of the 1st petitioner and extended term loans to it. the object of the company is to publish udayam telugu daily newspaper. the 1st petitioner is also printing and publishing udayam family weekly, sivaranjani cine weekly. petitioners 2, 3 and 4 are connected with the running ofthe business of the company and they assist the company in the publication of the newspaper, weeklies etc., referred to above. respondents 1 and 2 are canara bank and andhra bank respectively, which are nationalised banks and come within the meaning of 'state' under art. 12 of the constitution of india. in order to run its business the 1st petitioner-company had obtaiecd term loans and working capital loans etc., from respondents i and 2. it is alleged that there was inordinate delay in the sanctioning of the loan by respondents 1 and 2 and that the petitioners were put to great hardship for purchase of news prints and in the running of its business. as a result of the inevitable economic circumstances the unit became a loss-making-unit and was unable to discharge its liabilities to the respondents. with a view to tide over the financial crisis. the management of the 1st petitioner-company decided to involve a financially stable business group in the management of the unit so that it could provide the necessary facilities to make the unit self-sufficient and stable. with this view they requested m/ s. balaji group of companies to take over the management of the unit. m/s. balaji group of companies came to the conclusion that the unit should be taken over in spite of its commercial non-viability to protect the newspaper dailies, weeklies etc., which are catering to the needs of the members of the public. in conjunction with the balaji group of companies, the 1st petitioner has, therefore, hammered out a recovery proposal and submitted the same to the respondents, vide their letter dated 16-2-1990. the proposals made by the 1st petitioner-company were discussed between the concerned parties and the 1st petitioner-company was hopeful of an avoidable decision from the respondents to rehabilitate the unit.5. however, the 1st respondent canara bank got a legal notice dated 18-3-1990 issued to the 1 st petitioner-company and filed a suit in o.s. 470/1990 on the file of the v additional judge, city civil court, hyderabad, for recovery of rs. 1,39,53,650-18 ps. towards the amounts alleged to be due from the 1st petitioner-company under variousloan accounts. the contention raised on behalf of the 1st petitioner-company is that there is no reason whatsoever for the respondent bank to reject the proposal put forward in their letter dated 16-2-1990 which are thoroughly in accordance with the guidelines issued by the reserve bank of india. it is also alleged that in some other cases proposals of a similar nature have been accepted and therefore the respondents were not justified in taking a precipitate action initiated by them.6. the 1st petitioner-company is having a current account in the 1st respondent canara bank. after filing the suit on 24-4-1990 without notice, the 1st respondent bank transferred a sum of rs. 80,693-32 ps.-stand-ing to the credit of the 1st petitioner in its current account to the loan account thereby reducing the balance in the current account of the 1st petitioner-company to nil. the 1st petitioner-company contacted the branch manager of the 1st respondent bank, viz., canara bank and was informed that while the current account is not closed, any cheques and drafts deposited by the 1st petitioner-company would be received by the 1st respondent bank and transferred to the loan account. in the normal business of the 1st petitioner-company it receives the payments for sale of daily newspapers and weekly magazines by way of demand drafts and cheques. the 1st petitioner-company has to necessarily deposit the said demand drafts and cheques in the current account. if such deposits are transferred by the respondents to its loan account, the unit of the 1st petitioner-company will come to a standstill and the 1st petitioner-company will not be able to purchase any newsprints and other consumables apart from effecting payments to its employees numbering about two thousand and meeting other commitments, such as payment of electricity and water charges etc. in other words, the 1st petitioner-company will not be able to carry on the printing of udayarn daily newspaper and the two weeklies if there is no amount left in the current account. it is this action of the banks in transferring the amounts belonging to the 1st petitioner-company from its current account to its loanaccount which is challenged as being violative of fundamental rights guaranteed under art. 19(1)(a) of the constitution of india. it is also alleged that the said action violates the fundamental rights guaranteed under arts. 14 and 21 of the constitution of india as it results in the closure of the business run by the 1st petitioner-company. therefore, the petitioners pray that an appropriate writ may be issued declaring the action of the 1st respondent in transferring the moneys deposited by the 1st petitioner-company in its current account no. 1155 to its loan account and the action of the respondents in initiating recovery proceedings during the pendency of the rehabilitation proceedings as arbitrary, unreasonable and unjust as the same violates the fundamental rights of the petitioners guaranteed under arts. 14, 19(1)(a), 19(1)(g) and 21 of the constitution of india.7. when the matter was heard by a learned single judge, he granted an interim direction to which a reference has already been made in the opening remarks of this judgment. since the matter in the writ appeal is interlinked with the prayer in the main writ petition, we decided to hear the writ appeal and the writ petition together to dispose of the same by a common judgment.8. the main contention raised by the learned counsel appearing on behalf of the respondents is that the matter arising between the parties is purely of a contractual nature and, therefore, no writ petition can be entertained for the redressal of the grievances of the petitioner. it is further contended that no legal or constitutional right of the petitioners has been infringed by the action of the 1st respondent in transferring the amount deposited by the 1st petitioner in its current account to its loan account for set off. it is also contended that the relationship between the 1st petitioner and the respondent bank is that of a debtor and a creditor and the rights and obligations are governed by the contract executed between them and that no writ can lie against the respondents to prevent them from realising the debt due to them from the 1st petitioner. moreover, it is also to be seen that the 1st respondent canara bank hasalready filed asuit o.s. 470/1990 on the file of the v additional judge, city civil court, hyderabad, for recovery of rs. 1,39,53,650-18 being the outstanding liability due as on 24-4-1990 and an application for appointment of a commissioner for taking inventory of the hypothecated property etc., and another application for attachment before judgment of the property of the 2nd petitioner have also been filed. sri e. manohar, learned counsel appearing on behalf of the respondents has also contended that the bankers in the circumstances have an unquestionable right to retain credit balance against the debt due from the customer which authorises them to set off one debt against another.9. in roxburghe v. cox, (1881) 17 ch d 520, the court of appeal has taken the view that even if it is taken for granted that the bankers lien applied to money paid into the account of the creditor, still the proper doctrine to be applied in such cases is the doctrine of set off under which the bank is authorised to claim an amount for the set off of the debts owed by the customer. the above view taken by the court of appeal has been affirmed in another case re morris, coneys v. morris, (1922) 1 ir 81, where a similar view has been taken that set off can be claimed by the bankers for the money which is owed to them by retaining the money belonging to the debtor in a particular account. inhalesowen presswork and assemblies ltd. v. westminster bank ltd., (1970) 3 wlr 625, lord denning, m.r. took the view that the banker's hen is no true hen and suggested that in order to avoid confusion, the use of the word should be discarded and thai one should speak simply of a banker's right to combine or so set off. the above view has been affirmed in national westminster bank ltd. v. halesowen presswork and assemblies ltd., (1972) 1 all er 641, by the house of lords in which the principle of set off has been upheld in connection with the bankers' right to realise their debits from a particular debtor, whose money was received by the bankers in the course of business as such. in this case it is beyond any doubt that the petitioners herein have obtained a.loan fromthe respondents which they have failed to discharge and under the terms of the loan the respondent banks are trying to enforce their contractual rights against the petitioners.'''in such a situation the right of set off can-be exercised by the respondent banks.10. sri s. venkata reddy, learned counsel appearing for the petitioners, has placed reliance on olga tellis v. bombay municipal corporation, : air1986sc180 and contended that the action of the 1st respondent bank in transferring the amount deposited by the 1st petitioner in its current account to its loan account for set off is in flagrant violation of the fundamental rights of the petitioners guaranteed to them under art. 19(1)(a) of the constitution of india, as also it affects fhe fundamental rights of the petitioners under art. 21 of the constitution of india. the principle decided in the above said case by the supreme court is that there can be no estopped against the constitution which is the paramount law of the land and the source and sustenance of all laws. it was further held that there can be no waiver of fundamental rights and that no individual can barter away the freedoms conferred upon him by the constitution. in the above said decision the supreme court was considering the effect of an undertaking given before the high court . by the petitioners, who were the hut and pavement dwellers to the effect that they did not claim any fundamental right to put up huts on pavements or public roads and will not obstruct the demolition of the huts after certain date. it must be stated that it is beyond any shadow of doubt that the petitioners cannot draw any sustenance from the ratio of the above decision in so far as the present case is concerned. in the instant case the petitioners have borrowed loan from the bank which they have failed to repay and consequent upon which the bank is trying to exercise the right of set off in terms of the contractual obligations assumed by the petitioners by transferring the amounts deposited by them in the current account to the loan account. it would be extremely far fetched to say that having borrowed the loans the petitioners' current account cannot be interfered with for the discharge of the loans as itwould result in the deprivation of the rights of the petitioners guaranteed to them under art. 19(1)(a) and art. 21 of the constitution of india as they would be prevented from carrying out their profession. the correct way to look at the controversy arising in this case is not as to whether the petitioners have given up their fundamental rights available to them under the constitution by entering into a contract with the respondent banks but to see whether the respondent banks have right to claim set off of the amounts deposited in the current account by transferring them to the loan account in order to realise the loans advanced to the petitioners which they have failed to discharge. we are of the view that this matter falls within the domain of the law of contract and the right of set off claimed by the banks cannot be denied on the pretext that the transfer of the amounts in the current account will result in the negation of the activities of the petitioners in publishing the newspapers, weeklies etc. in national thermal power corpn. ltd. v. m/s. bhanu construction co. pvt. ltd. hyderabad, : air1989ap140 , the view taken is that in case of encashment of bank guarantee given by the national thermal power corporation ltd..which was challenged as being wrongful or unwarranted, the proper remedy for the petitioner was to approach a civil court and not to invoke the jurisdiction of the high court under article 226 of the constitution of india. it may be mentioned that in that case also the argument advanced was that enforcement of bank guarantee would result in the closure of business of the petitioner-construction company. the division bench took the view that such an argument is not available to the petitioner in a writ petition as it was a matter arising out of a contract and the proper remedy available to the petitioner is to file a suit against the national thermal power corporation limited which was enforcing the bank guarantee against the petitioner. a similar view has been taken in writ appeals nos. 768 and 769 of 1986 dated 6-10-1987 upholding the action initiated by the banks therein for the recovery of the loansfrom the defaulting small scale unit.11. the next case on which square reliance is placed by the learned counsel for the petitioners is dwarkadas marfatia and sons v. board of trustees of the port of bombay, : [1989]2scr751 , wherein it was held that all actions including contractual dealings of the statutory authorities are deemed to be subject to judicial review and if such a statutory authority has not acted in public interest or in a manner which is mala fide or arbitrary, then such proceedings can be interfered with under arts. 32 and 226 of the constitution. the question arising for consideration in this case is whether the respondents in any manner are acting in an illegal or an arbitrary manner or whether the action taken by them is mala fide or for a collateral purpose due to which it can be held that the action of transferring the amounts from the current account to the loan account by the respondent bank is vitiated in the eye of law. we find it extremely difficult to accede to this argument of the learned counsel that enforcement of doctrine of set off for the amounts to be realised by the bank which is also in the ultimate analysis in public interest is an action which is arbitrary or exercise in a mala fide manner. a logical extension of this argument would lead to somewhat astounding principle wherein it would be open for person to wriggle out of their contractual obligation by pleading that their fundamental rights are affected if the terms of the contract are enforced against them. we have no hesitation in rejecting this argument advanced by the learned counsel for the petitioners for the reasons which we have stated about in extenso.12. for all the above reasons, w.p. no. 6601/90 is dismissed. no costs, consequently w. a. no. 682/90 is allowed. no costs.13. petition dismissed.

Judgment:
ORDER

Sardar Ali Khan, J.

1. Canara Bank, represented by its Senior Manager, Narayanaguda, Hyderabad, has filed Writ Appeal No. 682/90 against the order dated 16-5-1990 made in W. P. M. P. No. 8409/90 in W.P. No. 6601/90 granting an interim direction against the appellant Bank thereby restraining it from transferring any amount deposited by the petitioner-company in its current account to the loan account and to allow the petitioner-company to operate the current account.

2. When the matter came up for consideration before us it was deemed fit and proper to direct that the Writ Appeal as well as Writ Petition No. 6601 of 1990 may be posted for final hearing together so that the matter may be decided once and for all. Therefore, this judgment is being passed after the combined hearing of Writ Appeal No. 682/90 and Writ Petition No. 6601/90.

3. It would be appropriate to refer to the affidavit filed in support of the writ petition for narration of essential facts of the case.

4. M/s. Taraka Prabhu Publishers (Pvt.) Limited is a private limited company incorporated under the provisions of the Companies Act, 1956. The Andhra Pradesh Industrial Development Corporation has contributed to the share capital of the 1st petitioner and extended term loans to it. The object of the company is to publish Udayam Telugu daily newspaper. The 1st petitioner is also printing and publishing Udayam family weekly, Sivaranjani Cine Weekly. Petitioners 2, 3 and 4 are connected with the running ofthe business of the company and they assist the company in the publication of the newspaper, weeklies etc., referred to above. Respondents 1 and 2 are Canara Bank and Andhra Bank respectively, which are nationalised Banks and come within the meaning of 'State' under Art. 12 of the Constitution of India. In order to run its business the 1st petitioner-company had obtaiecd term loans and working capital loans etc., from respondents I and 2. It is alleged that there was inordinate delay in the sanctioning of the loan by respondents 1 and 2 and that the petitioners were put to great hardship for purchase of news prints and in the running of its business. As a result of the inevitable economic circumstances the unit became a loss-making-unit and was unable to discharge its liabilities to the respondents. With a view to tide over the financial crisis. The management of the 1st petitioner-company decided to involve a financially stable business group in the management of the unit so that it could provide the necessary facilities to make the unit self-sufficient and stable. With this view they requested M/ s. Balaji Group of Companies to take over the management of the unit. M/s. Balaji Group of Companies came to the conclusion that the unit should be taken over in spite of its commercial non-viability to protect the newspaper dailies, weeklies etc., which are catering to the needs of the members of the public. In conjunction with the Balaji Group of Companies, the 1st petitioner has, therefore, hammered out a recovery proposal and submitted the same to the respondents, vide their letter dated 16-2-1990. The proposals made by the 1st petitioner-company were discussed between the concerned parties and the 1st petitioner-company was hopeful of an avoidable decision from the respondents to rehabilitate the unit.

5. However, the 1st respondent Canara Bank got a legal notice dated 18-3-1990 issued to the 1 st petitioner-company and filed a suit in O.S. 470/1990 on the file of the V Additional Judge, City Civil Court, Hyderabad, for recovery of Rs. 1,39,53,650-18 Ps. towards the amounts alleged to be due from the 1st petitioner-company under variousloan accounts. The contention raised on behalf of the 1st petitioner-company is that there is no reason whatsoever for the respondent Bank to reject the proposal put forward in their letter dated 16-2-1990 which are thoroughly in accordance with the guidelines issued by the Reserve Bank of India. It is also alleged that in some other cases proposals of a similar nature have been accepted and therefore the respondents were not justified in taking a precipitate action initiated by them.

6. The 1st petitioner-company is having a current account in the 1st respondent Canara Bank. After filing the suit on 24-4-1990 without notice, the 1st respondent Bank transferred a sum of Rs. 80,693-32 Ps.-stand-ing to the credit of the 1st petitioner in its current account to the loan account thereby reducing the balance in the current account of the 1st petitioner-company to NIL. The 1st petitioner-company contacted the Branch Manager of the 1st respondent Bank, viz., Canara Bank and was informed that while the current account is not closed, any cheques and drafts deposited by the 1st petitioner-company would be received by the 1st respondent Bank and transferred to the loan account. In the normal business of the 1st petitioner-company it receives the payments for sale of daily newspapers and weekly magazines by way of demand drafts and cheques. The 1st petitioner-company has to necessarily deposit the said Demand Drafts and cheques in the current account. If such deposits are transferred by the respondents to its loan account, the unit of the 1st petitioner-company will come to a standstill and the 1st petitioner-company will not be able to purchase any newsprints and other consumables apart from effecting payments to its employees numbering about two thousand and meeting other commitments, such as payment of electricity and water charges etc. In other words, the 1st petitioner-company will not be able to carry on the printing of Udayarn daily newspaper and the two weeklies if there is no amount left in the current account. It is this action of the Banks in transferring the amounts belonging to the 1st petitioner-company from its current account to its loanaccount which is challenged as being violative of fundamental rights guaranteed under Art. 19(1)(a) of the Constitution of India. It is also alleged that the said action violates the fundamental rights guaranteed under Arts. 14 and 21 of the Constitution of India as it results in the closure of the business run by the 1st petitioner-company. Therefore, the petitioners pray that an appropriate writ may be issued declaring the action of the 1st respondent in transferring the moneys deposited by the 1st petitioner-company in its Current Account No. 1155 to its loan account and the action of the respondents in initiating recovery proceedings during the pendency of the rehabilitation proceedings as arbitrary, unreasonable and unjust as the same violates the fundamental rights of the petitioners guaranteed under Arts. 14, 19(1)(a), 19(1)(g) and 21 of the Constitution of India.

7. When the matter was heard by a learned single Judge, he granted an interim direction to which a reference has already been made in the opening remarks of this judgment. Since the matter in the writ appeal is interlinked with the prayer in the main writ petition, we decided to hear the writ appeal and the writ petition together to dispose of the same by a common judgment.

8. The main contention raised by the learned counsel appearing on behalf of the respondents is that the matter arising between the parties is purely of a contractual nature and, therefore, no writ petition can be entertained for the redressal of the grievances of the petitioner. It is further contended that no legal or constitutional right of the petitioners has been infringed by the action of the 1st respondent in transferring the amount deposited by the 1st petitioner in its current account to its loan account for set off. It is also contended that the relationship between the 1st petitioner and the respondent Bank is that of a debtor and a creditor and the rights and obligations are governed by the contract executed between them and that no writ can lie against the respondents to prevent them from realising the debt due to them from the 1st petitioner. Moreover, it is also to be seen that the 1st respondent Canara Bank hasalready filed asuit O.S. 470/1990 on the file of the V Additional Judge, City Civil Court, Hyderabad, for recovery of Rs. 1,39,53,650-18 being the outstanding liability due as on 24-4-1990 and an application for appointment of a commissioner for taking inventory of the hypothecated property etc., and another application for attachment before judgment of the property of the 2nd petitioner have also been filed. Sri E. Manohar, learned counsel appearing on behalf of the respondents has also contended that the bankers in the circumstances have an unquestionable right to retain credit balance against the debt due from the customer which authorises them to set off one debt against another.

9. In Roxburghe v. Cox, (1881) 17 Ch D 520, the Court of Appeal has taken the view that even if it is taken for granted that the bankers lien applied to money paid into the account of the creditor, still the proper doctrine to be applied in such cases is the doctrine of set off under which the bank is authorised to claim an amount for the set off of the debts owed by the customer. The above view taken by the Court of Appeal has been affirmed in another case Re Morris, Coneys v. Morris, (1922) 1 IR 81, where a similar view has been taken that set off can be claimed by the bankers for the money which is owed to them by retaining the money belonging to the debtor in a particular account. InHalesowen Presswork and Assemblies Ltd. v. Westminster Bank Ltd., (1970) 3 WLR 625, Lord Denning, M.R. took the view that the banker's Hen is no true Hen and suggested that in order to avoid confusion, the use of the word should be discarded and thai one should speak simply of a banker's right to combine or so set off. The above view has been affirmed in National Westminster Bank Ltd. v. Halesowen Presswork and Assemblies Ltd., (1972) 1 All ER 641, by the House of Lords in which the principle of set off has been upheld in connection with the bankers' right to realise their debits from a particular debtor, whose money was received by the bankers in the course of business as such. In this case it is beyond any doubt that the petitioners herein have obtained a.loan fromthe respondents which they have failed to discharge and under the terms of the loan the respondent Banks are trying to enforce their contractual rights against the petitioners.'''In such a situation the right of set off can-be exercised by the respondent Banks.

10. Sri S. Venkata Reddy, learned counsel appearing for the petitioners, has placed reliance on Olga Tellis v. Bombay Municipal Corporation, : AIR1986SC180 and contended that the action of the 1st respondent Bank in transferring the amount deposited by the 1st petitioner in its current account to its loan account for set off is in flagrant violation of the fundamental rights of the petitioners guaranteed to them under Art. 19(1)(a) of the Constitution of India, as also it affects fhe fundamental rights of the petitioners under Art. 21 of the Constitution of India. The principle decided in the above said case by the Supreme Court is that there can be no estopped against the Constitution which is the paramount law of the land and the source and sustenance of all laws. It was further held that there can be no waiver of fundamental rights and that no individual can barter away the freedoms conferred upon him by the Constitution. In the above said decision the Supreme Court was considering the effect of an undertaking given before the High Court . by the petitioners, who were the hut and pavement dwellers to the effect that they did not claim any fundamental right to put up huts on pavements or public roads and will not obstruct the demolition of the huts after certain date. It must be stated that it is beyond any shadow of doubt that the petitioners cannot draw any sustenance from the ratio of the above decision in so far as the present case is concerned. In the instant case the petitioners have borrowed loan from the Bank which they have failed to repay and consequent upon which the bank is trying to exercise the right of set off in terms of the contractual obligations assumed by the petitioners by transferring the amounts deposited by them in the current account to the loan account. It would be extremely far fetched to say that having borrowed the loans the petitioners' current account cannot be interfered with for the discharge of the loans as itwould result in the deprivation of the rights of the petitioners guaranteed to them under Art. 19(1)(a) and Art. 21 of the Constitution of India as they would be prevented from carrying out their profession. The correct way to look at the controversy arising in this case is not as to whether the petitioners have given up their fundamental rights available to them under the Constitution by entering into a contract with the respondent Banks but to see whether the respondent Banks have right to claim set off of the amounts deposited in the current account by transferring them to the loan account in order to realise the loans advanced to the petitioners which they have failed to discharge. We are of the view that this matter falls within the domain of the law of contract and the right of set off claimed by the Banks cannot be denied on the pretext that the transfer of the amounts in the current account will result in the negation of the activities of the petitioners in publishing the newspapers, weeklies etc. In National Thermal Power Corpn. Ltd. v. M/s. Bhanu Construction Co. Pvt. Ltd. Hyderabad, : AIR1989AP140 , the view taken is that in case of encashment of bank guarantee given by the National Thermal Power Corporation Ltd..which was challenged as being wrongful or unwarranted, the proper remedy for the petitioner was to approach a civil court and not to invoke the jurisdiction of the High Court under Article 226 of the Constitution of India. It may be mentioned that in that case also the argument advanced was that enforcement of bank guarantee would result in the closure of business of the petitioner-Construction Company. The Division Bench took the view that such an argument is not available to the petitioner in a writ petition as it was a matter arising out of a contract and the proper remedy available to the petitioner is to file a suit against the National Thermal Power Corporation Limited which was enforcing the bank guarantee against the petitioner. A similar view has been taken in Writ Appeals Nos. 768 and 769 of 1986 dated 6-10-1987 upholding the action initiated by the Banks therein for the recovery of the loansfrom the defaulting Small Scale Unit.

11. The next case on which square reliance is placed by the learned counsel for the petitioners is Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay, : [1989]2SCR751 , wherein it was held that all actions including contractual dealings of the statutory authorities are deemed to be subject to judicial review and if such a statutory authority has not acted in public interest or in a manner which is mala fide or arbitrary, then such proceedings can be interfered with under Arts. 32 and 226 of the Constitution. The question arising for consideration in this case is whether the respondents in any manner are acting in an illegal or an arbitrary manner or whether the action taken by them is mala fide or for a collateral purpose due to which it can be held that the action of transferring the amounts from the current account to the loan account by the respondent Bank is vitiated in the eye of law. We find it extremely difficult to accede to this argument of the learned counsel that enforcement of doctrine of set off for the amounts to be realised by the bank which is also in the ultimate analysis in public interest is an action which is arbitrary or exercise in a mala fide manner. A logical extension of this argument would lead to somewhat astounding principle wherein it would be open for person to wriggle out of their contractual obligation by pleading that their fundamental rights are affected if the terms of the contract are enforced against them. We have no hesitation in rejecting this argument advanced by the learned counsel for the petitioners for the reasons which we have stated about in extenso.

12. For all the above reasons, W.P. No. 6601/90 is dismissed. No costs, Consequently W. A. No. 682/90 is allowed. No costs.

13. Petition dismissed.