Lien – Whether Suo Moto appropriation pursuant to Lien permissible?

The Hon’ble Calcutta High Court has answered this question in negative in A.P.D. No. 357 of 2012 titled as Central Bank of India Vs. R.K. Agencies Limited, whereunder, Central Bank of India suo moto appropriated the amount kept in fixed deposit by R.K. Agencies on the premise that one Mr. ‘X’, who has controlling block of share in R.K. Agencies was a debtor in the London account of Central Bank of India. The Hon'ble Court observed that though nexus was found, suo moto appropriation is not permissible. The relevant portion of the judgment is extracted herein under;

“To sum up, we find, Sethia had dues in London. If Drumplace Limited is a company of Sethia, it did suffer the Decree before Queen’s Bench Division. Central Bank of India was thus entitled to enforce such decree provided it is lawfully enforced through appropriate mechanism. Suo motto appropriation on the pretext of transfer of account from London to Bombay, would have no factual or legal support.”