Bank May Use General Lien to Adjust Term Deposits Against Loan Default Payments: Karnataka High Court

In a significant ruling, the High Court has upheld the legal right of banks to exercise a Banker's lien over term deposits, as per Section 171 of the Indian Contract Act, 1872. The case involved the petitioners challenging the Bank's action of utilizing their father’s term deposit to settle the debts of a company named M/s. Sheshashayana Enterprises, which had defaulted on its loan. The Bank exercised its general lien…