A bank cannot exercise a general lien to retain title deeds for debts where the mortgagor is not a borrower and has cleared the outstanding loan.

JUDGMENT :

1. This writ petition has been filed under Article 226 of the Constitution of India for the following relief :

".....to issue a writ, order or direction more particularly one in the nature of writ of mandamus, declaring the action of the respondents as illegal, irregular, irrational, arbitrary, without any authority of law and violation of Articles 14, 19, 21 and 300-A of the Constitution of India to release original title deeds of the agriculture land to the petitioner which was deposited at the time of registered mortgage which is in the wrongful custody of the 3rd respondent even after discharging the liability of the registered mortgage deed and consequently direct the 2nd and 3rd respondents to pay the damages to the petitioners....."

2. The case of the petitioner, in brief, is that, the petitioner obtained a loan from 3rd respondent bank under Kisan Credit Card facility, called as 'KCC' to a tune of Rs.1,99,00,000/- by way of registered mortgage by depositing his title deeds regarding pledged properties as well as of that of his relatives as collateral security. The 2nd respondent banker had credited Rs.1,90,00,000/- only instead of Rs.1,99,00,000/- to the petitioner's overdraft account. The petitioner had cleared the loan to the 3rd respondent bank in regular instalments and the loan tenure was completed on 17.04.2020 and loan closure proceedings were initiated by the banker as was evident from the loan statement. The respondent Nos.2 and 3 did not issue the loan closure letter to the petitioner, even though the loan was cleared. In the CIBIL website, it is showing as if the loan was still pending and the respondent Nos.2 and 3 did not choose to discharge the mortgage charge and they have kept the petitioner's agricultural lands to an extent of Acs.4.41 cents in their mortgage, despite of several requests made by the petitioner through e-mail communication and registered post. Aggrieved by their inaction, the petitioner filed WP No.35439 of 2022 wherein this Court granted interim direction to the respondent Nos.2 and 3 to discharge the mortgage charge over the property, as the petitioner had cleared the loan long back. Pursuant to the said orders dated 04.01.2023, the respondent Nos.2 and 3 released the mortgage charge on the mortgaged property by executing discharge receipt vide Document No.P525 of 2023 on the file of the Joint Sub-Registrar, Rajahmundry, on 02.02.2023. Thereafter, to the email communication sent by the petitioner to release his property documents covered under discharge deed; the authorized person of the bank had replied that they had filed detailed counter in WP No.35439 of 2022. Further stating that the petitioner being a partner in M/s. Cherukuri Veerraju and others, stood as a guarantor to KCC loan sanctioned to Cherukuri Veerraju. The said Cherukuri Veerraju had defaulted the payment and the petitioner and other guarantors of the firm are jointly and severally liable to the said debts. Thus, the bank, by exercising its contractual and statutory right to lien on title deeds deposited by the petitioner for due discharge of the loan amount. The writ petition vide WP No.35439 of 2022 was disposed of on 05.07.2023 as the same is confined only with regard to discharge of registered mortgage.

It is the further case of the petitioner that, the respondent Nos.2 and 3 approached the Debt Recovery Tribunal at Visakhapatnam and filed proceedings bearing OA No.824 of 2018 and the same was decreed in favour of the bank, directing Cherukuri Veer