The bank's failure to invoke a guarantee within the limitation period and to provide prior notice before withholding a debtor's benefits violates the principles of natural justice.

JUDGMENT :

G. Anupama Chakravarthy, J.

1. The petitioner has filed the instant application for the following reliefs:

“(i) Issuance of writ or in the nature of writ of Mandamus directing the respondent no. 3 to 10 to credit Rs. 3,14,000/- (Three Lacs and Fourteen Thousand only) which was Post retiral benefit / Gratuity Amount / Pension Amount of the petitioner and which has been realized in an arbitrary manner against the law / Rule / Regulation / Agreement and without any intimation, communication or demand and moreover without invoking Guarantee within Limitation Period.

(II) Issuance of writ for declaring the action taken by the respondents by which respondents had set hold Rs. 3 lakh (Post retiral benefit / Gratuity Amount) and further realized Rs. 3,14,000/- without any intimation, communication or demand in an arbitrary manner against the Law / Rule / Regulation /Agreement which is against the Principle of Natural Justice.

(III) Issuance of writ or in the nature of writ of Mandamus directing the respondent no 3 to 10 to supply all the relevant documents on the basis of which action has been initiated against the petitioner.

(IV) Issuance of writ or in the nature of writ of Mandamus directing the respondent no. 3 to 10 to pay interest for the period for which the aforesaid amount has been set hold/realized

(V) Issuance of direction to the respondents further not to Set Hold/Realization of any further amount from the account of petitioner unless there is any admission or acknowledgment, any judgment, award or order for the appropriate authority till the final adjudication of this case.

(VI) Grant such other order/orders, relief/reliefs as your Lordships may deem fit and proper.”

2. The short facts of the case are that the petitioner, was posted as Head Constable in Bihar Police, at Munger from 2008 to 2012. In December 2011, he availed a personal loan of Rs.5,00,000/- from State Bank of India (SBI), Munger Branch, for his daughter’s marriage, which he repaid in full through 60 EMIs. Sri Ajay Prasad Singh (respondent No. 11), a fellow Constable posted at Munger, approached the petitioner to stand as guarantor for his personal loan of Rs.5,26,179/-, and he availed from the same branch on 29.12.2011. Relying on their professional relationship, the petitioner agreed and executed a Deed of Guarantee on the said date, in favour of Sri Ajay Prasad Singh.

3. It is submitted in the petition that the borrower defaulted in repayment, and the loan account was classified as a Non-Performing Asset (NPA) on 31.12.2012. It is further submitted that the Bank neither invoked the Guarantee within the limitation period nor issued any prior notice, demand, or communication to the petitioner until a Legal Notice dated 28.08.2017 was received by him on 06.09.2017 i.e., almost five years later after the NPA of the borrower. According to the petitioner it is in violation of clauses 7, 8, 11, and 14 of the Loan Agreement and Guarantee Deed, which mandate issuance of demand and notice before invoking the guarantor’s liability. 4. It is contended by the Learned counsel for the petitioner that after the superannuation of the petitioner on 31.03.2017, post retiral benefits were credited to his SBI Sonepur Branch account in the month June 2017, including gratuity and provident fund. On 29.06.2017, without any prior notice or explanation, a Set Hold was placed on the amount of Rs. 3,00,000/- by the SBI Munger Branch. Subsequently, a total of Rs.3,14,000/-, including part of his pension, was