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2010 Supreme(Cal) 29
HIGH COURT OF CALCUTTA
SYAMAL KANTI CHAKRABARTI, J.
Dipak Kumar Basak - Appellant
Versus
State Bank Of Bikanir And Jaipur – Respondent
Appeal No : W. P. 29749 (W) of 2008
Decided On : Jan 12, 2010
Kishore Dutta, Anjan Bhattacharya, D.N.Maity, Sudeep Palchoudhury
A bank cannot withhold a security made by way of depositing a title deed against which a loan has been granted and the borrower has repaid the loan with interest in full on grounds of detection of any fraud practised by one of the borrowers.
Headnote:
RETURN OF TITLE DEED - BANKING - SECURITY - LOAN REPAID - RIGHT TO RETURN - ESTOPPEL - NATURAL JUSTICE - JURISDICTION OF WRIT COURT - LIMITATION ACT, 1963, SECTION 29 - BANKING OMBUDSMAN SCHEME, 2006, CLAUSE 9(3)(d).
Fact of the Case:
Petitioners obtained a loan from the respondent bank by depositing the title deed of a property as security. After repaying the loan in full, the petitioners requested the bank to return the title deed. However, the bank refused, stating that it had lodged a complaint with the CBI regarding suspected fraudulent transactions involving one of the co-borrowers.
Finding of the Court:
The court held that the bank was estopped from retaining the title deed after issuing a clearance certificate to the petitioners, indicating that the loan had been liquidated. The court further held that the bank's retention of the title deed was causing hardship to the petitioners, who were unable to obtain loans from other financial institutions due to the non-availability of the title deed. The court also held that the bank's action violated the principle of natural justice and that the petitioners had a right to approach the Writ Court for the return of the title deed.
Issues: 1. Whether the bank can withhold a security made by way of depositing a title deed against which a loan has been granted and the borrower has repaid the loan with interest in full on grounds of detection of any fraud practised by one of the borrowers? 2. Whether the petitioners have a right to get back their title deed in question which was deposited by way of security only and denial on the part of the Bank authority to return such document is quite unjustified and violation of the principle of natural justice?
Ratio Decidendi: 1. The bank, with full knowledge of the existence of any housing loan fraud case, issued a clearance certificate to the petitioners, indicating that the loan had been liquidated. By doing so, the bank forfeited its right to retain the title deed after the liquidation of the loan. 2. The petitioners have a right to get back their title deed in question which was deposited by way of security only and denial on the part of the Bank authority to return such document is quite unjustified and violation of the principle of natural justice.
Final Decision: The court directed the respondents to return the title deed in original with other connected papers, if any, within fifteen days from the date of the order to the writ petitioners retaining a photostat copy of the same in custody for future reference to CBI, if required.
Syamal Kanti Chakrabarti, J.
1. In this writ petition the petitioners Sri Dipak Kumar Basak, Smt. Anima Basak and Smt. Bobby Basak have claimed that petitioner no. 1 Dipak Kumar Basak, respondent no. 4 Ujjwal Kumar Das and the respondent no. 5 Nandraj Kishore Goswami purchased a property measuring about 9 cottahs 19 square feet comprising premises no. 86 C Monoharpukur Road, Kolkata 700 029 at a consideration of Rs. 62,00,000/- by a registered deed of conveyance dated 03.08.2005. By depositing the said original deed of conveyance dated 03.08.2005 the petitioner no. 1 and the respondent nos. 4 and 5 received term loan amounting to Rs. 48,00,000/- from the respondent no. 1, the State Bank of Bikanir and Jaipur from their Ballygunj Branch under a Term Loan Housing (Public) Account No. 51046566086 on 03.08.2005 for the purchase of the said property with the object of developing the same by constructing building in commercial venture. They have repaid the loan with interest on 20th August, 2007. The respondent no. 2, Chief Manager of the respondent no. 1 Bank, Ballygunj Branch issued a certificate dated 13.09.2007 regarding such payment and closure of the said loan account. On payment of the said loan the original deed of conveyance which was deposited by way of security stood released and the Bank had no longer any lien in connection with such loan. Therefore, the title deed relating to the said property became free from any lien and encumbrances but the same has not been returned to the writ petitioners despite repeated request. In the meantime the respondent nos. 4 and 5 sold their share in the said property to petitioner nos. 2 and 3 for valuable consideration by a registered deed of conveyance dated 28.08.2008 and thereby the respondent nos. 4 and 5 ceased to have any right, title, interest and possession in the said property which now belongs to the petitioner nos. 1 to 3. Since the respondent nos. 1 to 3 had refused to give any reply to their prayer for return of the said title deed, they lodged a complaint with the Banking Ombudsman, Reserve Bank of India under the Banking Ombudsman Scheme on 17.01.2008. In response the Secretary, Banking Ombudsman informed in their letter dated 28.03.2008 that the above cannot be pursued since the respondent Bank has lodged a complaint with the Central Bureau of Investigation of Calcutta against respondent no. 4 about suspected fraudulent nature of transaction which is now under scrutiny. The petitioners have further claimed that they have not yet served with any copy of the said complaint and they are not informed anything about alleged fraudulent nature of transaction in relation to the said term loan, the liquidation of the said loan and the original title deed deposited with the Bank as security for repayment of the said loan. Therefore, they have approached this Court seeking direction upon the respondents to deliver the original deed of conveyance dated 03.08.2005 in respect of the aforesaid property to the petitioners or their authorised agent or representative forthwith since for want of the same they are not able to secure any loan from any other financial institution due to non-delivery of the said original title deed which is required to be deposited to secure the loan and they are accordingly sustaining heavy financial loss and unable to undertake any project as originally contemplated.
2. THOUGH no affidavit-in-opposition has been filed, the learned lawyer for the respondent nos. 1, 2 and 3 has opposed the move and claimed that the CBI authority may require the aforesaid document in connection with the complaint lodged by the Bank and for this purpose the Bank authorities have rightly retained the document which has been communicated to the petitioners. Therefore, at this stage they cannot claim for return of the said document which may be required by the CBI authorities at any time for scrutiny, verification of signature etc. Therefore, there is no merit in this writ p
