The main legal point established in the judgment is the limitation on a bank's power to retain pledged goods, emphasizing the need for adherence to higher standards of transparency and reasonableness in discharging public functions.

JUDGMENT

1. The petitioner no. 1 is a multi-system operator of cable television and is a subsidiary of Siti Networks Limited (for short, “Siti”). Siti holds 60 per cent equity shares in the petitioner no. 1. The petitioner no. 1 took term loan facilities from the respondent no. 3-Bank, namely the Axis Bank Limited. Subsequently, the petitioner no. 1 made full repayment of the said loan facilities by November 7, 2022. In spite of several reminders, the respondent no. 3-Bank did not issue a “No Dues” Certificate and/or release the securities in respect of the term loan/credit facilities. The securities primarily comprised of an immovable property and 29.99 per cent shares of petitioner no. 1 held by Siti, regarding which a pledge was executed by Siti in favour of the respondent no. 3-Bank.

2. The petitioners argue that upon the repayment of the entire term loan facilities, it was the incumbent duty of the Bank, in terms of the Sanction letter and agreement, to issue No Dues Certificate and return all the securities to the petitioners. However, the Bank takes shelter of Section 171 of the Contract Act, 1872 (hereinafter referred to as, “the 1872 Act”) to claim a general lien of bankers on the security pertaining to the shareholdings of Siti in the petitioner no. 1 on the plea that Siti?s accounts with the Bank has been classified as “Non-Performing Asset” (NPA).

3. The petitioners contend that Section 171 pertains only to the accounts of the borrowers. The petitioner no. 1/borrower having repaid all its loans, no further general lien is applicable.

4. It is argued that in terms of the agreement between the parties, it was the incumbent duty of the Bank to return the securities.

5. Since a preliminary objection of maintainability of the writ petition is raised by the respondent no. 3-Bank, learned counsel for the petitioners argues that availability of alternative remedy is not an absolute bar to a writ petition being entertained. In support of his contentions, learned counsel cites S.J.S. Business Enterprises (P) Ltd. Vs. State of Bihar and others, reported at (2004) 7 SCC 166, where the Supreme Court held that the existence of an adequate or suitable alternative remedy available to a litigant is merely a factor which a court entertaining an application under Article 226 will consider for exercising the discretion to issue a writ, but the existence of such remedy does not impinge upon the jurisdiction of the High Court to deal with the matter itself if it is in a position to do so on the basis of the affidavits filed. Even when an alternative remedy has been availed but not pursued, a party could prosecute proceedings under Article 226 for the same relief.

6. By citing an unreported judgment of this Court in WPA No. 21710 of 2017 [M/s Pearson Drums & Barrels Pvt. Ltd. Vs. The General Manager, Consumer Education & Protection Cell of Reserve Bank of India and others], it is contended that if the respondent-Bank discharges its public duty, which is within the domain of the State to discharge, this Court can interfere under Article 226 of the Constitution of India.

7. Learned counsel next cites MB Power (Madhya Pradesh) Ltd. through its Authorised Signatory, Rajinder Singh Vs. Ombudsman, Reserve Bank of India and Another, reported at 2023 SCC OnLine Del 6790, where a learned Single Judge of the Delhi High Court held that the Ombudsman is a quasi-judicial body and is reasonably expected to pass a well-reasoned order and any empty formality is to be weeded out. The Ombudsman Scheme was also discussed therein.

8. It is contended by the petitioners that the petitioners challenged the action of the Bank before the Banking Ombudsman who refused to entertain the complaint of the petitioners on the flimsy ground that it was not a case of deficiency of service by the Bank. Hence, the challenge against the Ombudsman, who is a statutory authority, is very much maintainable.

9. Learned counsel next cites another unreported judgment of this Court in WPA N