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2025 Supreme(Gau) 2302
THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
MICHAEL ZOTHANKHUMA, J.
Smti. Kiran Devi Jain And Anr. - Petitioners
Versus
Indian Bank (Formerly Allahabad Bank) Represented By The Assistant General Manager - Respondent
WP(C) 286 of 2024
Decided On : 20-11-2025
For the Petitioner:Mr. P. Chowdhury, Advocate
For the Respondent:Mr. Pfosekho Pfotte, Advocate
The court emphasized that private disputes involving financial institutions and guarantors should be resolved in civil courts when alternative legal remedies are available.
Headnote:(A) Banking Regulation Act - Sections regarding loan agreement and security - Petitioners sought direction to release property mortgaged for loan - Respondent bank contended petitioners have alternative remedies in civil court, and no violation of rights shown - Court found issues pertain to private dispute, decline to interfere with bank's discretion on security release - Law does not allow writ for private disputes. (Paras 12, 20, 22)
Facts of the case:
The petitioners, as guarantors to a loan, requested the bank to release their property being used as collateral. The bank reduced the limit of bank guarantees but retained the security based on accumulated dues. (Paras 2-10)
Findings of Court:
The court found that the petitioners have alternative remedies available and their grievances are best suited for resolution in civil court. It dismissed the petition, emphasizing the nature of private disputes. (Paras 20-22)
Issues: The main issue was whether the court should entertain a writ regarding the release of mortgaged property when alternative remedies exist in civil courts. (Paras 12, 20)
Ratio Decidendi: The court emphasized that disputes involving private parties, especially with alternate legal remedies available, should be adjudicated in civil courts rather than in writ jurisdiction. (Paras 20-22)
Result: Writ petition dismissed.
| Table of Content |
|---|
| 1. petitioners seek release of mortgaged properties (Para 2 , 3 , 4 , 5 , 6 , 7) |
| 2. value of remaining properties relative to cash credit facility (Para 8 , 9 , 10 , 11) |
| 3. respondent argues alternative remedies exist (Para 12 , 13 , 14) |
| 4. observations on property value and accumulated interest (Para 15 , 16 , 17) |
| 5. court prefers civil dispute resolution (Para 18 , 19 , 20) |
| 6. writ petition dismissed; case not suitable for writ court (Para 21 , 22 , 23) |
JUDGMENT :
MICHAEL ZOTHANKHUMA, J.
1. Heard Mr. P. Chowdhury, learned counsel for the petitioners. Also heard Mr. Pfosekho Pfotte, learned counsel for the respondent bank.
2. The petitioners have prayed for a direction to be issued to the respondent bank to release the property of the petitioner no.1 located at Patta No.1387, Dag No.26/1665, Golaghat Road, NH-39, Dimapur, Nagaland measuring 1 Bigha 3 Kathas 14 Lechas (25056 sqft.) with single storeyed RCC building from the mortgage taken as security for the Cash Credit facility provided to the petitioner no.2 by the respondent bank.
3. The further prayer of the petitioners is to direct the respondent bank to keep the property belonging to another guarantor, Sri Nirmal Kumar Jain, a 7 storeyed building situated at Patta No.40, Dag No.288, Old Daily Market, Dimapur measuring 0 Bigha, 1 Katha, 17 Lechas (5328 sqft.) as collateral security for the Cash Credit facility provided to the petitioner no.2. The petitioners have also prayed for a direction to be issued to the respondent bank to close Bank Guarantee facility of Rs.6.00 crores given to the petitioner no.2 by the respondent bank, as per letter dated 24.07.2024 issued by the petitioner no.2 to the respondent bank.
4. The petitioners’ counsels submits that the petitioner no.2 which is a Proprietorship Firm had obtained a Cash Credit facility from the respondent bank, by opening CCA No.50153993251 having a sanction limit of Rs.21.00 crores. The total amount of credit facility was divided into 2 parts. Firstly, Cash Credit was given for Rs.4.00 crores, while 17 crores was to be utilized for the purpose of bank guarantees. The bank thereafter issued a sanction letter dated 20.06.2013 to the petitioner no.2, by keeping 4 immovable properties as security with plant, machineries and 20% margin on it. The said facility was extended from year to year.
5. The petitioners’ further case is that the petitioner no.1 and two others were guarantors for the petitioner no.2, who had availed of a CCA facility and Bank Guarantee facility from the Bank. The 4 immovable properties belonged to the petitioner no.1, one James Akam Magingme and one Shri Nirmal Kumar Jain. The petitioner no.2, vide letter dated 05.12.2017, requested the bank for reduction of limit of bank guarantees made available to the petitioner no.2. The petitioner no.2 further prayed for continuing to maintain the cash credit limit as had been originally sanctioned.
6. The bank was thereafter pleased to review and renew the cash credit and the bank guarantee facilities, in response to the petitioners’ letter dated 05.12.20127, wherein the cash credit was renewed at Rs.4.00 crores and the limit of bank guarantees was reduced to 6.00 crores from Rs.17.00 crores, in terms of sanction letter dated 05.04.2018 issued by the Assistant General Manager of the bank. The respondent bank also released 2 properties out of the four properties belonging to Shri James Akam Magingme and Sri Nirmal Kumar Jain.
7. As the petitioner no.2 had a dispute with the bank in respect of encashment of the 4 bank guarantees valued at Rs.6,04,40,057/- on 22.03.2018, in favour of one Engineering Projects India Limited, the petitioners wanted to close the bank guarantee facility provided to the petitioner no.2.
8. The petitioners’ case is that the petitioner no.2 has paid all the money with regard to the encashed bank guarantees to the bank along with interest. However, Money Suit No.10/2018 has been filed by the petitioner no.2 against the bank for recovery of
