The bank has no authority to retain title deeds after loan closure, and compensation claims must be pursued through appropriate legal forums.

JUDGMENT :

BECHU KURIAN THOMAS, J.

Petitioners seek for a direction to release their title deeds and also for a declaration that the second respondent has no authority to retain petitioners’ original title deeds, despite closure of the loan account. Petitioners have also sought for a compensation of Rs.10,00,000/- for illegal retention of documents for nine years after closure of the loan.

2. The first petitioner and her husband had availed a loan from the second respondent in the year 2009. Second and third petitioners who are their children, were the guarantors to the said loan. Husband of the first petitioner expired on 20.10.2011. Petitioners are the legal heirs, as is evident from the legal heirship certificate dated 20.3.2013.

3. On 16.07.2015, the bank issued Exhibit-P4 letter acknowledging the deposit of four title deeds by the petitioners as security for the housing loan availed from them. The document which included two exchange deeds bearing Nos. 1924/1992 and 2039/1992, a release deed No.1350/1975 and a sale deed No.3625/1971 all of Aluva Sub Registry Office, were retained by the second respondent bank. Subsequently, on 04.08.2015, as per Exhibit-P5, petitioners requested the second respondent to close the loan account and release the collateral securities mortgaged with the bank, after remitting Rs.58,01,320/-. According to the petitioners, after crediting the cheque issued by them, the bank closed the loan account on 05.08.2015. The statement of accounts is produced as proof of closure of the loan. However, despite closure of the loan account, the title deeds relating to the property mortgaged, were not returned. Though several letters were issued, the bank did not return the original title deeds. Petitioners contend that refusal to release the original title deeds, even after closure of the loan account is illegal and the unilateral action of the bank in withholding the security documents, after closure is arbitrary. Hence, they have approached this Court seeking the reliefs mentioned earlier.

4. A counter affidavit has been filed by the Chief Manager of the second respondent stating that the writ petition is not maintainable and that they are not amenable to the writ jurisdiction of the court. It is further stated that the loan availed by the first petitioner and her husband was secured by equitable mortgage which was also a general security for a cash credit limit availed by M/s. Parackel Cartel who had enhanced the cash credit limit by deposit of title deeds on 09.07.2010 and the credit limit was closed and later the title deeds of the properties mortgaged by M/s. Parackel Cartel was released. It is also pleaded by the second respondent that the housing loan availed by the petitioners was closed on 05.08.2015 following take over by HDB Financial Services and on receipt of Exhibit-P8 request, a detailed examination was conducted at the branch which revealed that no files or documents were available there. Despite a detailed search to rule out the possibility of any misplacement, the title deeds could not be traced out. It was also stated that the second respondent branch had moved to a new premises in July 2023 and many closed files were disposed of during the shifting process. The second respondent asserted that the title deeds of the petitioners were not retained or withheld at any point in time since there were no pending dues and they are not retaining the documents. It was also stated that the documents requested by Exhibit-P8 letter have not been able to be traced out. Inspite of the above pleading, second respondent asserted that when a financial institution takes over a loan facility they normally demand the original title deeds be released from the earlier institution and be deposited with them. According to the respondents, it is unbelievable that the HDB Financial Services who took over the loan would have waited more than 8 years to submit the original title deeds and that the petitioners have not discl