The Reserve Bank of India mandates banks to remove charges on fully repaid mortgages within 30 days, entitling borrowers to compensation for delays.

JUDGMENT :

S.K. Panigrahi, J.

1. The Petitioner has filed the present Writ Petition seeking a direction from this Court towards the Opposite Parties to remove the charge over the mortgaged property registered with Sub-Registrar, Nayagarh.

2. The Petitioner further seeks a direction to the Opposite Parties to pay the Petitioner Rs.5000/- per day from 01.12.2023 till removal of charge over the mortgaged property registered with Sub-Registrar, Nayagarh as per Circular of the Reserve Bank of India bearing No.RBI/2023-24/60DoR.MCS.REC.38/01.01.001/2023-24 dated 13.09.2023.

3. The Petitioner also seeks a direction to the Opposite Parties to pay the Petitioner interest at the rate of 18% per annum on the sum computed as per Prayer No. (ii) (iii);

I. FACTUAL MATRIX OF THE CASE

4. Succinctly put, the facts of the case are as follows:

(i). The Petitioner being the sole proprietor of M/s Veena House, Nayagarh had availed a cash credit loan facility (bearing account No. 143402000005101) from the Opposite Party No.2 in order to further his business of consumer durables. With increase in business and requirement of capital, the sanctioned loan amount was duly increased to Rs. 85 lakhs over time by Opposite Party No. 2.

(ii). Against the loan availed, the Petitioner submitted the original property papers of his land admeasuring 85 decimals situated near Police Training School, Nayagarh ("mortgaged property") before Opposite Party No.2 and furthermore, a mortgage deed was executed between the Petitioner and Opposite Party No.2 which was registered before the Sub Registrar, Nayagarh. The last of such agreement was executed and registered on 04.02.2016. By way of the said registered agreement, the Opposite Party No.2 created a charge over the property of the Petitioner.

(iii). On 31.03.2021 and 23.11.2021, the Petitioner after receiving "interest reversal" for a sum of Rs 3,07,969/- and Rs 1,47,882/- respectively, from Opposite Party No.2, apprehending excess interest being charged, got his cash credit bank account audited by an accredited chartered accountant. Through the audit it was found that between 01.09.2019 and 20.09.2021, excess interest of Rs. 5,71,050/- had been charged on him by Opposite Party No.2.

(iv). Notably, even after duly communicating the audited account statement, the Opposite Party No.2 has till date not refunded the balance excess interest levied.

(v). With such incidents casting reasonable apprehension of excess interest being charged, the Petitioner on 21.01.2022 and 02.04.2022 preferred two representations before Opposite Party No.2 inter alia requesting for providing the bank statement of the aforementioned account for the period from 01.04.2013 to 01.09.2019 and the rate of interest lawfully chargeable during this period.

(vi). After the intervention of the Banking Ombudsman, even though the Opposite Party No.2 furnished certain information, however, the Opposite Party No.2 has failed to provide the rate of interest lawfully chargeable on the Petitioner from the period between 01.04.2013 to31.03.2016.

(vii). After having cleared substantial loan amounts, the Petitioner on12.09.2023 deposited the remaining loan amount of Rs. 57,458/- with Opposite Party No.2. Upon such deposit being made, the outstanding loan amount was "0".

(viii). After making such payment, the Petitioner handed over a request letter to the Bank Manager of Opposite Party No.2 for closure of loan account and return of the papers of the mortgaged property which was not accepted. This necessitated the Petitioner to address an email dated12.09.2023 to Opposite Party No.2.

(ix). In the meanwhile, the Reserve Bank of India after taking note of the problems being faced by customers in getting their mortgaged property papers released even after making full payment, vide Circular No. ’RBI/2023-24/60DOR.MCS.REC.38/01.01.001/2023- 24 dated 13.09.2023 directed lending institutions including banks to return all the original movable/immovable property documents and remove char