J U D G M E N T

29.02.2024 MINI PUSHKARNA, J:

Introduction:

1. The present petition has been filed seeking direction against the respondent to forthwith release the original title documents of the property bearing No. D-17, Pushpanjali Farms, Bijwasan, New Delhi, admeasuring 3.8125 acres (“subject property”), to the petitioner in terms of the „No Dues Certificate‟ dated 01st November, 2022. Since the respondent-bank has withheld the original title deeds of the aforesaid mortgaged property, despite the entire loan having been repaid by the petitioner and the respondent-bank itself having issued a „No Dues Certificate‟ dated 01st November, 2022, the present petition has been filed.

Brief Facts:

2. Brief facts of the case are as follows:

2.1 The petitioner and respondent executed a Medium Term Loan Agreement dated 15th December, 2017, under which, the petitioner was granted a Term Loan of Rs. 23.19 Crores under Loan Account No.

6594178528.

2.2 The petitioner mortgaged the subject property as a security towards the Term Loan. A charge was also registered by the Registrar of Companies on 15th December, 2017.

2.3 The respondent issued a provisional No Objection Certificate (“NOC”) to the petitioner stating that an amount of Rs. 16,13,96,925/-

was outstanding against the petitioner‟s Loan Account.

2.4 On the basis of the provisional NOC, a company by the name of Morgan Habitat Private Limited entered into a Share Purchase Agreement dated 28th October, 2022 with the original shareholders of the petitioner company, thereby acquiring the entire 100% shareholding in the petitioner company.

2.5 Subsequently, the petitioner paid the entire outstanding amount along with further accrued interest, totalling to Rs. 16,21,04,883/-. Thus, the respondent-bank issued a „No Dues Certificate‟ dated 01st November, 2022, thereby confirming that no dues were pending in the Loan Account of the petitioner. It was further confirmed by the respondent- bank that it had no objection in releasing of charge on the subject property and handing over the original title documents.

2.6 After receipt of the aforesaid „No Dues Certificate‟, the petitioner filed the same with the Registrar of Companies, which recorded the satisfaction of charge of the respondent-bank.

2.7 On 01st November, 2022, the name of Morgan Habitat Private Limited and its nominee shareholder, Mr. Ambar Maheshwari was recorded in the share certificates of the petitioner-company.

2.8 Subsequently, the petitioner made various representations dated 16th March, 2023, 28th March, 2023 and 05th April, 2023 to the respondent seeking release of the original title deeds of the subject property. However, there was no response by the respondent-bank. Thus, being aggrieved of withholding of the original title deeds by the respondent-bank, the petitioner has filed the present writ petition.

Submissions on behalf of the petitioner:

3. On behalf of the petitioner, it is contended as follows:

3.1 Once the entire loan stands repaid and the Loan Account is closed, the action of withholding the security is without any authority of law.

3.2 There is no banker-customer relationship between the petitioner and the respondent after the issuance of the „No Dues Certificate‟ and the entire loan availed by the petitioner stands discharged.

3.3 Section 171 of the Indian Contract Act, 1872 (“Contract Act”) cannot be invoked for outstanding loan obligations of the guarantor or other separate legal entities. The said Section is applicable only qua the petitioner‟s dues towards the respondent.

3.4 Reliance by respondent on Clause 22 of the Loan Agreement dated 15th December, 2017 is misconceived as the same is applicable to only „Borrower‟s accounts‟ and „Borrower‟s liabilities to the Bank‟. Petitioner is the only Borrower under the Loan Agreement. Thus, contention of the respondent that respondent has outstanding dues against Aman Hospitality Private Limited, a group concern of the petitioner, is totally misplaced.

3.5 In support of his contenti