Loan closure allows for return of collateral documents in absence of restraining order.

JUDGMENT

1. When this Writ Petition is taken for consideration, there is no appearance for the Respondent Nos.3 and 4, Branches of Axis Bank. Standing Counsel for the Respondent Nos.3 and 4 appeared on 11.09.2025 and thereafter on 07.10.2025, the Standing Counsel sought time to file Counter Affidavit. No Counter Affidavit is seen filed. Hence, I heard the learned Counsel for the Petitioner and the Counsel for the contesting Respondent No.5.

2. The learned Counsel for the Petitioner submitted that though the Petitioner has sought Prayer Nos. (ii) & (iii) in the Writ Petition with respect to the Banking Ombudsman Scheme 2021, the Petitioner is not pressing for the said Prayers and the contentions in support of the said Prayers may be left open. Accordingly, Prayer Nos. (ii) & (iii) and contentions supporting the same are left open.

3. The Prayer No.(i) is to direct the Respondent Nos.3 and 4 to return the original documents of the Petitioner’s property within a time frame.

4. According to the Petitioner, the establishment of the Respondent No.5, M/s. Hilltop Spices and Exports, availed a loan from the Respondent No.3 and the Petitioner mortgaged his property by depositing its title deeds with Respondent No.3 to secure the loan. The loan was processed through the Respondent No.4 Branch, and hence, the Respondent No.4 is also impleaded in the Writ Petition.

5. The learned Counsel for the Petitioner invited my attention to Ext.P2 Letter issued by the Bank, which confirms the closure of the loan and requesting to receive the documents deposited by the Petitioner. The contention is that the Respondent Nos.3 and 4 have been illegally refusing to release the documents, citing the pendency of Ext.P5 Suit instituted by the Respondent No.5 against the Petitioner and the Bank. The Civil Court has not passed any order in the said suit restraining the release of the documents, is the contention.

6. The learned Counsel for the Respondent No.5 submitted that on account of the pendency of the dispute between the Petitioner and the Respondent No.5 in the Civil Court, this Court may not direct the release of the documents to the Petitioner;

otherwise, Ext.P5 Suit will become infructuous.

7. I have considered the rival contentions.

8.The mortgaged property admittedly belonged to the Petitioner. The contention of the Respondent No.5 is that a part of the loan amount is paid to the Petitioner and it is the cause of action for Ext.P5 Suit for permanent prohibitory injunction. Admittedly, the loan availed from Respondent Nos.3 and 4 is closed and the Bank is ready to release the documents as revealed from Ext.P2. Though the Respondent No.5 has filed Ext.P5 Suit, the Respondent No.5 could not secure any interlocutory Order restraining the Bank from releasing the title deeds deposited by the Petitioner. The Bank cannot refuse to release the Title Deeds to the Petitioner when the loan is closed, in the absence of any interdictory order from any Court or Authority. Mere pendency of a suit could not be a ground to refuse to release the Title Deeds to the Petitioner. This Writ Petition was filed on 12.08.2025, and hence the Respondent No.5 had enough time to secure any order preventing the release of the title deeds to the Petitioner, from the Civil Court where Ext.P5 Suit has been pending. In such a situation, the Bank is liable to release the documents deposited by the Petitioner to the Petitioner.

9.Accordingly, this Writ Petition is allowed, directing the Respondent Nos.3 and 4 to return the original documents mentioned in Ext.P2 to the Petitioner within a period of one month from the date of receipt of a certified copy of this judgment.

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