BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT Reserved On: 06.01.2026 Pronounced On: 22.01.2026 CORAM THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN AND THE HONOURABLE MR.JUSTICE K.K.RAMAKRISHNAN WP(MD)No.937 of 2026 M/s.Chithra Agencies Private Limited, Rep by its Managing Director, Mr.Sriram Gunasekaran, No.58, New Natham Road, Bhagyalakshmi Nagar, Thiruppalai, Madurai-625 017. ... Petitioner Vs.

The Authorized Officer, Specialized ARM Branch, Canara Bank, Vasantha Nagar Branch, Madurai-625 017. ...Respondent Prayer: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records relating to the impugned notice dated 26.11.2025 by the respondent and quash the same and directing the respondent to credit the proceeds of the fixed deposits to the petitioner's account.

For Petitioner :Mr.G.Vairavasubramanian For Respondent :Mr.C.Deepak *****

ORDER

(Judgment of the Court was delivered by DR.G.JAYACHANDRAN,J.) The writ petitioner M/s.Chitra Agency Pvt., Limited is an authorised dealer for Castrol India Ltd. For its business purpose, the writ petitioner had availed cash credit facility from the Canara Bank, Vasantha Nagar Branch, Madurai, the respondent herein. The total fund based limit periodically enhanced from Rs.13 crores to Rs.28.64 crores. Apart from availing the OCC/ODBD facility by furnishing immovable properties as security, the writ petitioner has also availed a Bank Guarantee facility to the tune of Rs.65 lakhs for the supply made by Castrol India Ltd. For the said Bank Guarantee, the respondent Bank instructed the Writ Petitioner to maintain 100% margin money in the form of Fixed Deposit, which the writ petitioner has duly complied. For the default in payment of the loan amount, the respondent Bank had credited the FD maturity amount of Rs.47,44,930/- into the loan account. Hence, a writ of mandamus to direct the respondent Bank to reverse the credited amount into the writ petitioner’s account. 2.The details of Bank Guarantee issued by the Bank :

3.The writ petitioner claims, the following fixed deposits made in the respondent Bank :

4.The case of the writ petitioner is that, for the default in payment of OCC/ODBD loan to the tune of Rs.26,01,44.933.02 (Rupees Twenty six Crores One Lakh Fortyfour Thousand Nine hundred and Thirty Three and Paise Two) the respondent Bank issued notice, dated 22.09.2025 under section 13(2) of SARFASI Act, calling upon the writ petitioner to repay the loan due. Thereafter, the Bank initiated the steps to auction the properties given as security. Challenging the same, the writ petitioner has filed S.A.No. 20 of 2026 before the Debt Recovery Tribunal at Madurai and had obtained an order of stay of sale notice on condition that the writ petitioner to deposit 30% of the loan due in four equal instalments of Rs.1,98,46,500/- each between 07.02.2026 and 30.04.2026. While so, the respondent Bank, on maturity of the 4 fixed deposits, had appropriated the matured amount of Rs.47,64,930/-, towards the credit of the Cash Credit account, though the writ petitioner has not utilised the loan amount for its investment in the fixed deposit. When this was questioned by the writ petitioner through notice dated 22.10.2025, the respondent bank had replied that the Bank has right to do so in view of Section 171 of the Contract Act, 1872.

5.According to the Writ petitioner, Castrol India Ltd., in whose favour the Bank Guarantee was availed, had informed the writ petitioner as well as the respondent Bank vide letter dated 05.11.2025 that they don’t have any claim from the above Bank Guarantees and had permitted the writ petitioner to cancelled the Bank Guarantees. On receipt of the letter from Castrol India Ltd, the writ petitioner wrote a letter to the respondent Bank on 15.11.2025 to reverse the credits made to the CC Account. The respondent Bank refused to reverse the credit citing section 171 of the Contract Act, which in fact not applicable for t