W.P.(C) 5807/2020 Page 1 of 16

$~112

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IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: 30^th August, 2022.

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W.P.(C) 5807/2020 & CM APPLs. 21004/2020, 20708/2021

HONEY BUILDERS LIMITED

.....

Petitioner

Through:

Mr.

Neeraj

Malhotra,

Senior

Advocate with Mr. Vikas Sethi and

Mr. Nimish Kumar, Advocates.

versus

UNION BANK OF INDIA

.....

Respondent

Through:

Mr. Alok Kumar, Ms. Somya Yadava,

Mr. Manan Gambhir, Ms. Garima

Soni and Ms. Nandita Jha, Advocates.

CORAM:

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

SANJEEV NARULA, J. (Oral):

1. Petitioner has invoked Article 226 of the Constitution of India seeking

release of Fixed Deposit Receipts [“FDRs”] claiming that the lien/charge

created thereon stands discharged, and the bank is unlawfully withholding

the same.

2.

Mr. Neeraj Malhotra, Senior Counsel for the Petitioner-Honey

Builders Limited [“HBL”], has handed over a brief note of written

submissions across the board, which is taken on record.

3. Briefly, facts of the case are as follows:

3.1.For participating in a scheme for external development works of a

residential plotted colony in Gurugram, Department of Town and

Country Planning, Haryana [“DTCP Haryana”] called upon

Supertech Limited to furnish Bank Guarantees [“BGs”] for which

2022:DHC:3631

W.P.(C) 5807/2020 Page 2 of 16

they approached the Respondent – Union Bank of India (formerly

Corporation Bank) [“Bank”].

3.2.The Bank asked Supertech Limited to secure the BG by way of

100% cash margin, and if furnished by a third-party security, the

same would be by way of a Memorandum of Charge/Lien.

3.3.In above background, HBL, which at that time was a sister concern

of Supertech Limited, came into the picture. It created security by

executing two documents, both dated 31^st December, 2018, titled

‘Memorandum of Charge/Lien Over Deposit by Third party’ with

the Bank which contained identical terms and clauses. [Hereinafter,

both, and collectively, shall be referred to as “Memoranda”]

Through the Memoranda, HBL created lien/charge on two FDRs

bearing no. 530101344818079 and 530101344818103 for Rs. 21.80

crores and Rs. 1.05 crores respectively, in favour of the Bank, which

were to inter-alia serve as 100% cash margin.

3.4.With security in place, the Bank issued two BGs, bearing no.

IPBG04471800044 and IPBG0447l800043 for Rs. 21.80 crores and

Rs. 1.05 crores, both dated 31^st December, 2018, respectively, in

favour of DTCP Haryana, on account of Supertech Limited.

3.5.These BGs were subsequently returned by DTCP Haryana on 22^nd

July 2022, and cancelled by the Bank. This fact is not in dispute.

3.6.The grievance of HBL is that despite discharge of the BGs, and

issuance of several letters requesting for release, the Bank is

illegally and arbitrarily withholding the FDRs.

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W.P.(C) 5807/2020 Page 3 of 16

Contentions of Petitioner

4. Mr. Malhotra has made following submissions:

4.1.HBL furnished the FDRs as security, specifically for issuance of

BGs. Clause 1 of the Memoranda, which is clear and specific,

demonstrates that HBL made a request only for issuance of BGs on

account of Supertech Limited, and nothing more. Since the BGs

have been discharged, HBL is entitled to have the FDRs released.

4.2.The Memoranda are standard pre-printed formats, provided by the

bank, which had blanks that were to be filled out by-hand. HBL

signed the same and did not read each and every clause on the belief

that inapplicable clauses would be struck out. HBL was not aware of

the Bank’s ill-intention to misuse certain clauses of the Memoranda

to withhold its 100% cash margin.

4.3.Clause 1 has