IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.2162 of 2011 Arun Kumar Bajoria son of Sri Shravan Kumar Bajoria, resident of 2nd Floor, Ganpati Plaza, Khalifabagh Chowk, P.S. Kotwali, Town and District Bhagalpur. ….. Petitioner. Versus 1. The United Commercial Bank through its Chairman-cum-Managing Director, Brabourne Road, Kolkata. 2. The Assistant General Manager, United Commercial Bank, Regional Office, Central Jail Road, Bhagalpur. 3. The Branch Manager, United Commercial Bank, Bazar Branch, D.N.Singh Road, Bhagalpur. 4. The Zonal Manager, United Commercial Bank, Bhagalpur. ….. Respondents. ----------- For the petitioner : Mr. Gautam Kejriwal, Advocate. For the respondents : Mrs. Nilu Agrawal, Advocate. -------- 11/ 23.09.2011 1. Heard learned counsel for the petitioner and learned counsel for the respondents. 2. This writ petition has been filed by the petitioner for the following reliefs:- (i) For issuance of a writ/direction in the nature of certiorari for quashing of the letter dated 23.10.2010 bearing Ref. No.10-11/261 issued under signatures of Respondent Zonal Manager, UCO Bank, Bhagalpur whereby the documents of title to the residential flat belonging to the petitioner and his mother have been denied to be released without any reasonable basis and authority in the eye of law; (ii) For issuance of a writ in the nature of mandamus directing the respondents to release the documents of title to the residential flat belong to the petitioner and his mother and also the no-dues certificate in light of the fact that the entire arrears of the housing loan amount against which the title documents were pledged have been liquidated by the petitioner and the same stood closed in light of the order dated 29.09.2010 passed by this Hon‟ble Court in CWJC No.10397 of 2010. (iii) For any other reliefs to which the petitioner is found - 2 - entitled to in the facts and circumstances of this case. 3. It is not in dispute that petitioner had taken housing loan from the respondent- United Commercial Bank for a sum of Rs.15 lacs repayable in 20 years by equal monthly instalments for which the petitioner and his mother offered equitable mortgage of their residential Flat at 2nd Floor, Ganpati Plaza, Khalifabagh Chowk, P.S. Kotwali Town within the District of Bhagalpur and accordingly registered sale deed was pledged with the respondent-Bank. It is also not in dispute that due to failure of the petitioner in payment of the instalments and outstanding arrears, the account was quantified as non- performing assets in the year 2004-05 by the Bank, whereafter the proceeding under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as „the Act‟ for the sake of brevity) was initiated and demand notice under Section 13(2) of the Act was issued and thereafter a possession notice under Section 13(4) of the Act was also issued. 4. The petitioner being aggrieved filed CWJC No.5285 of 2010 which was disposed of by a Bench of this Court vide order dated 11.05.2010 (Annexure-2) with the following observations:- “ In course of negotiation with the Bank, the Bank pointed out that the petitioners in one capacity or the others have two CC accounts and a personal cash loan account, which are all in default and classified NPAs. Bank wants a packaged settlement for all accounts. It has offered that on payment of Rs.5,75,000/- waiving interest of about Rs.8 lacs the housing loan account would be settled. Petitioners agree to clear that account by 30th May, 2010. That settles the housing loan issue on payment of the aforesaid amount. The possession of the house would be restored to the petitioners. So far as the other three accounts are concerned, Bank has requested the petitioners to liquidate those accounts - 3 - within three months. Petitioners point out that substantial securities are already with the Bank in the shape of term deposits. The accounts of which the Bank is not furnishing, if that is appropriated then substantial amount outstanding in the three accounts or some of the accounts would stand liquidated. It is for the petitioners to right to the Bank authorizing the Bank to appropriate those securities immediately, which would save accrual of interest. So far as these accounts are concerned, if the offer of the Bank is not acceptable to the petitioners, petitioners may negotiate, but, in case of negotiation the petitioners would be obliged to clear the three accounts within three months time, which is being fixed by the Court as the end of August, 2010. In case, they are unable to come to a negotiated settlement and they do not clear all the three accounts as well by the end of August, 2010 Bank would be free to take action in respect of three accounts as may law oblige.” 5. It is also not in dispute that thereafter the petitioner approached the respondent-Bank and in response thereto the authorities of the Bank sent letter dated 15.06.2010 to the petitioner with regard to the subject; “House Loan Account LN 4422 settled amount of Rs.7,75,000.00 as a final payment dated 31.05.2010 in view of the order of the High Court”. Since the time for payment of loan was fixed as 31.05.2010 by this court vide order dated 11.05.2010, the petitioner filed CWJC No.10397 of 2010 for extension of time, but during the pendency of the said writ petition, the petitioner deposited the entire amount of the Housing Loan. Hence the said writ petition was dismissed by a Bench of this court vide order dated 29.09.2010 (Annexure-4) observing as follows: “Be that as it may, petitioners have failed to comply with Court‟s order and indulgence granted by this Court on all accounts. So far as the housing loan is concerned, that having been liquidated, I do not think so the Bank would be justified in proceeding as against the said - 4 - property for the said loan. That account should stand closed but so far as other accounts are concerned, this Court is not in a position to extend the time any further. It is for the petitioners to approach the Bank for any compromise and it would be open to the Bank to take any steps as it may be advised. Mr Kejriwal then submits that before the expiry of period fixed by this Court that is 30th August 2010, the Bank having taken steps to precipitate the matter under SARFAESI Act, father of petitioner No 1 has filed another writ petition which is pending. As per the petitioners, that action was contrary to the order passed by this Court earlier. In my view, the stand of the petitioners is misconceived. The moment petitioners defaulted in complying with any part of the order, as passed earlier, Bank was free to take action. There is nothing wrong in it.” 6. Now this writ petition has been filed by the petitioner stating that when he had paid off the entire amount of the housing loan the lease deed of the property pledged to the Bank for the said loan was to be returned to the petitioner, but the authorities are not returning it to the petitioner on the pretext that there are other three accounts which have not been cleared by the petitioner. 7. The said three accounts, as claimed by the respondents, is as follows: (i) Arun Kumar Bajoria-Account No.3752 with Rs.1,50,057.00 outstanding as on 31.12.2010 (ii) M/s S. Kumar & Sons-Account No.25575 with Rs.2,50,476.00 outstanding as on 22.02.2010 (iii) M/s Purshottam Das Shrawan Kumar -Account no.25533 with Rs.63,571.00 outstanding as on 18.12.2010 8. Learned counsel for the petitioner submits that first of the said accounts is generator loan Account No.3752 which has been - 5 - taken by him and he is ready to pay the same with interest any time this court directs him to pay. 9. With respect to the second account mentioned above learned counsel for the petitioner submits that it is business loan Account No.25575 and the same was granted by the respondents on the security furnished by M/s S. Kumar & Sons in the shape of fixed deposit worth Rs.2,60,000.00 and National Saving Certificates worth Rs.40,000.00 which is lying with the Bank and the Bank is entitled to take steps in that regard for recovery of the said amount. 10. With respect to the 3rd account mentioned above, learned counsel for the petitioner submits that it is also a business Account no.25533 of the father of the petitioner who is the proprietor of that firm and the entire stock of the firm which is presently worth more than Rs.5,00,000.00 is hypothecated to the respondent-Bank and the Bank can recover its dues from the stock. He further states that the proprietor of the said concern has filed CWJC No.15095 of 2010 with respect to the said account of the Bank which is pending in this Court. 11. Finally, learned counsel for the petitioner submits that the deed in question is with respect to the property which had been pledged only with respect to the housing loan of the petitioner and not with respect to any other loan mentioned above and hence the respondent-Bank is not justified in not handing it over to the petitioner on the plea of other loans in which the said document was not pledged. 12. On the other hand, learned counsel for the respondents-Bank vehemently opposes the contentions of learned counsel for the petitioner and submits that the settlement by Bank was - 6 - for all the four accounts. She further submits that the Bank waived a sum of Rs.8.62 lacs and settled the matter of housing loan only at Rs.7.75 lacs in view of the settlement that the amounts due in the other loan accounts would also be paid by the petitioner. She also avers that the High Court vide order dated 11.05.2010 (Annexure-2) sealed the package settlement of the Bank and the petitioner never objected to it and in spite of that he did not clear the said three loan accounts. 13. Learned counsel for the respondents claims that by the time order dated 29.09.2010 (Annexure-4) was passed by this court, the housing loan account was liquidated and hence the petitioner was directed to approach the Bank obviously for making full payment of the dues of the remaining three accounts, but the petitioner did not clear the said dues and hence the respondent-Bank was fully justified in not handing over the title deed in question to the petitioner. 14. Learned counsel for the respondents also states that fixed deposit receipts had already been appropriated in the year 2004 which is well within the knowledge of the petitioner and hence the loan account of M/s S. Kumar & Sons of about Rs.2.5 lacs could not be realised and hence the respondent-Bank is not handing over the title deed in question until the recovery of the said amount is made. 15. From the aforesaid facts and circumstances as well as from the materials on record and the averments made by learned counsel for the parties, it has to be first seen as to whether the aforesaid four accounts are in any way connected with each other or there had been any package settlement between the parties with respect to all the four loan accounts. - 7 - 16. Learned counsel for the respondent-Bank has relied upon Annexures-1 and 3 of the writ petition, but from the said letters issued by the respondents, it is quite apparent that the settlement amount of Rs.7,75,000.00 was only with respect to the housing loan of the petitioner and the said settlement had no concern with the other three loan accounts which were either generator loan or business loans of others. Furthermore, there is no document at all signed by the petitioner to show that he had made any such settlement or he had ever agreed to any suggestion for settlement made by the respondent-Bank. In the said circumstances, it is quite apparent that there has been no package settlement between the parties with respect to all the aforesaid four accounts. 17. The law is also well settled in this regard that each individual loan account is a non-performing asset individually and hence different account, even if of a single concern, cannot be clubbed up together to deny the benefits of the scheme of loan as accounts have to be settled individually. In the said circumstances, the Bank cannot hold the said title deed to be pledged for property mortgaged in one account because dues of other accounts had not been recovered. In this connection, reference may be made to two decisions of this court dated 29.03.2010 and 02.04.2010 passed in CWJC No.16084 of 2009 and CWJC No.522 of 2010 respectively. 18. From order dated 11.05.2010 (Annexure-2) passed in CWJC No.5285 of 2010 filed by the petitioner it is quite apparent that that Court had dealt the matter separately as the possession of the house in question was directed to be restored to the petitioner with respect to - 8 - the housing loan. So far the other three accounts, namely the two business loan accounts and one generator loan account are concerned, the Bank‟s request was noted that it should be liquidated within three months and for that the Bank was to make an offer and if the offer was not acceptable to the petitioner, the petitioner was given an opportunity to negotiate and if the petitioner failed to clear the said three accounts, the Bank was held to be free to take action in respect of the aforesaid three accounts as per the law. In this connection, it may be noted that to take action for recovery of loan in accordance with law the Bank has to take steps with respect to the assets pledged for the said loan account only and it cannot hold the document which was pledged for any other loan account as is clear from the aforesaid decisions of this Court. 19. Similarly, in order dated 29.09.2010 (Annexure-4) passed in CWJC No. 10397 of 2010 filed by the petitioner a Bench of this Court had also clearly considered the said facts and had held that the housing loan account stood closed. With respect to the other three accounts, namely business loan accounts and generator loan account, it was held that it would be open to the Bank to take any steps as it may be advised. The steps advised have to be in accordance with law and the Bank cannot violate any provision of law for taking any step for recovery of one loan account from the document pledged in another loan account. 20. In the aforesaid facts and circumstances, holding of a pledged document by the Bank, even though the loan amount, for which the said document was pledged, having been closed after full payment, cannot be held to be legal and proper and the authorities of - 9 - the Bank were duty bound to hand over the said document to the petitioner immediately after the said loan account was closed. 21. Accordingly, this writ petition is allowed and the respondents are directed to immediately hand over the deed of title which was pledged by the petitioner with the respondent-Bank for housing loan account of the petitioner immediately and in no case later than fifteen days from the date of receipt/production of a copy of this order. 22. So far the above mentioned generator loan account no.3752 is concerned, the petitioner, as per his undertaking, is directed to pay off the entire outstanding amount, which was for Rs.1,50,057 on 31.12.2010 with up to date interest within one month. 23. So far the other two business accounts bearing Account nos. 25575 and 25533 are concerned, the Bank will be at liberty to take all the necessary steps for recovery of the said account in accordance with law, subject to, of course, any order passed by this court in any other case, here in after. Sunil (S. N. Hussain, J.)