Allowed

Rahim Industries by Its Partners v. the Branch Manager

Karnataka HC1 Jul 2024WP/3323/2022

Case brief

AI extract

What is this about?

Borrowers paid full settlement amount offered by the Karnataka State Financial Corporation; despite pending RSA No.880/2013 the Corporation refused clearance certificates. Court held Corporation estopped and directed issuance within four weeks.

What did the court decide?

Respondent directed to issue Loan Clearance Certificate and Loan Closure Certificate within four weeks, subject to outcome of RSA No.880/2013.

Rahim Industries by Its Partners Vs the Branch Manager — Banking and Recovery | Karnataka HC (2024)

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NC: 2024:KHC:24563 WP No. 3323 of 2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1^ST DAY OF JULY, 2024 BEFORE

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THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.3323 OF 2022 (GM-RES)

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BETWEEN:

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RAHIM INDUSTRIES BY ITS PARTNERS

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MOHAMED DASTGIR S/O LATE T. ABDUL RAHIM AGED ABOUT 72 YEARS

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ABDUL KHUDUS S/O LATE T. ABDUL RAHIM AGED ABOUT 68 YEARS

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MOHAMMED HASHAM S/O LATE T. ABDUL RAHIM AGED ABOUT 63 YEARS

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Digitally signed by Vandana S Location: HIGH COURT OF KARNATAKA

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MOHAMMED ROUF S/O LATE T. ABDUL RAHIM AGED ABOUT 60 YEARS ALL ARE R/O OF NAYAKANAHATTI VILLAGE CHALLAKERE TALUK CHITRADURGA DISTRICT – 577 536.

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…PETITIONERS (BY SRI. SIDDAPPA B M, ADVOCATE)

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AND:

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THE BRANCH MANAGER KARNATAKA STATE FINANCIAL CORPORATION CHITRADURGA BRANCH NEAR BASAVESHWARA TALKIES CHITRADURGA – 577 501.

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…RESPONDENT

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(BY SRI. BIPIN HEGDE, ADVOCATE)

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2 - NC: 2024:KHC:24563 WP No. 3323 of 2022

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THIS W.P. FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE RESPONDENT TO ISSUE LOAN CLEARANCE CERTIFICATE AND LOAN CLOSURE LETTER IN PURSUANT TO THE REPRESENTATION GIVEN BY THE PETITIONERS DTD.21.12.2021 AND 14.01.2022 PRODUCED AS ANNEXURES – F AND H TO THE W.P.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP , THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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In this petition, petitioners seek the following reliefs:

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“(i) Issue a writ of mandamus or any other order or direction in the nature of writ directing the respondent to issue loan clearance certificate and loan closure letter in pursuant to the representation given by the petitioners dated 21.12.2021 and 14.01.2022 produced as Annexure – F & H to the writ petition.

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(ii) Cost and such other reliefs deems fit to grant under the circumstances of the case in the interest of justice and equity.”

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Heard learned counsel for the petitioners and learned

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counsel for the respondent and perused the material on record.

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Learned counsel for the petitioners invited my attention

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to the letter dated 13.06.2019 at Annexure – A issued by the respondent calling upon the petitioner to pay the entire sum of Rs.4,16,635/- towards full and final settlement of the loan availed.

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3 - NC: 2024:KHC:24563 WP No. 3323 of 2022

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It is submitted that in pursuance of the same, petitioners paid the entire sum to the respondent on 25.03.2021, who acknowledges the receipt of the same and the entire loan amount payable to the respondent has been cleared by the petitioners. It is the grievance of the petitioners that despite submission of several representations at Annexures – F and H dated 21.12.2021 and 14.01.2022, respondent has not issued Loan Clearance Certificate and Loan Closure Certificate in favour of the petitioners on the ground that RSA No.880/2013 is pending before this Court. It is therefore submitted that necessary directions may be issued to the respondent to issue Loan Clearance Certificate and Loan Closure Certificate, pursuant to the representations at Annexures – F and H submitted by the petitioners.

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Per contra, learned counsel for the respondent submits that in view of pendency of RSA No.880/2013, petitioner would not be entitled to Loan Clearance Certificate and Loan Closure Certificate.

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A perusal of the material on record will indicate that despite pendency of the aforesaid RSA No.880/2013 from the year 2013 onwards, the respondent has issued an offer for one time

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4 - NC: 2024:KHC:24563 WP No. 3323 of 2022

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settlement on 13.06.2019, which was complied with by the petitioner, who has paid the entire amount due to the respondent, who accepts the same without any objection whatsoever. Under these circumstances, the respondent is clearly estopped from citing the pendency of RSA No.880/2013 as a reason / excuse for nonissuance of Loan Clearance Certificate and Loan Closure Certificate and consequently, the present petition deserves to be disposed of by issuing necessary / proper directions to the respondent to issue Loan Clearance Certificate and Loan Closure Certificate in favour of the petitioners within a stipulated time frame.

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In the result, I pass the following:

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ORDER

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(i) The petition is hereby allowed .

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(ii) Respondent is directed to issue Loan Clearance Certificate and Loan Closure Certificate pursuant to representations at Annexure – F and H in favour of the petitioners within a period of four weeks from the date of receipt of a copy of this order.

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NC: 2024:KHC:24563 WP No. 3323 of 2022

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(iii) It is made clear that issuance of the aforesaid

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Loan Clearance Certificate and Loan Closure Certificate by the respondent in favour of the petitioners would be subject to the final outcome of RSA No.880/2013 and the same would be without prejudice to the rights and contentions of the parties.

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Sd/JUDGE

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List No.: 1 Sl No.: 66

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Rahim Industries by Its Partners v. the Branch Manager

Case brief

What is this about?

What did the court decide?

Rahim Industries by Its Partners v. the Branch Manager

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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