Dismissed

D.P.Sharath v. Idbi Bank Ltd.

Madras HC18 Sept 2024WP/15358/2023

Case brief

AI extract

What is this about?

The petitioner sought return of title deeds after pre-closing his personal loan, but the bank retained them as security for loans availed by a company where the petitioner is a director. The Court dismissed the petition, holding that the bank cannot return the deeds until the company's dues are settled.

What did the court decide?

Petition dismissed with liberty to prefer one-time settlement. Bank directed to return title deeds only after entire loan amount is settled.

D.P.Sharath Vs Idbi Bank Ltd. — Banking and Recovery | Madras HC (2024)

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W.P.No.15358 of 2023

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 18.09.2024

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CORAM

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THE HONOURABLE MR.JUSTICE M. DHANDAPANI

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W.P.No.15358 of 2023 & WMP.No.32147 of 2023 & WMP.No.14898 of 2023

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D.P. Sharath ... Petitioner

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Vs.

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IDBI Bank Ltd., represented by its Assistant General Manager, Retail Asset Centre, No.44/86, First Floor, Fourth Avenue, Ashok Nagar, Chennai 600 083. 2. IDBI Bank Ltd., represented by the Deputy General Manager, Greams Road Branch, No.37, PM Towers, Greams Road, Chennai 600 006. 3. Shankar Karikar 4. Chitra Vasudevan (R3 and R4 are impleaded as per the order of this Court dated 18.09.2024 made in WMP.Ns.35517/2023 and 28596/2024 in WP.No.15358 of 2023) .... Respondents

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Writ Petition filed under Article 226 of the Constitution of India for 1 of 8

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https://www.mhc.tn.gov.in/judis

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W.P.No.15358 of 2023

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issuance of Writ of Mandamus to direct the 1^st respondent to return the original title deeds deposited by the petitioner with the 1^st respondent as security for the mortgage loan granted to him vide Loan Acc.No.1053675100000620 and Loan Acc.No.1654675100004282 in the 1^st respondent bank and which has been fully discharged by pre-closure on 27.02.2023.

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For Petitioner : Mr. S. Subramanian For Respondents : Mr.Ravikiran

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ORDER

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The petitioner has filed the present writ petition to direct the 1^st respondent to return the original title deeds deposited by the petitioner with the 1^st respondent as security for the mortgage loans availed by him with the 1^st respondent bank since the same has been fully discharged by preclosure on 27.02.2023.

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The petitioner availed loan from the 1^st respondent Bank by

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mortgaging the property comprised in D.No.17, Flat A & B, Seethala

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2 of 8

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https://www.mhc.tn.gov.in/judis

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W.P.No.15358 of 2023

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Jawaharlal Nehru Street, Puducherry and thereafter on 27.02.2023, by issuing a cheque dated 27.02.2023, he foreclosed the loan amount, thereby he discharged the loan amount fully. The first respondent has also by letter dated 27.02.2023, intimated the petitioner about the discharge of the loan dues and also undertook to return the original title deeds deposited by him with the 1^st respondent for creating equitable mortgage within 15 days. However, the 1^st respondent did not return the title deeds to the petitioner. When the petitioner enquired about the same with the 1^st respondent, he was informed that M/s D.P.Foam Pvt. Ltd has also offered the abovesaid property as a collateral security for the loan obtained by the abovesaid company, in which, the petitioner was also an Executive Director and in view of the same, the Title Deeds were transferred to the 2^nd respondent.

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The learned counsel for the petitioner submitted that it is the grievance of the petitioner that the 2^nd respondent, by its letter dated 08.01.2016 has modified the terms of sanction, by which, sale of disputed property is subject to the closure of the mortgage loan standing in petitioner's name and the same has been accepted and approved by the 2^nd 3 of 8

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https://www.mhc.tn.gov.in/judis

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W.P.No.15358 of 2023

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respondent, which fact, would clearly show that the said property is not a security at all in any form for the loans due from M/s. D.P. Foam Pvt. Ltd. Thus he prayed for issuing direction to the 1^st respondent to return the original title deeds deposited with the respondent bank.

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The learned counsel appearing for the respondents 1 and 2 submitted that the petitioner claims that he already pre-closed the loan amount which was borrowed by him with the bank under the above loan accounts. The petitioner is one of the directors of M/s.D.P.Foam Private Limited and the above said company availed loan from the Bank to the tune of Rs.7,25,00,000/- and by way of fresh sanctions/modification of sanction letters dated 28.09.2013, 11.07.2015, 24.08.2015, 17.10.2017 27.03.2019, 04.3.2020, 29.06.2020 and restructured on 07.08.2021, two properties were mortgaged by the company as collateral security and one of such property is the subject property of this writ petition.

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He further submitted that apart from that, the company again

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availed a loan to the tune of Rs.99,50,000/- from the respondent bank on 4 of 8

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https://www.mhc.tn.gov.in/judis

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W.P.No.15358 of 2023

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30.12.2016 by depositing title deeds of the subject property of the writ petition by way of creating additional mortgage in respect of same property under Document No.21355 of 2022. Though petitioner has foreclosed the loan availed under document No.21355 of 2022, the property is continuing as security for the business loans availed by him in the capacity of Director of the company, as early as in the year 2010 and unless and until, all the dues are settled by the company, the bank could not return the original title deeds of the subject property. Therefore, he prayed for dismissal of this writ petition.

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Heard the learned counsel appearing for the petitioner and the learned Counsel appearing for the respondents.

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It is not in dispute that the petitioner availed loan by creating equitable mortgage deed in respect of property comprised in D.No.17, Flat A & B, Seethala Jawaharlal Nehru Street, Puducherry and foreclosed the same on 27.02.2023. It is seen that on 07.08.2021, the company namely M/s.D.P.Foam Private Limited, in which, the petitioner is a director, availed 5 of 8

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https://www.mhc.tn.gov.in/judis

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W.P.No.15358 of 2023

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loan from the respondent Bank and after restructuring the credit facilities, the disputed property was given as collateral security for the company's over all credit facilities. Thus, it is seen that unless the company discharges the credit facilities availed by it on 07.08.2021, the petitioner is not entitled to return of the title deeds of the subject property. Hence, the prayer seeking discharge of title deeds cannot be granted by this Court.

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In view of the above, this writ petition is dismissed with liberty to the petitioner to prefer onetime settlement with the bank. If the entire loan amount is settled, the respondent Bank is directed to return the original title deeds of the subject property to the petitioner. No costs. Consequently, the connected miscellaneous petitions are closed.

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18.09.2024

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msr Index: yes/no Internet:yes/no

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1.The Assistant General Manager, IDBI Bank Ltd.,

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6 of 8

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W.P.No.15358 of 2023

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Retail Asset Centre, No.44/86, First Floor, Fourth Avenue, Ashok Nagar, Chennai 600 083.

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The Deputy General Manager, IDBI Bank Ltd., represented by Greams Road Branch, No.37, PM Towers, Greams Road, Chennai 600 006.

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M. DHANDAPANI, J.

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msr

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7 of 8

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https://www.mhc.tn.gov.in/judis

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W.P.No.15358 of 2023

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W.P.No.15358 of 2023 & WMP.No.32147 of 2023 & WMP.No.14898 of 2023

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18.09.2024

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8 of 8

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https://www.mhc.tn.gov.in/judis

D.P.Sharath v. Idbi Bank Ltd.

Case brief

What is this about?

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D.P.Sharath v. Idbi Bank Ltd.

Case brief

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