Item No.3
THE HON'BLE THE CHIEF JUSTICE HIMA KOHLI
AND
THE HON'BLE SRI JUSTICE B. VIJAYSEN REDDY
WRIT APPEAL No.51 of 2021
JUDGMENT: (Per the Hon'ble the Chief Justice Hima Kohli)
1. The appellant/Housing and Urban Development Corporation
Limited (HUDCO) is aggrieved by the order dated 01.02.2021, passed
by the learned Single Judge allowing W.P.No.14075 of 2020 filed by
the respondents/writ petitioners.
2. The limited grievance of the respondents/writ petitioners in the writ petition was that the appellant/HUDCO had refused to release and return the original title documents offered by them in respect of the Housing Loan Account No.IHL-2067. It was the contention of the respondents/writ petitioners that though they had cleared the entire dues as payable in respect of the said loan, the appellant/HUDCO had refused to return the original title deeds of the immovable property that was mortgaged for advancing the loan. On its part, the appellant/HUDCO did not deny the fact that the entire loan amount in respect of File Loan Account No.IHL-2067 had been cleared by the respondents/writ petitioners. The plea taken was that it had advanced another loan of Rs.4,00,000/- to the respondents/writ petitioners against File Loan Account No.IHL-2253, which was still outstanding W.A.No.51 of 2021 Page 1 of 5 and if the interest is added, the amount due and payable would come to Rs.14,00,000/-, which has yet to be cleared. To substantiate the submission that the appellant/HUDCO is entitled to retain the title documents of the immovable property that was offered by the respondents/writ petitioners for taking the first loan, reliance was placed on Clause 2.11 of the Loan Agreement dated 17.05.2002.
3. Rejecting the contention of the appellant/HUDCO that it could claim any lien over the immovable property in respect of the first loan account, the learned Single Judge observed that once the respondents/writ petitioners had cleared the entire amount payable under the first loan account, there was no reason for the appellant/HUDCO to have withheld the title documents of the property which was offered as a security and simply because the respondents/writ petitioners had availed of another loan and had offered the title documents of another property to secure the said loan amount, cannot be a ground for it to retain the title documents of the property offered in respect of the first loan account. Aggrieved by the aforesaid order, the present appeal has been filed.
4. Mr. Sudarshan Reddy, learned counsel for the appellant/HUDCO draws the attention of this Court to Clause 2.11 of the Loan Agreement dated 17.05.2002 to urge that the learned Single Judge has failed to appreciate that the said clause not only refers to the loan, subject matter of Loan Agreement, but any other loan due for repayment.
W.A.No.51 of 2021 Page 2 of 5
5. Per contra, learned counsel for the respondents supports the impugned order and urges that once the entire amount payable in respect of the first loan account had been discharged by the respondents/writ petitioners, there is no good reason for the appellant/HUDCO to have retained the title deeds of the property offered as a security against the first loan account.
6. We have heard the learned counsel for the parties and perused the impugned order. We have also carefully examined the documents placed on record.
7. The entire issue raised by learned counsel for the appellant/HUDCO hinges on Clause 2.11 of the Loan Agreement dated 17.05.2002, which reads as follows:-
"2.11 Liability of borrower to be joint and several.
The liability of the borrower to repay the loan together with interest etc. and to observe the terms and conditions of this agreement/and any agreement/s, document/s that have been or may be executed by the borrower with HUDCO in respect of this loan or any other loan or loans is joint and several."
8. As can be seen from Clause 2.11 above, the same casts a twofold duty on the borrower. Firstly, it clarifies that the liability to repay the loan amount together with interest shall remain that of the borrower who shall repay the same or any other loan together with interest, whether in joint or several capacity. Secondly, the borrower W.A.No.51 of 2021 Page 3 of 5 is enjoined upon to abide by the terms and conditions of any agreement that has been executed or may be executed with HUDCO, in respect of the loan taken, either jointly or severally. We are afraid, Clause 2.11 cannot be invoked by appellant/HUDCO to retain the title deeds offered by the borrower in respect of a particular loan account even after the same stands fully discharged. More so, when a second loan account of the same borrower has been secured separately by offering title deeds of another immovable property. Thus, the expansive interpretation sought to be given by the learned counsel for the appellant/HUDCO to the words "any other loan", is untenable.
9. We have enquired from learned counsel for the respondents/writ petitioners, if his clients are proposing to repay the amount payable in respect of the second loan account and have been informed that the respondents propose to repay a sum of Rs.14,00,000/- (approximately) to the appellant/HUDCO within a period of two months. It is further submitted by learned counsel for the respondents/writ petitioners that against the second loan advanced by the appellants/HUDCO, the respondents/writ petitioners had offered another immovable property worth Rs.19,00,000/- as security, title deeds whereof are in the possession of the appellant/HUDCO.
10. In view of the aforesaid submission made by learned counsel for the respondents/writ petitioners and having perused the terms and conditions of the Loan Agreement dated 17.05.2002, we are in complete agreement with the observations made by the learned Single W.A.No.51 of 2021 Page 4 of 5 Judge that merely because the respondents/writ petitioners had availed of a second loan at a later date for which a separate set of documents were executed and title deeds of another immovable property were offered as security to the appellant/HUDCO, it would not be a ground for the appellant/HUDCO to withhold the title deeds of the property that was offered by the respondents/writ petitioners for the first loan account, particularly when the said loan account stands completely discharged.
11. As a result, the present appeal is dismissed in limine as meritless along with the pending applications, if any.
______________________________ HIMA KOHLI, CJ ______________________________ B. VIJAYSEN REDDY, J 24.02.2021 vs W.A.No.51 of 2021 Page 5 of 5