Bombay High Court
F.A. Construction vs Union Bank Of India (Earlier Known ... on 5 August, 2021
Bench: K.K. Tated, P. K. Chavan
15-WP-ST-14352-2021.doc
Shailaja
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION [L] NO.14352 OF 2021
M/s. F.A. Construction ] Petitioner
Vs.
Union Bank of India ]
(earlier known as Andhra Bank) ] Respondent
.....
Ms. Purvi Doctor a/w Ms. Pallavi Kulkarni, Ms. Shweta Rathod &
Kavya i/b Elixir Legal Services, for Petitioner.
None for the Respondent.
.....
CORAM : K.K. TATED &
PRITHVIRAJ K. CHAVAN, JJ.
DATE : 5 th AUGUST, 2021.
P.C.
1. Heard learned Counsel for the parties.
2. By this petition under Article 226 of the Constitution of
India, the petitioner is seeking direction against respondent-Union
Bank of India to release the mortgaged documents deposited in
respect of the loan availed by the petitioner as the same has been
repaid on 29th August, 2020.
SHAILAJA Digitally signed by
SHAILAJA SHRIKANT
SHRIKANT HALKUDE
Date: 2021.08.09
HALKUDE 15:40:53 +0530 1 of 7
15-WP-ST-14352-2021.doc
3. Ms. Doctor, learned Counsel appearing for the petitioner
submits that initially they had taken overdraft facility from Andhra
Bank. She submits that they cleared all the overdraft limits and
requested respondent-Bank to release the mortgage. She submits
that after payment of entire amount to Andhra Bank, Andhra Bank
merged with respondent-Union Bank of India. She submits that in
view of these facts, the petitioner through their Advocate had
written a letter dated 9th March, 2021 to Andhra Bank as well as
Union Bank of India for releasing those documents. She submits
that respondent-Bank through Advocate by their letter dated 6 th
April, 2021 declined to release those documents on the ground
that an account with Union Bank of India was declared as NPA.
4. In support of her contention, Ms. Doctor, learned Counsel for
the petitioner relied on paragraph 3 of the said letter which reads
thus;
"3.In view of the admitted position of my client has
already sanction the term loan to addressee No.2.
Under instruction of my client we, hereby
further reply to your notice dated 09-03-2021.
i)We are aware and know the said immovable
property is belong of addressee No.2.
(ii)We are also aware the addressee No.2 has taken
loan on said property and secured/mortgaging with
my client its Branch at Raheja Constriction "A", 24 th
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Road Opp. Khar Telephone Exchange, Khar-west
Mumbai.
"iii)It is true and correct that My client has given a
term loan/Overdraft facility dated 18/05/2017 its
Current Account No.11390100012303, with primary
securities of Mortgaging the property, plant and
machinery and other equipment as per the terms and
condition mention therein, from the Union Bank of
India (Earlier Andhra Bank), having its Branch at
Raheja Constriction "A", 24th Road, Opp. Khar
Telephone Exchange, Khar (West), Mumbai 400 052,
to addressee No.2".
iv)We are also aware the addressee No.2 has repaid
on dated 29-08-2020 part payment of
Rs.54,61,3343.85 in this current
No.11390100012303 at my clients Branch.
v)We are also aware that the addressee No.2 has
not paid and become due and payable, still
remains pending and due of the said N P A
accounts of the same Bank from other Branch i.e
Union Bank of India;
vi)As per of the Banking Regulation Act, 1949, and
the guideline, circulars of the My client Bank i.e
Union Bank of India, my client could not settled
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this said current account its No. 11390100012303
and return the mortgaged property, any documents
Since This above NPA accounts are of the same
Borrower i.e M/s. F.A. Construction (addressee
No.2) Loan amount is still due and payable. where
my client has not liable any claim or liability of the
addressee No.2.
we hope that good-sense will prevail upon you shall
immediately comply as directed above, thereby not
constraining our client to take coercive action
against you the addressee No.2 in accordance with
law".
5. Ms. Doctor, learned Counsel for the petitioner submits that
view taken by the respondent-Bank is not correct. She submits that
Bombay High Court in the matter of Surendra s/o Laxaman Nikose
Vs. Chief Manager & Authorised Officer, State Bank of India,
Nagpur, 2013 (5) Mh. L.J, 283 held that Bank cannot exercise it's
right of general lien over the title deeds deposited as security by
the petitioner in another account. Paragraph 12 of the said
judgment reads thus;
"12. It is also relevant to consider that
there was a relationship of employer and
employee between the parties. According to
the respondent-Bank, the petitioner who was
its employee had committed a fraud resulting
in monetary loss to the Bank, and for
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recovering the the said loss, it had filed a
civil suit. It is to be seen that the relationship
of Banker and Customer was independent of
the relationship of employer and employee.
The recovery that was sought to be made by
the respondent-Bank was in its capacity as an
employer who had been defrauded by its
employee. This is further clear from the
pleadings in aforesaid civil suit. It is not the
case of the respondent-Bank that aforesaid
lien was being exercised so as to safeguard
the amount of loan that remained due and
payable. In fact, the bank admits that the
loan amount has been fully received along
with interest. In such situation, it is not open
for the respondent Bank to continue to
exercise its general lien for the securities
deposited with it especially when it seeks to
recover the amount from the petitioner on
account of fraud committed by him on the
basis of the employer and employee
relationship. It is not in dispute that such a
general lien is not being exercised for a
general balance of account as required under
section 171 of the said Act. Further, it would
not be open for a bank to exercise its right of
general lien for the securities with it on
culmination of the banker and customer
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relationship. It cannot exercise such general
lien under section 171 as an employer
against an employee especially when such
employee who had borrowed the amounts
from the Banker had fully repaid the same. It
is thus, clear that there is no legal
justification on the part of the respondent-
Bank to retain said documents by relying
upon the provisions of section 171 of the said
Act".
6. On the basis of these submissions and authority, learned
Counsel for the petitioner submits that Respondent-Bank be
directed to release mortgage document in favour of the petitioner
immediately.
7. Ms. Doctor, learned Counsel for the petitioner submits the
respondent is duly served. In spite of service, none appeared on
behalf of the respondent when the matter is called out.
8. In view of these facts, following order is passed;
:ORDER:
(a) The petitioner is directed to re-serve the
respondent-Bank with a private notice by hand
delivery along with entire proceedings and copy
of order passed by this Court on or before 11 th
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August, 2021 stating therein that if time permits,
matter will be decided finally at the stage of
admission and file affidavit of service to that
effect.
(b) Matter to appear on board 13th August, 2021.
[PRITHVIRAJ K. CHAVAN, J.] [K. K. TATED, J.]
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