M/S.Housing And Urban ... vs Mr.K.Sri Ranga Prasad And Another
2021 Latest Caselaw 526 Tel

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

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.

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

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

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