THREAD AND NEEDLES Vs. CANARA BANK

JUDGEMENT

(1.) The petitioners are invoking the extra-ordinary jurisdiction of this Court by instituting the present writ petition under Article 226 of the Constitution of India, 1950, seeking the following reliefs:

(2.) Briefly stated, petitioner no.1 which is a proprietorship firm approached respondent no. 2 Bank for financial facilities in the nature of working capital credits, which were allowed in the year 2019 and which were lastly renewed on 27/2/2023. It is admitted case of the parties that they paid the entire outstanding loan amount in respect of such credit facilities in November, 2023. The petitioners then wrote two emails dtd. 4/12/2023 and 15/12/2023 requesting the respondent no.2 to issue a 'no objection certificate' and release the title documents of the subject property. However, the petitioners were informed that though both the loan accounts against which the title documents of the property being land which is part of Khewat No. 522, Khata No. 589, Killa No. 40//15/2/3 (0-7), 16/1(1-5), Waka Moja Ferozpur Bangar, Tehsil Kharkhoda, Distt Sonipat ["Subject Property"] was deposited as collateral security, have been fully discharged but title deeds cannot be released in view of instructions given by the respondent no. 1 to retain the said title deeds by treating it as general security for the purposes of recovery of amounts due against another loan account in the name of M/s Thread and More India (Partnership firm) maintained with the respondent no. 1 at Delhi.

(3.) It is the case of the petitioners that the above-mentioned property was not given as security towards the loan account i.e. M/s Thread and More India. It is stated that previously, M/s Threads and More India had approached erstwhile Syndicate Bank now Canara Bank for a Term Loan of Rs.50,00,000.00 wherein Mr. Amit Garg, proprietor of the petitioner no.1 stood as a guarantor and erstwhile Syndicate Bank now Canara Bank sanctioned the said loan of Rs.50,00,000.00 on 17/3/2018. It is stated that the property in question was never given as a collateral security towards the said repayment of the said loan facility and the security created against the said loan account was only in the form of hypothecation of machines to be purchased out of said loan proceeds.