RAJAN SETH Vs. UCO BANK

JUDGEMENT

(1.) WHETHER a company or a Bank or for that matter any lender can retain the title deeds deposited with the lender for obtaining the loan even after the loan has been repaid when such borrower is also guarantor of some other borrower who has taken loan from the same lender? The said question has arisen in the present case.

(2.) THE complainant had deposited his title deeds of the property with the respondent Bank for obtaining a certain sum of loan. Suffice it to say that the loan was repaid. However, the complainant had stood guarantor for M/s. Kingsway Shoppe owned by Ranjana Seth wife of Rakesh Seth when the said Kingsway Shoppe had obtained loan from the same Bank. The Bank having refused to release the title deeds after the complainant s loan stood repaid, he filed a complaint before the District Forum which held that since the complainant had stood personal guarantor for repayment of loan obtained by M/s. Kingsway Shoppe from the same Bank, this was to secure the Bank that in case Kingsway Shoppe fail to repay the loan, the Bank could recover from the personal guarantor from his property of which the title deeds had been deposited.

(3.) AFTER the dismissal of the complaint, the present appeal has been filed. The same arguments have been urged by the learned Counsel for the appellant that the title deeds which had been deposited for his personal loan could not be retained by the bank towards another loan obtained by M/s. Kingsway Shoppe. After hearing Counsel for the appellant, we are of the view that since there was something in hand belonging to the guarantor i.e., title deeds, the Bank could retain the same and appropriate it by sale of property etc. in case the borrower i.e., Kingsway Shoppe failed to return the loan as per the stipulated terms. The Bank need not in that eventuality first rush to the guarantor and then find out what property he had for realising the decretal amount, if any. It is something akin to attachment before decree. The Bank deals with public money and we should see to it that the loan that the Bank disburses, its payment is secured. No other point has been urged.