KAMLESH GANDHI Vs. UNION BANK OF INDIA

JUDGEMENT

(1.) Some time in 1997 the First Respondent, Union Bank of India granted credit facilities at its Mumbai Samachar Marg branch to a partnership firm by the name of Jivanlal and Sons. The two partners of the firm at the material times were an HUF called Kamlesh Gandhi of which the Petitioner is the Karta and the wife of the Petitioner. The firm had availed of these credit facilities which were secured by personal guarantees executed by the Petitioner and his wife. On 31 May 2007, the account of the partnership firm was classified as an NPA. The First Respondent instituted proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 by filing Original Application No. 28 of 2008 before the Debts Recovery Tribunal for the recovery of an amount of Rs. 30,06,17,891.66 together with interest in respect of the outstanding dues towards the partnership firm. The First Respondent also initiated proceedings under the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002. Certain recoveries were effected upon the sale of secured assets. According to the Bank, as on 21 June 2011 an amount of Rs. 23.78 crores is due and payable.

(2.) On 30 May 2006, the Petitioner availed of a Housing Loan from the Retail Mart of the First Respondent in the amount of Rs. 20 lakhs. The loan payments were in arrears despite letters dated 15 March 2008 and 26 March 2008 by the bank. On 14 February 2011 a letter was addressed by the Petitioner to the Manager of the First Respondent seeking an NOC for the sale of a residential flat. On 15 February 2011, the First Respondent through its Retail Mart addressed a letter to the Petitioner stating that it had no objection to the sale of the residential flat, Flat 708 at Tilak Nagar, H.P. Employees Co-operative Housing Society, Chembur. The flat was mortgaged in favour of the First Respondent by deposit of title deeds. The Bank by its letter informed the Petitioner that the outstanding dues under the loan account were Rs.19,12, 247/- and that it held the original share certificate pertaining to the flat in its possession. On 13 April 2011, the Petitioner entered into an agreement for sale of the flat with the Fifth and Sixth Respondents for a consideration of Rs. 45 lakhs. The Fifth and Sixth Respondents obtained a loan from the Fourth Respondent, Bharat Cooperative Bank. On 25 May 2011, the First Respondent informed the Fourth and Fifth Respondents that the outstandings in respect of the Housing Loan were in the amount of Rs. 18,10,310/-. The Fourth Respondent under cover of its letter dated 26 May 2011 addressed to the First Respondent forwarded a pay order of Rs. 18,10,310/- towards a full and final payment of the Housing Loan. The Fourth Respondent accordingly, upon payment of the amount, requested the First Respondent to close the account releasing the title deeds and to cancel its lien/charge over the property and issue a No Dues Certificate. By a letter dated 11 June 2011, the Fourth Respondent informed its constituents, the Fifth and Sixth Respondents, that the First Respondent had refunded the amount of Rs. 18,10,310/- on 7 June 2011 on the ground that the Petitioner is a defaulter of the Bank and legal proceedings were initiated for the recovery of its dues. Accordingly, the amount received was adjusted to the housing loan, which was taken by the Fifth and Sixth Respondents and the account was closed.

(3.) The petition under Article 226 of the Constitution has been instituted essentially in order to seek performance of the agreement which the Petitioner claims to have been arrived at with the First Respondent as reflected in the First Respondent's letter dated 15 February 2011. Prayer (a) in the petition is to challenge a letter of the First Respondent dated 11 June 2011, refunding an amount of Rs.18,10,310/- received by the First Respondent towards liquidation of the outstanding amount due from the Petitioner under Housing Loan Account. The other reliefs which are sought in the petition, which are essentially to complete the cause of action are: (i) A direction to the Fourth Respondent to forward a demand draft in the amount of Rs. 18,10,310/- to the First Respondent; (ii) A direction to the First Respondent to accept the pay order issued by the Fourth Respondent and to appropriate it towards the outstanding dues of the Petitioner under the Housing Loan Account; (iii) A direction to the First Respondent to issue a No Dues Certificate to the Petitioner, to cancel its lien over the flat and to hand over the title documents to the Fourth Respondent; (iv) A direction to the Fourth Respondent to grant a housing loan to the Fifth and Sixth Respondents on the same terms and conditions as earlier granted.