AKINNA SRINIVASA CHOWDARY Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) This writ petition has been filed under Article 226 of the Constitution of India for the following relief:

(2.) The case of the petitioner, in brief, is that, the petitioner obtained a loan from 3rd respondent bank under Kisan Credit Card facility, called as 'KCC' to a tune of Rs.1,99,00,000.00 by way of registered mortgage by depositing his title deeds regarding pledged properties as well as of that of his relatives as collateral security. The 2nd respondent banker had credited Rs.1,90,00,000.00 only instead of Rs.1,99,00,000.00 to the petitioner's overdraft account. The petitioner had cleared the loan to the 3rd respondent bank in regular instalments and the loan tenure was completed on 17/4/2020 and loan closure proceedings were initiated by the banker as was evident from the loan statement. The respondent Nos. 2 and 3 did not issue the loan closure letter to the petitioner, even though the loan was cleared. In the CIBIL website, it is showing as if the loan was still pending and the respondent Nos. 2 and 3 did not choose to discharge the mortgage charge and they have kept the petitioner's agricultural lands to an extent of Ac.4-41 cents in their mortgage, despite of several requests made by the petitioner through email communication and registered post. Aggrieved by their inaction, the petitioner filed W.P.No.35439 of 2022 wherein this Court granted interim direction to the respondent Nos. 2 and 3 to discharge the mortgage charge over the property, as the petitioner had cleared the loan long back. Pursuant to the said orders dtd. 4/1/2023, the respondent Nos. 2 and 3 released the mortgage charge on the mortgaged property by executing discharge receipt vide document No.P525 of 2023 on the file of the Joint Sub Registrar, Rajahmundry, on 2/2/2023. Thereafter, to the email communication sent by the petitioner to release his property documents covered under discharge deed; the authorized person of the bank had replied that they had filed detailed counter in W.P.No.35439 of 2022. Further stating that the petitioner being a partner in M/s Cherukuri Veerraju and others, stood as a guarantor to KCC loan sanctioned to Cherukuri Veerraju. The said Cherukuri Veerraju had defaulted the payment and the petitioner and other guarantors of the firm are jointly and severally liable to the said debts. Thus, the bank, by exercising its contractual and statutory right to lien on title deeds deposited by the petitioner for due discharge of the loan amount. The Writ Petition vide W.P.No.35439 of 2022 was disposed of on 5/7/2023 as the same is confined only with regard to discharge of registered mortgage.

(3.) The respondent Nos. 2 and 3 filed their counter-affidavit denying the averments of the petition, inter alia contending that, the reliefs sought stem from a private and/ or contractual dispute and hence the writ petition is not maintainable. The respondent Bank is a non-statutory body, incorporated under the Companies Act, 1956 and the Banking Regulation Act, 1949, neither is there a statutory nor a public duty imposed on it by a statue, nor any involvement of public law and further the respondent Bank does not receive any funds from the Government. There are umpteen judgments of the Hon'ble Supreme Court that private bodies not performing any public duties are not amenable to writ jurisdiction. Further, the writ jurisdiction of High Courts has been regulated by judicial pronouncements so as to avoid interference in matters where alternative remedies are available and also where the dispute is purely of a private nature having no public law element. The petitioner has not exhausted the effective and efficacious alternate remedy available. Therefore, the writ petition is not maintainable. The petitioner had obtained Kisan Credit Card Loan for an amount of Rs.1,99,00,000.00 by providing three properties as collateral security by way of registered mortgage in favour of the respondent bank. The petitioner had repaid the said KCC loan by making final payment on 7/11/2020. Thereby, the charge of mortgage over three mortgaged properties has got extinguished and the respondent bank had closed the petitioner's KCC loan account and arranged to release charge of mortgage from Sub Registrar Office in respect of Second and third mortgaged properties by executing release deed and accordingly charge over the second and third mortgage property has been released on 21/1/2022. When the respondent bank offered to the petitioner to execute release the charge of mortgage over the first mortgaged property belonging to the petitioner, the petitioner refused to cooperate, as the bank had exercised general lien and specific lien over the title deeds of the said property. The lien was exercised as the petitioner was liable to pay the outstanding dues payable to the bank in KCC loan sanctioned to one Cherukuri Veerraju. The petitioner is one among the 10 others who had stood as guarantors to the facility sanctioned to the said Cherukuri Veerraju. All the partners including the petitioner had executed an authority letter authorizing its Managing partner Cherukuri Veerraju to execute necessary documents, mortgaged its properties and executing guarantee deed on behalf of the firm. The KCC loan of Cherukuri Veerraju turned into Non Performing Account (NPA) on 3/5/2018 due to default in payment. The respondent bank has initiated recovery proceedings under Securitization and Asset Reconstruction of Financial Asset and Enforcement of Security Interest Act (SARFAESI Act) and filed application 14 of the Act vide Crl.M.P.no.83 of 2019 praying for appointment of Advocate Commissioner to take possession of the properties mortgaged by Cherukuri Veerraju and others. Due to oversight, instead of petitioner, one Muni Koteshwara Rao' was arrayed as party therein. Aggrieved by initiation of proceedings under SARFAESI Act, the petitioner had filed SA No.288 of 2019 before DRT, Visakhapatnam under Sec. 17 of the Act, wherein he clearly admitted that he is a partner in Cherukuri Veerraju and others and that his father's name has been included wrongly by the respondent bank. In the proceedings in O.A.No.824 of 2018 also, the petitioner's father name was included instead of the petitioner. Later, as per interim orders, the respondent bank got the order of the Chief Judicial Magistrate, Rajahmundry amended by getting the petitioner's name included. However, as O.A.No.824 of 2014 before Debt Recovery Tribunal, Visakhapatnam was allowed by then, the bank had taken up steps to substitute the petitioner's name with that of his father and the same is pending adjudication. To the letter addressed by the petitioner requesting the bank to release the title deeds of the first mortgaged property, the bank had sent reply calling upon the petitioner to repay the due payable by Mr.Cherukuri Veerraju towards his KCC loan in the capacity of guarantor. To another letter addressed by the petitioner, the bank had replied calling upon the petitioner to pay dues to enable the respondent to lift general lien exercised on title deeds of his first mortgaged property. The petitioner is only claiming that he is not a party to the Original Application filed by the respondent Bank vide O.A.No.824 of 2018 before DRT, but he never denied that he was not a guarantor. The respondent bank has exercised specific lien by Loan agreement executed by the petitioner and Right to general lien as available to Banker under Sec. 171 of Indian Contract Act, 1872. The petitioner, in the capacity of being a partner in M/s. Cherukuri Veerraju and Others, which stood as guarantor to KCC loan sanctioned to Cherukuri Veerraju, is jointly and severally liable for the said debts along with the principal borrower and other partners of the guarantor firm. The liability of the petitioner, being partner of guarantor firm, is coextensive with that of a borrower. The respondent has exercised its contractual and statutory right of lien on title deeds deposited by the petitioner. The contention of the petitioner that the original title deeds of the petitioner's land is in wrongful custody of the respondent is incorrect and baseless. There are no merits in the writ petition. Accordingly, the writ petition is liable to be dismissed.