Sri Nagendra Prasad vs The Manager, State Bank of Mysore, The Manager, Corporation Bank and The Manager, Syndicate Bank

A.S. Bopanna, J.—The petitioner is before this Court seeking for issue of mandamus to direct the first respondent to release the title deeds of the petitioners house property bearing Khatha No. 28, Site Nos. 1, 2 and 3, Ward No. 55 of Bangalore Mahanagara Palike situate at Ittamadu Village, Uttarahalli Hobli, Bangalore North Taluk. The petitioner had offered himself as a guarantor in respect of the loan advanced by the first respondent in favour of Sri V.S. Krishna Murthy and his wife Smt. M.K. Geetha in the year 2004. The said Sri V.S. Krishna Murthy and his wife are also stated to have offered their immovable property as security for the loan obtained by them. Subsequently, the petitioner has purchased the property in question under the sale deed dated 30.06.2005 from one Sri. Munindrachari. In respect of the said transaction, the petitioner had approached the first respondent for finance and the same has been cleared. It is in that circumstance, the petitioner is seeking return of the title documents which had been deposited with the first respondent in respect of his own financial transaction and not as a guarantor for discharge of the loan advanced by the first respondent to Sri V.S. Krishna Murthy.

It is also to be noticed that the petitioner has subsequently sold the property in favour of Smt. B.P. Bharathi under the sale deed dated 01.07.2013. At an earlier point, the petitioner had also deposited a sum of Rs. 16,00,000/-. At that juncture, when the said amount of Rs. 16,00,000/- was sufficient to discharge the extent of the amount said to be due from Sri V.S. Krishna Murthy to the first respondent-Bank, the petitioner had approached the Branch of the first respondent-Bank for release of the documents. The Branch of the first respondent-Bank had addressed a communication dated 12.04.2013 (Annexure-D) to the Assistant General Manager. The contents of the said letter are relied on by the petitioner to contend that the first respondent-Bank had in fact taken note of all these transactions and a decision was only required for the purpose of returning the title deeds of the petitioner. In that view, it is contended that the respondents are not justified in holding on to the documents.

The first respondent has filed the objection statement. The claim put forth by the petitioner for the purpose of release of the documents is being opposed. It is contended that though the property by itself had not been offered as a security, the fact that the petitioner stood as a guarantor to the loan advanced to Sri V.S. Krishna Murthy is not disputed by the petitioner and therefore, it is contended that when the first respondent has already secured a decree in their favour from the Debts Recovery Tribunal and the same is in the process of execution, the first respondent cannot release the documents inasmuch as the first respondent had a general lien over the said documents as well until the loan is cleared. It is therefore contended that the prayer made in the petition is liable to be rejected.

The respondents No. 2 and 3 though have been granted time have not filed their statement of objections to point out the manner in which the petitioner remains liable to them or their entitlement to the documents.

In the light of the above, the undisputed fact is that the petitioner had stood as a guarantor in respect of the loan which had been advanced to Sri V.S. Krishna Murthy by the first respondent. In that regard, since the said Sri V.S. Krishna Murthy had not repaid the loan, the first respondent bank had also initiated proceedings in the Debts Recovery Tribunal in O.A. No. 179/2008 and the same has been decreed in favour of the first respondent. For recovery of the said amount, the first respondent has already initiated the proceedings before the Recovery Officer in DCP No. 5658 in O.A. No. 179/2008. Since, the process therein has not yet been completed, the first respondent contend that the documents of the petitioner cannot be released.

Insofar as the general lien of the bankers, there cannot be any dispute inasmuch as the learned counsel for the respondents has relied on the decision of the Hon''ble Supreme Court in the case of Syndicate Bank Vs. Vijay Kumar and others, and a decision of this Court in the case of Smt. K.S. Nagalambika Vs. Corporation Bank and Another, . If the position of law as enunciated therein is kept in view, considering the fact that the petitioner is a guarantor in respect of the loan advanced by the first respondent to Sri V.S. Krishna Murthy and since the documents relating to the property which belong to the petitioner is available with the first respondent, notwithstanding the fact that the property has been sold by the petitioner, the first respondent-Bank would be entitled to hold on to the same till the loan advanced to Sri V.S. Krishna Murthy is cleared by way of general lien though that itself was not offered as security.

Though the petitioner has relied on the communication dated 12.04.2013, the said communication is only in the nature of the approval that had been sought by the Branch Manager from the Higher Authorities. Since, no decision on the same has been taken and the result of the same had not been conveyed to the petitioner, the request made by the Branch has not resulted in right being created in favour of the petitioner.

Be that as it may, when the recovery proceedings against the borrower is in progress and the petitioner is the guarantor in respect of the first respondent, insofar as the said loan, the petitioner would have to await the conclusion of the proceedings in DCP No. 5658 in O.A. No. 179/2008. The property belonging to Sri V.S. Krishna Murthy is sought to be auctioned in the said proceedings for the purpose of recovery of the loan advanced to him. To the said extent of the petitioner contending that no progress is being made in the said proceedings, certainly the petitioner would be justified in complaining inasmuch as the respondents would have to see that the said proceedings is completed in an expeditious manner and the manner of recovery from Sri V.S. Krishna Murthy is to be determined therein so that the liability of the petitioner would stand discharged and thereafter the question of release of the documents would arise.

Therefore, since the petitioner has also been notified in DCP No. 5658/2009 in O.A. No. 179/2008, the petitioner is granted liberty to file a copy of this order before the Recovery Officer and seek for expeditious disposal of the proceedings in relation to the recovery proceedings against Sri V.S. Krishna Murthy initially by selling the property belonging to Sri V.S. Krishna Murthy. To the said extent, on the order being produced before the Recovery Officer, the Recovery Officer shall take all steps forthwith and the sale of the property belonging to Sri. V.S. Krishna Murthy be completed in an expeditious manner, but not later than three months from the date of furnishing a copy of this order. On conclusion of the said proceedings, if the amount realized therein satisfies the liability due to the first respondent towards the loan advanced to Sri V.S. Krishna Murthy, the first respondent would thereafter take immediate steps for return of the original title deeds to the petitioner. As already noticed, since the respondents No. 2 and 3 have not placed any material before this Court to indicate the liability of the petitioner towards any loan due to them or as a guarantor in respect of any transaction, the respondents No. 2 and 3 would not be entitled to any relief against the petitioner and they shall not be in a position to hold on to the documents belonging to the petitioner.

In terms of the above direction, the petition stands disposed of.