RAJESH SHANKAR,J. - (1.) The present writ petition has been filed for issuance of direction upon the respondent to return the original collateral securities deposited by the petitioner for securing the loan advanced by the respondent-Bank.
(2.) The factual background of the case, as stated in the writ petition, is that the petitioner-firm availed loan for running its business. Subsequently, the loan account became irregular and was classified as NPA, pursuant to which the Bank took action by issuing notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [hereinafter referred to as 'the SARFAESI Act'] as well as under Section 13(4) of the SARFAESI Act for taking over the possession of the mortgaged assets. The petitioner offered a sum of Rs. 20 Lakhs as full and final settlement of the entire loan amount and the said offer was approved by the competent authority of the respondent-Bank which was duly communicated to the petitioner in terms with the letter dated 28.12.2016 and it was agreed by the petitioner that the entire sum would be paid by 27.03.2017. In terms of the settlement, the petitioner paid the entire sum to the Bank and made a representation dated 01.03.2017 requesting, inter alia, for release of the collateral securities deposited with the Bank by way of mortgage and for withdrawal of action under SARFAESI Act, however, the same has not been returned till date which gives rise to filing of the present writ petition.
(3.) The learned counsel for the petitioner submits that in spite of the fact that the petitioner-firm has deposited the entire compromise/settlement amount of Rs. 20 Lakhs within the stipulated time, the respondent-Bank has not released the collateral security of the petitioner on the ground that one company, namely, M/S Lucky Rice Mill Pvt. Ltd. has failed to deposit its compromise/settlement amount within the stipulated time. The petitioner has nothing to do with M/S Lucky Rice Mill Pvt. Ltd., inasmuch as, the petitioner as well as M/s Lucky Rice Mill Pvt. Ltd. are separate legal entities having no co-relation with each other except the fact that one of the Directors of M/S Lucky Rice Mills Pvt. Ltd. is also the partner of the petitioner-firm who stood as guarantor before the Bank for the loan advanced in favour of M/S Lucky Rice Mills Pvt. Ltd. There is no provision under the SARFAESI Act which precludes a guarantor to give his guarantee only in one firm/company. If one partnership firm has failed to liquidate the dues of the Bank in terms of compromise/settlement, the Bank has no right to retain the original documents of the loan account in which the entire payment has been made by the firm only on the pretext that one of the partners as well as the guarantors of the loan has also given his guarantee in another loan account. It is further submitted that the objection of the Bank in releasing the security of the petitioner is beyond the scope and ambit of the Contract Act. The respondent-Bank has no right to retain the collateral securities despite payment of the entire settlement amount only due to the reason that one of the partners of the petitioner-firm is also the Director of another company which could not make payment of the settlement amount in terms of the settlement arrived at with the respondent-Bank. It is further submitted that in the case of another firm i.e. M/S Sai Packers, after deposit of the compromise amount, the respondent-Bank has already issued 'No Dues Certificate' and the release of collateral security is in process. In support of the petitioner's contention, the learned counsel for the petitioner puts reliance the judgment of the Hon'ble Supreme Court rendered in the case of Zonal Manager, Central Bank of India v. M/S Devi Ispat Ltd. and Ors. (Civil Appeal No. 6077 of 2010) .;