Kotak Mahindra Bank Ltd v. Bank Baroda and Anr

RAJIV SAHAI ENDLAW, J. JANUARY 28, 2016 Bs..

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 28th January, 2016. + W.P.(C) 9828/2015 KOTAK MAHINDRA BANK LTD. ..... Petitioner Through: Mr. Sumit Bansal, Mr. Ateev Mathur, Ms. Richa Oberoi and Mr. A.P.S. Sehgal, Advs. Versus BANK OF BARODA AND ANR ..... Respondents Through: Ms. Priyadarshini Verma, Adv. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. The petition seeks a mandamus to the respondent No.1 Bank of Baroda (BOB) to release the title documents of property bearing No.KU-62, Pitampura, Delhi in favour of the petitioner Kotak Mahindra Bank Ltd. 2. Though the petition was listed on three earlier occasions before this Court and the counsel for the respondent No.1 BOB appeared on advance notice but was adjourned from time to time on the request of the counsel for the petitioner Bank and last on the request that the petitioner Bank desires to move some application. However no application has been filed and the counsel for the petitioner Bank and the counsel for the respondent No.1 BOB have been heard. 3. It is the case of the petitioner Bank: (i) that one M/s Chhavi Textiles of which the respondent No.2 Sh. Rajat Gulati was / is the sole proprietor was enjoying credit limit from the respondent No.1 BOB and to secure which had created equitable mortgage by deposit of title deeds of property No.KU-62, Pitampura, Delhi; (ii) that the respondent No.2 Sh. Rajat Gulati approached the petitioner Bank for an overdraft limit to satisfy the dues of the respondent No.1 BOB and the petitioner Bank agreed thereto on the respondent No.2 Sh. Rajat Gulati agreeing to secure the advances of the petitioner Bank by creating equitable mortgage of his aforesaid property and the petitioner Bank paid the entire outstanding of the respondent No.1 BOB from the said M/s Chhavi Textiles / Sh. Rajat Gulati; (iii) however, the respondent No.1 BOB notwithstanding having so closed the credit account of M/s Chhavi Textiles / Sh. Rajat Gulati, has not released the title documents of the property aforesaid in favour of the petitioner Bank and which as per the agreement of the petitioner Bank with the respondent No.2 Sh. Rajat Gulati are to be deposited with the petitioner Bank to secure the dues of the petitioner Bank; (iv) that the respondent No.1 BOB has refused to so release the title documents (a) on the ground that it has advanced certain monies to one M/s R.R. Enterprises also and for security of which the respondent No.2 Sh. Rajat Gulati has given his personal guarantee and since the said M/s R.R. Enterprises and the respondent No.2 Sh. Rajat Gulati did not pay the dues of the respondent No.1 BOB, the respondent No.1 BOB approached the Debt Recovery Tribunal (DRT) which has issued a Recovery Certificate against the respondent No.2 Sh. Rajat Gulati also; and, (b) claiming a general lien over the subject property for realisation of the dues crystallised by the DRT. 4. It is the contention of the petitioner Bank that the respondent No.1 BOB has no general lien over the property aforesaid. 5. I have at the outset enquired from the counsel for the petitioner Bank as to how a writ petition under Article 226 of the Constitution of India is maintainable for the relief claimed and whether not the dispute if any of the petitioner Bank with the respondent No.1 BOB is a private lis with no public law character and for which the appropriate remedy is either by way of approaching the Banking Ombudsman or by way of a suit or arbitration as may be applicable. 6. The counsel for the petitioner Bank, post passover sought to cite case law, has drawn attention to paras 21 and 22 of Kumari Shrilekha Vidyarthi Vs. State of U.P. (1991) 1 SCC 212 to contend that since the respondent No.1 BOB is a State within the meaning of Article 12 of the Constitution of India and its action, of notwithstanding the monies to secure which the title deeds were kept with it having been repaid not releasing the said title deeds, is unfair and arbitrary, a writ petition is m