The Gujarat High Court held that a bank cannot withhold original documents of property even after receiving the entire payment on a home loan on the grounds that dues of another loan taken under Pradhan Mantri Mudra Yojana (PMMY) have not been paid.
The petitioner, Manisha Brahmbhatt was in need of financial assistance and therefore, respondent, Bank of Baroda advanced a term loan of Rs. 9,80,000/-. The petitioner created a mortgage by way of security for the term loan advanced by the respondent-Bank with respect to the piece and parcel of the immovable property.
According to the petitioner, the entire dues of the respondent-Bank was cleared and therefore, the petitioner requested for return of the original title document of the property in question along with no due certificate. However, the respondent-Bank did not return the original documents nor any discharge deed for the mortgaged property was executed.
Mr. Rajput, the counsel on behalf of the petitioner submitted that the respondent-Bank cannot withhold the original documents as the petitioner has repaid the entire dues of the term loan of Rs. 9.80 lacs advanced by the respondent-Bank.
On the other hand, learned advocate Mr. Meena, the counsel for the respondent bench submitted that after availing financial assistance by way of Rs. 9.80 lakh as term loan, the respondent-bank has advanced another financial assistance of Rs. 5 lakh under Pradhan Mantri Mudra Yojna which is still outstanding, and therefore, unless and until the said amount of loan is repaid by the petitioner, the respondent-Bank cannot release the original document nor execute any deed for discharge of mortgaged property in view of the term loan agreement executed by the erstwhile Dena Bank which is now merged with the respondent-Bank.
The single bench of Justice Bhargav D. Karia held that the respondent-bank has committed an error by withholding the original documents of the petitioner in respect of the term loan of Rs. 9.80 lakh which is fully paid by the petitioner. The respondent-bank could not have withheld the original documents of the mortgaged property in question once the petitioner has repaid the loan as the financial assistance advanced by the respondent-bank under PMMY Scheme is advanced without any collateral security.
“The petition succeeds and is accordingly allowed. Respondent-bank is directed to hand over all the original documents of the property in question which is mortgaged by the petitioner for availing financial assistance of Rs. 9.80 lakh in the year 2017. The respondent bank is also directed to execute the deed of discharge of the mortgaged property forthwith. The respondent-bank shall complete such exercise within a period of four weeks from today,” the court-ordered.
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