9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (7) TMI 1170 - SC - Indian LawsChallenged the power of HC issuing writ of mandamus - return of title deeds - public sector Bank State under Article 12 - HELD THAT - On facts we have found that the terms of the policy do not give room to any ambiguity as to the risk covered by the first respondent. We are also of the considered opinion that the liability of the first respondent under the policy arose when the default of the exporter occurred and thereafter when the Kazakhstan Government failed to fulfil its guarantee. There is no allegation that the contracts in question were obtained either by fraud or by misrepresentation. In such factual situation, we are of the opinion, the facts of this case do not and should not inhibit the High Court or this Court from granting the relief sought for by the petitioner. From the recent decision in Karnataka State Forest Industries Corporation v. Indian Rocks 2008 (10) TMI 719 - SUPREME COURT It is clear that, (a) in the contract if there is a clause for arbitration, normally, writ court should not invoke its jurisdiction; (b) the existence of effective alternative remedy provided in the contract itself is a good ground to decline to exercise its extraordinary jurisdiction under Article 226; and (c) if the instrumentality of the State acts contrary to the public good, public interest, unfairly, unjustly, unreasonably discriminatory and violative of Article 14 of the Constitution of India in its contractual or statutory obligation, writ petition would be maintainable. Hence, Writ petition is maintainable even in contractual matters. In the case on hand, it is not in dispute that the appellant- Bank, being a public sector Bank, discharging public functions is State under Article 12. In view of the settlement of the dues on the date of filing of the writ petition by arrangement made through another Nationalized Bank, namely, State Bank of India and the statement of accounts furnished by the appellant-Bank subsequent to the same i.e. on 14.05.2009 is 0.00 (nil) outstanding, we hold that the High Court was fully justified in issuing a writ of mandamus for return of its title deeds. Therefore, we are unable to accept the claim of the appellant-Bank and on the other hand, we are in entire agreement with the direction issued by the learned Single Judge affirmed by the Division Bench. Consequently, the appeal of the Bank is dismissed. The appellant-Bank is directed to return the title deeds deposited by the respondent-Company within a period of two weeks from today. With the above direction, the civil appeal is dismissed. No order as to costs.
Issues Involved:
1. Maintainability of the writ petition under Article 226 of the Constitution. 2. Right of the appellant-Bank to retain the mortgage deed. 3. Jurisdiction of the High Court to issue a writ of mandamus. 4. Settlement of dues and return of title deeds. 5. Allegations of fraud and their relevance to the case. Detailed Analysis: 1. Maintainability of the writ petition under Article 226 of the Constitution: The appellant-Bank argued that the direction for the return of the title deeds cannot be a subject matter of Article 226, as it pertains to a civil dispute. The proper forum for such disputes is the Debts Recovery Tribunal (DRT) or a civil court. However, the respondent-Company contended that the writ petition was maintainable since the appellant-Bank, being a public sector bank, is a 'State' under Article 12 and therefore amenable to writ jurisdiction. The Supreme Court affirmed that a writ petition under Article 226 is maintainable even in contractual matters if the State acts unfairly, unjustly, or unreasonably, violating Article 14. The Court referenced the case of ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. to support this view, noting that public sector banks discharging public functions can be subject to writ jurisdiction. 2. Right of the appellant-Bank to retain the mortgage deed: The appellant-Bank claimed the right to retain the mortgage deed due to alleged irregularities and fraud connected to the respondent-Company. However, the respondent-Company had settled its dues through an arrangement with the State Bank of India, depositing a cheque of Rs. 15 Crores. The appellant-Bank's own statement of accounts dated 14.05.2009 indicated a nil balance, confirming that there were no outstanding dues. The Supreme Court held that once the dues were settled, the respondent-Company was entitled to the return of its title deeds. The Court emphasized that the Bank's right to retain the mortgage deed ceased once the outstanding amount was cleared. 3. Jurisdiction of the High Court to issue a writ of mandamus: The appellant-Bank argued that the High Court should not have issued a writ of mandamus as the matter involved a private contract. The Court, however, reiterated that when a public sector bank acts in a manner contrary to public interest or violates constitutional guarantees, the High Court can issue a writ of mandamus. The Supreme Court found that the High Court was justified in issuing the writ of mandamus for the return of the title deeds, given that the dues were settled and the Bank's actions were arbitrary and unfair. 4. Settlement of dues and return of title deeds: The respondent-Company had settled its dues with the appellant-Bank through an arrangement with the State Bank of India, which issued a cheque of Rs. 15 Crores. The appellant-Bank encashed this cheque and appropriated the amount against the respondent-Company's outstanding balances. Despite this, the appellant-Bank delayed returning the title deeds and issuing the 'No Objection Certificate' (NOC) and 'No Due Certificate' (NDC). The Supreme Court noted that the respondent-Company had fulfilled its financial obligations, and the appellant-Bank's own records showed a nil balance. Therefore, the respondent-Company was entitled to the return of its title deeds and the issuance of NOC and NDC. 5. Allegations of fraud and their relevance to the case: The appellant-Bank alleged that the respondent-Company was involved in a fraud connected to M/s Rajco Steel Enterprises and M/s Kali International Pvt. Ltd. However, the Supreme Court found it unnecessary to delve into the truth of these allegations for the purpose of this case. The Court focused on the fact that the respondent-Company had settled its dues and was entitled to the return of its title deeds. The Supreme Court dismissed the appeal of the appellant-Bank and directed it to return the title deeds deposited by the respondent-Company within two weeks. The Court upheld the High Court's decision, emphasizing that the Bank's actions were arbitrary and unjust, warranting the issuance of a writ of mandamus.
|
