STATE BANK OF INDIA vs Prathyusha Resources Infra Pvt Ltd on 26 March 2026

ORDER

1. This Interlocutory Application has been filed by the Petitioner / 13th defendant praying to direct the Registry to return the documents Exhibits A-43 and A-44 relating to the properties set out as Item No.8 and 9 in Schedule ‘B’ to the petitioner / 13th defendant.

Averments in the application by Petitioners / Applicants

2. The petitioner is neither a borrower nor guarantor nor security provider in respect of the alleged debt claimed by the 1st Respondent / Applicant Bank from the 2nd Respondent / 1st defendant. It is stated that the petitioner has been wrongly arrayed as a defendant. It is also stated that the petitioner neither executed any guarantee, Memorandum of Deposit of Title deeds nor have deposited any title deeds in favour of the 1st Respondent bank in respect of the properties more fully described as Item Nos. 8 and 9 of Schedule ‘B’ to the TA. The petitioner never created any mortgage as gave any security for the credit facility availed by the 2nd Respondent / 1st defendant.

3. It is stated that the 1st respondent bank claimed for attachment of the said property on the basis of an implied guarantee and deemed mortgage which is not sustainable either in law or on facts. The petitioner never guaranteed the 2nd Respondent’s debt nor created any security over his properties which are set out as Item Nos. 8 and 9 in Schedule ‘B’ to the TA. The 2nd Respondent is fully aware about this fact and has wrongly misused the title deeds of the petitioner’s property.

4. During 2019, as the OA was at the final stage of arguments, the petitioner filed IA No.471/2019 seeking for return of his title deeds, however, the Tribunal by order dated 22.9.2023 dismissed the said IA on the ground that the TA had to be decided before directing return of the documents and that the IA was premature.

5. The 1st respondent thereafter filed additional document being extract of Equitable Mortgage (EM) Register, to contend that the petitioner had deposited the title deeds. The petitioner therefore filed IA No.434/2024 and 435/2024 to disclose the names of the signatories of the EM register and to cross examine them. The 1st respondent filed its counter disclosing the names of three signatories and alleged that the first one of them is deceased.

6. The EM Register extract is an internal documents of the 1st respondent bank and there is no signature of the petitioner or any proof that he had either visited the bank or deposited the title deeds. Such register is not binding on the petitioner and had no evidentiary value.

7. The 1st respondent failed to establish any valid basis to proceed against the property or retain the Exhibits A-43 and A-44 and there is no likelihood of the bank succeeding against the petitioner based on the pleadings, proof affidavit and documents relied upon by it.

8. It is stated that the earlier IA No.471 of 2019 was dismissed only on the ground that as the OA had not been adjudicated, the IA was premature. Even after giving time the 1st Respondent bank failed to produce any valid evidence to prove that the petitioner has created the mortgage. Considering the final hearing being delayed due to multiple applications being filed by the 1st Respondent and there is no bar to seek the said relief at this stage, especially when the entire case of the 1st Respondent against the petitioner has been fully disclosed and there is nothing more which the 1st Respondent can add to it.

9. It is also stated that the 1st respondent is fully aware that the petitioner neither executed any guarantee nor deposited the title deeds of the properties referred supra and it has also been unable to produce even an iota of evidence against the petitioner to the contrary. In such circumstances, the bank has no right to retain the title deeds or proceed against the said properties. It is stated that neither the 1st Respondent nor the 2nd Respondent is entitled to the said property or the documents and the said documents are to be returned to the petitioner.

10. It is stated that as the 1st Respondent / Applicant Bank has filed the original documents in this Tribunal, the registry of this Tribunal be directed to return the same to the Petitioner / 13th defendant.

Counter filed by 1st Respondent Bank

11. The OA was filed for recovery of a sum of Rs.88,16,76,422/- against the defendants 1 to 13 along with future interest. The 13th defendant is the mortgagor / guarantor to the loan availed by the 1st defendant. The applicant had filed Proof Affidavit on 30.5.2018 along with Exhibits A-1 to A-73. At this juncture the Petitioner / 13th defendant had filed the above application for return of the original documents claiming that he is neither borrower nor a guarantor. The said application is wholly frivolous and not maintainable either in law or on facts and is liable to be dismissed in limini.

12. The preliminary objection of the respondent is that all the parties / defendants 2 to 12 in above OA have not been arrayed as party respondents in the IA. The defendants 2 to 12 are to be added as necessary parties, as the 1st Respondent was sold as a going concern by the Liquidator, NCLT in December 2023 and to adjudicate the above application as the presence of the said parties are deemed necessary.

13. It is stated that in the above loan accounts, the property belonging to the 2nd defendant i.e., Sri. P. Raja Rao situated at II Floor of commercial building (under construction) of area 42,121.04 sq. ft. on land in SF Nos.11, 128/AA, 129, 116 an 117 in Nanakram Gua

Village, Serilingampallly Mandal, RR District was initially mortgage in favour of the bank on 26.03.2011 for the loans availed. Subsequently the same was released on 15.02.2012 on the condition that the 2nd defendant will provide alternate security and towards this the 2nd defendant affirmed its intent to create an additional security for the loans availed and had agreed to provide additional security vide the Board Resolution dated 02.09.2013. Accordingly, the petitioner herein by way of deposit of original title deeds mortgaged the same with this respondent. The said properties stand in the name of the 13th defendant and are marked as Ex. A-43 and A-44.

14. The averment to the effect that the petitioner / 13th defendant has been considered on the basis of only implied guarantee and deemed mortgagor is denied. The original title deeds of the aforesaid property were handed over to this Respondent with an intent to create equitable mortgage over the same as alternate additional security by the 2nd respondent / 1st defendant and based that this respondent proceeded to create equitable mortgage dated 15.10.2013 over the said properties. The petitioner cannot be allowed to wriggle out merely on the ground that no registered mortgage was created. The averment that the bank has wrongly misused the title deeds of the properties of the petitioner is wholly denied as false and frivolous.

15. In Para 5 it is stated that the respondent has not produced valid evidence of mortgage as against the petitioner herein, from which it transpires that the petitioner failed to cooperate and did not come forward to register the MoD of the said title deeds in favour of the bank and hence the 13th defendant has been arrayed as a party in this case.

16. It is rather unfortunate that the petitioner has now chosen to come with the defence of a misleading statement and that having not executed any guarantee agreement nor deposited the title deeds for loan availed by the 2nd Respondent. The 1st Respondent stands by its version of events and asserts that where there is a clear intention of the Petitioner / 13th defendant to create a mortgage despite the lacuna in document, an implied mortgage comes into existence given the intention of the parties. By the implied conduct of the Petitioner / 13th defendant it is clear that he had agreed to be a mortgagor for the respective properties vide Item Nos. 8 and 9 of Schedule ‘B’ to the TA. Thus he is a mortgagor by conduct.

17. The 1st Respondent has filed equitable mortgage dated 15.10.2013 as additional documents and the same was allowed by this Tribunal vide its order dated 22.9.2023. This respondent has also filed Board Resolution dated 02.09.2013 as additional documents vide IA No.1073 & 1074 of 2023 and the same is pending orders before this

Tribunal. The petitioner is aware of the fact that his properties are given only for the purpose of creating additional security and thereafter with intention to create mortgage for the loan availed by 2nd respondent / 1st defendant on releasing the earlier mortgaged property belonging to 2nd defendant in TA No.451/2023 i.e., Shri P. Raja Rao.

18. The present application is not maintainable on law and fact and hit by Res Judicata as the petitioner had filed a similar application vide IA No.471 of 2019 and the same was dismissed by the Tribunal vide order dated 22.09.2023. The application is liable to be dismissed with costs. Point for consideration

19. Upon hearing the parties and on perusal of the records the following points arise for consideration:- (a) Whether the Petitioner is entitled to return of original documents (Exhibits A-43 & A-44) at this stage?

(b) Whether the present application is barred by principles analogous to res judicata or otherwise not maintainable?

(c) Whether the documents sought are necessary for adjudication of the main T.A.?

(d) To what relief, if any, the Petitioner is entitled? Answers to the Points for consideration

20. In so far as the Point (a) regarding entitlement for return of documents, it is seen that the core contention of the Petitioner is that no mortgage has been created and therefore the Bank cannot retain the original title deeds. On the other hand, the 1st Respondent Bank asserts that the title deeds were deposited with intent to create an equitable mortgage and relies upon documentary materials in support of the same. The issues relating to existence of deposit of title deeds, intention to create security, and status of the Petitioner as a mortgagor, are all substantive and disputed questions of fact which can be adjudicated only upon full consideration of pleadings, evidence, and trial in the main T.A. At this interlocutory stage, no conclusive finding can be rendered on these aspects. Granting return of documents at this stage would prejudice the case of the 1st Respondent Bank and would amount to pre-judging the issues involved in the main proceedings. Accordingly, the Petitioner is not entitled to return of the documents at this stage. This point is answered against the Petitioner.

21. In so far as Point (b) is concerned, it is not in dispute that an earlier application in I.A. No.471 of 2019 filed by the Petitioner seeking similar relief was dismissed by this Tribunal on 22.09.2023 on the ground that the application was premature. Though the said dismissal was not on merits, the reasoning therein clearly indicates that the issue of return of documents is intrinsically linked with the final adjudication of the T.A. In the absence of any substantial change in circumstances, the present application seeking the same relief at this stage is not maintainable. This point is answered against the Petitioner.

22. In so far as Point (c) is concerned, it is to be stated that the documents sought to be returned (Exhibits A-43 & A-44) are relied upon by the 1st Respondent Bank in support of its claim of equitable mortgage. These documents form part of the evidentiary record and are necessary for proper and effective adjudication of the issues involved in the T.A. Hence, their retention on the file of this Tribunal is justified till final disposal of the matter. This point is answered in favour of the 1st Respondent Bank.

23. In so far as Point (d) is concerned, it is to be stated that in view of the findings recorded on the above points, the Petitioner is not entitled to the relief sought in the present application.

24. Accordingly, the following:

ORDER

The Interlocutory Application is dismissed as premature. No order as to costs. Sd/- (SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II CHENNAI (Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 26th day of March, 2026)