Maan Steel and Power Limited and Anr. Vs Indian Bank (Calcutta High Court)
The petitioners approached the Calcutta High Court challenging the respondent bank’s refusal to release Fixed Deposit Receipts (FDRs), issue a ‘No Due Certificate’, and its demand for ₹42,46,557.83 towards alleged unrealised charges after the petitioner company’s credit facilities were taken over by another bank. The petitioner had originally obtained credit facilities of ₹94 crore from a consortium of lenders, including the respondent bank. Upon takeover of the respondent’s exposure by another bank after payment of the outstanding amount, the petitioners requested closure of the loan accounts, release of the FDR kept as a Debt Service Reserve Account (DSRA), and issuance of a ‘No Due Certificate’. Instead, the respondent demanded payment towards term loan processing fees, cash credit commitment charges and prepayment charges, and retained the FDR.
The petitioners contended that the FDR had been furnished exclusively as security for the term loan and that its purpose ceased once the loan stood fully repaid and transferred. They argued that the respondent had participated in the takeover process by furnishing the foreclosure figures and accepting the repayment, and therefore could not subsequently raise fresh monetary claims that were neither disclosed nor adjusted during closure. According to the petitioners, the later demand was an afterthought intended to justify continued retention of the FDR. They also challenged the respondent’s reliance on a banker’s general lien, asserting that the FDR constituted specific security for a limited purpose and could not be converted into general security for other claims. The petitioners maintained that any disputed charges had first to be established before a competent forum and that withholding the FDR and refusing to issue a ‘No Due Certificate’ were arbitrary and contrary to the contractual arrangement.
