Interim release of title deeds is justified against cash security where the secured debt is prima facie extinguished.

Asian Hotels North Limited (“AHNL”) owned the Hyatt Regency Hotel property at Bhikaji Cama Place, New Delhi, over which original title documents were held by DBS Bank India Ltd. as security trustee.

AHNL’s earlier borrowing from IndusInd Bank had been assigned to Exclusive Capital Ltd. (“ECL”), which subsequently obtained a ₹60 crore loan from Clover Media Pvt. Ltd. under an Inter-Corporate Loan Agreement dated 14 December 2022. The agreement permitted Clover Media to assign the AHNL debt upon default. ECL defaulted, following which Clover Media assigned the debt to VSJ Investments Pvt. Ltd. on 1 February 2024. The assignment and substitution of VSJ as lender were recognised in prior proceedings.

AHNL entered into a One Time Settlement with VSJ on 31 December 2024, paid ₹70 crore, and received a No-Dues Certificate. The Registrar of Companies subsequently issued a Memorandum of Satisfaction of Charge dated 17 April 2025, recording satisfaction of ECL’s ₹105 crore charge as of 31 December 2024.

ECL nevertheless issued a demand notice claiming ₹159.66 crore and filed CS(COMM) 1360/2025 challenging the Inter-Corporate Loan Agreement as forged and seeking to restrain release of the title documents.

During the pendency of that suit, AHNL issued ₹300 crore secured non-convertible debentures and was required by its debenture trustee to deposit the original title deeds. The trustee’s letter dated 7 May 2026 warned that continued non-deposit could affect the financing arrangement.

AHNL therefore filed CS(COMM) 376/2026 seeking release of the title documents, offering to deposit ECL’s entire claimed amount in Court as security.

Whether AHNL’s suit could be exempted from the mandatory requirement of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, on the ground that it genuinely contemplated urgent interim relief?

Whether AHNL established a strong prima facie case, balance of convenience, and likelihood of irreparable injury warranting an interim mandatory direction for release of the original title documents?

Whether ECL’s challenge to the Inter-Corporate Loan Agreement as forged and its reliance on the unilateral ICD Letter displaced the prima facie effect of the ICL Agreement, the contemporaneous correspondence, prior judicial findings, and the subsequent assignment to VSJ?

Whether release of the title documents, subject to deposit of ECL’s crystallised monetary claim, would prejudice ECL or improperly grant the final relief at the interim stage?

Whether ECL was entitled to continue restraining release of the title documents or AHNL’s creation of further encumbrances in CS(COMM) 1360/2025?

Section 12A of the Commercial Courts Act, 2015 mandates pre-institution mediation unless the suit genuinely contemplates urgent interim relief; under Yamini Manohar v. T.K.D. Keerthi, the Court must examine the plaint, documents, cause of action, and urgency holistically from the plaintiff’s standpoint, while rejecting merely artificial or camouflaged urgency.

Novenco Building & Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. further holds that continuing injury, risk of loss of rights or assets, and the ineffectiveness of delayed relief may establish urgency, and that delay alone does not negate urgency where the wrong is continuing.

Applications under Order XXXIX Rules 1 and 2 CPC require consideration of prima facie case, balance of convenience, and irreparable injury.

An interlocutory mandatory injunction requires a stronger case than an ordinary prima facie case, serious or irreparable injury, and balance of convenience in favour of the applicant, as stated in Dorab Cawasji Warden v. Coomi Sorab Warden.

Under Deoraj v. State of Maharashtra, even relief resembling the final relief may be granted exceptionally where withholding it would perpetuate grave injustice and the applicant has an exceptionally strong prima facie case.

Sections 60 and 83 of the Transfer of Property Act recognise the mortgagor’s right of redemption, while Section 77 of the Companies Act, 2013 places the obligation of registration of a charge on the company creating it and does not allow that company to rely on its own failure to defeat the underlying obligation.

The Court also considered the doctrine of lis pendens under Section 52 of the Transfer of Property Act but held it inapplicable to prevent substitution of collateral where ECL’s claim was monetary and fully secured by a cash deposit.

The Court held that AHNL’s urgency was bona fide because the debenture trustee had demanded immediate deposit of the title deeds securing ₹300 crore of NCDs, and non-compliance could trigger default, jeopardise working capital, and impair AHNL’s operations. The continuing withholding of the documents also affected AHNL’s ability to obtain future financing; therefore, the suit genuinely contemplated urgent interim relief and Section 12A mediation could be dispensed with.

On the merits, the Court found a very strong prima facie case in AHNL’s favour. The No-Dues Certificate issued by VSJ, the completed OTS, and the ROC’s unchallenged Memorandum of Satisfaction of Charge demonstrated, prima facie, that the debt and ECL’s charge had been extinguished.

ECL’s forgery defence was weakened by its own contemporaneous emails acknowledging the ICL Agreement, the deposit of original assignment documents with Clover Media, the maturity and default of the ₹60 crore loan, and the contractual right of assignment.

The Court also relied persuasively on earlier civil and criminal orders which had recognised that ECL had acted upon the ICL Agreement, while clarifying that the ultimate forgery issue remained triable.

The balance of convenience favoured AHNL because withholding the documents threatened its active ₹300 crore financing and business operations, whereas ECL’s claim was monetary and compensable. ECL’s interests could be adequately protected by directing AHNL to deposit the entire claimed amount of ₹159,66,05,228 in Court.

The Court therefore treated the cash deposit as a substitution of the disputed collateral and held that release of the physical title deeds would not prejudice ECL.

Although the relief was mandatory and potentially similar to the final relief, it did not finally determine AHNL’s unconditional entitlement to the documents and was justified by the exceptional circumstances and security furnished.

Consequently, the basis of ECL’s injunction application in the connected suit disappeared: once its monetary claim was secured by the Court deposit, restraining release of the title documents or AHNL’s future encumbrancing of its assets would cause disproportionate commercial prejudice to AHNL.

AHNL’s application under Order XXXIX Rules 1 and 2 CPC was allowed. DBS Bank India Ltd. was directed to release and physically hand over the original title deeds and security documents relating to the Hyatt Regency property to AHNL, subject to AHNL depositing ₹1,59,66,05,228 with the Registrar General within four weeks. The amount was to be placed in an interest-bearing, auto-renewable FDR, with its release subject to the final outcome of the suit. DBS was directed to release the documents within one week of proof of deposit.

ECL’s connected interim injunction application in CS(COMM) 1360/2025 was disposed of in accordance with these directions, and the earlier ad-interim order dated 7 January 2026 requiring DBS to hold the title documents was vacated.

The Court clarified that its observations were prima facie and would not affect final adjudication on the merits.