Court No. - 39
Case :- WRIT - C No. - 25421 of 2020 Petitioner :- Manoday Singh Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Amit Kumar Counsel for Respondent :- C.S.C.
Hon'ble Naheed Ara Moonis,J. Hon'ble Dinesh Pathak,J.
Heard learned counsel for the petitioner, learned counsel for respondents no. 2 & 3 and the learned Standing Counsel for respondent no. 1.
The instant petition has been filed seeking following reliefs :
"(i) Issue a writ, order or direction in the nature of mandamus directing the respondent no. 2 to discharge to petitioner from the all kind of financial liabilities of the sanctioned loan by respondent Bank in view of the representation dated 11.09.2019 and 21.07.2020 and not to take any coercive action against petitioner (Annexure No. 6 to this petition), (ii) Issue a writ, order or direction in the nature of mandamus directing the respondent no. 2 to decide the representation dated 11.09.2019 and 21.07.2020 (Annexure No. 6 to this petition) ."
At the outset learned counsel for the respondent-bank has raised a preliminary objection that the present writ petition is not maintainable as respondent-bank is a private financial institution and not an instrumentality of the 'State' under Article 12 of the Constitution of India. The writ petition is not maintainable to enforce a contract between two entities.
In the case of Federal Bank Ltd. v. Sagar Thomas and others, (2003) 10 SCC 733 : AIR 2003 SC 4325, the Hon'ble Supreme Court has held as under :
"28. As indicated earlier, share capital of the appellant bank is not held at all by the Government nor any financial assistance is provided by the State, nothing to say which may meet almost the entire expenditure of the company. The third factor is also not answered since the appellant bank does not enjoy any monopoly status nor it can be said to be an institution having State protection. So far as control over the affairs of the appellant bank is concerned, they are managed by the Board of Directors elected by its shareholders. No governmental agency or officer is connected with the affairs of the appellant bank nor is anyone of them is a member of the Board of Directors. In the normal functioning of the private banking company there is no participation or interference of the State or its authorities. The statutes have been framed regulating the financial and commercial activities so that fiscal equilibrium may be kept maintained and not get disturbed by the mal-functioning of such companies or institutions involved in the business of banking. These are regulatory measures for the purposes of maintaining the healthy economic atmosphere in the country.
29. .....Any business or commercial activity, may be banking, manufacturing units or related to any other kind of business generating resources, employment, production and resulting in circulation of money are no doubt, are such which do have impact on the economy of the country in general. But such activities cannot be classified one falling in the category of discharging duties, functions of a public nature. Thus the case does not fall in the fifth category of cases enumerated in the case of Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722. Again we find that the activity which is carried on by the appellant is not one which may have been earlier carried on by the Government and transferred to the appellant company."
Following the law laid down by the Hon'ble Supreme Court in the above decision that the private financial institutions, carrying of business or commercial activity, may be performing public duties, but cannot be considered to be covered under the definition of "State" under Article 12 of the Constitution of India, the writ petition against such entity is not maintainable before the High Court.
Hence, in view of the settled principle of law the present writ petition is not maintainable. That apart, since disputed question of facts are involved, we decline to exercise our extraordinary jurisdiction under Article 226 of the Constitution of India on this ground also.
Accordingly, the writ petition is hereby dismissed. Order Date :- 6.1.2021 VR/