JUDGMENT Ajoy Nath Ray, C.J.
1. This is a reference made by an order of an Hon'ble Division Bench passed on the 9th of September, 2005.
2. The reference was made in a Habeas Corpus Writ Petition No. 58318 of 2005. In the first two paragraphs of the referring judgment, their Lordships said as follows:-
Today we have dismissed the Habeas Corpus petition No. 58318 of 2005: Rakesh Mehta and Ors. v. State of U.P. and Ors. as infructuous.
From the averments made in the petition and supplementary affidavit filed by ICICI Bank Ltd., some questions of larger public importance have arisen. This Court cannot lose sight of day to day happenings in the society. Therefore, we have taken suo motu cognizance of the matter on the facts that have been brought on record in the aforesaid Habeas Corpus Petition and Supplementary Affidavit.
3. In the concluding portion where the reference was ordered, their Lordships said as follows:-
Shri V.P. Srivastava, learned Counsel for the respondents has vehemently urged that this Court may direct for CBI enquiry and then it would be revealed that in State of U.P. collection agency has been granted by ICICI Bank only to muscle men and bullies who are nothing but mafias and all the borrowers of the State of Uttar Pradesh, who have taken loan from the ICICI Bank are under constant threat of the mafias who are also criminally assaulting them. However, we were not issuing any such direction for holding a CBI enquiry at this stage.
From the facts stated above, in our opinion, the following questions of public importance arise for consideration.
(1) Whether license granted to ICICI Bank under the Banking Regulations Act, 1949 or guidelines issued by the Reserve Bank of India permit the ICICI Bank to recover its dues from the borrowers through collection agents who are bullies who recover the loan by taking law in their own hands?
(2) Whether the contract entered into between the ICICI Bank and Shiv Shakti Consultancy is a legal contract and, if so, its effect? Whether the contract entered into between the ICICI Bank and Shiv Shakti Consultancy absolves the ICICI Bank from all criminal and civil liabilities?
(3) Whether Shiv Shakti Consultancy is an agent of lClCl Bank and whether the bank is liable for all actions of its collection agent or agencies who violate criminal and civil laws.
(4) Whether ICICI Bank is under a legal obligation to follow due process of law for carrying out its banking business of advancement of loans and recovery of its dues? Whether it can disturb the rule of law by engaging collection agent that recovers the dues from the borrowers by using muscle power?
(5) Whether the ICICI Bank can recover its dues only in accordance with law by filing a civil suit?
(6) Whether the ICICI bank or its collection agency can take coercive action against the borrower by snatching the vehicles or taking possession of the property without following the procedure established by law and take further coercive action by locking the individual borrower in the bank or at some other place?
(7) Whether nay recovery charges are paid by the bank to its collection agents and whether it is recoverable by the bank from the borrower or not and, what is the percentage of recovery charges paid by the ICICI Bank to the collection agent.
(8) Whether ICICI Bank can ignore the provisions of Section 138 of the Negotiable Instrument Act, 1881 in case of bounced cheques and proceed to recover the amount of the bounced cheques through their collection agent by force?
(9) Whether the Nationalised Banks which recovers its dues from the borrowers in accordance with law could be permitted to adopt the same procedure for recovery of its dues from the borrowers as adopted by the private banks like ICICI Bank through collection agents who take law in their own hands?
(10) Whether for recovery of any amount from a borrower two different parallel systems could exist, one in accordance with law followed by the Nationalised Banks and the other followed by the private banks who recover their dues through collection agents in violation of law?
Since this is a matter of vital public importance, interest of justice demands that this matter should be heard by a larger bench.
The Registrar General is directed to register a Public Interest Litigation and place the records along with our order before the Hon'ble the Chief Justice for nominating an appropriate larger bench for hearing this public interest matter expeditiously.
4. On this order, when the file was placed by the Registry, the following order was passed by me on the 14th of September, 2005:-
Let the p.i.l. be heard by Hon. the C.J., Hon. Mr. Justice Sunil Ambwani, and Hon. Mr. Justice Ashok Bhushan.
Chief Justice 14.9.2005
5. In the body of the judgment, the Division Bench gave certain facts. The case arose in this way, that a Habeas Corpus petition was filed by the Manager of the ICICI Bank from Jail. Two FIRs had been lodged against certain persons including the Habeas Corpus applicant by two learned Advocates, namely, Someshwari Prasad and Dhananjay Prasad. They had respectively taken a car loan and a home loan; their complaint was that they were being criminally threatened and that by criminal intimidation, the private debt collectors engaged by the Bank had managed to obtain from them sums of money of the order of Rs. 40,000/- and Rs. 60,000/-.
6. It was also said that while one learned Advocate was driving his Car, the Bank's agents, allegedly ruffians, got into the Car and forced him to drive to the Bank premises. The Bank's case was radically different. It alleged that it suffered hooliganism at the office of the Bank premises itself and that several Advocates were involved in such act. The Bank Manager was perforce made to be taken into custody since the learned Advocates were involved; he even found moving an application for bail extremely difficult and almost impossible.
7. Hence the Habeas Corpus petition.
8. The Division Bench did not record it, but as the Bank Manager had been produced in Court, the purpose of the writ had been served. Although it is not recorded, we assume that from the Court Room, the Bank Manager travelled back not to the Jail again, but to his home or his office premises. The Division Bench felt on the allegations made by the borrowers, i.e. the learned Advocates that the collecting method employed by the Bank needed serious legal scrutiny. During the argument before us, we have come across the names of two collecting agencies, namely, Shiv Shakti Enterprises, (on whose behalf, the proprietor "Anubhav" has put his signature) and the other debt collecting agency is Chetna Enterprises.
9. It is said that the Bank screens itself by way of terms in the contract, so that even if their debt collectors overstep legal limits, nobody can reach the Bank. Debt collecting contracts are themselves alleged to be scars on the public system, and it is alleged that those are void and liable to be declared as contrary to public policy. The questions referred by the Division Bench would, no doubt, raise the said question, as the validity of the debt collecting contracts entered into by and between the commercial Banks and their debt collectors is involved.
10. However, we have to examine whether the litigation itself is a public interest litigation or, even though the Division Bench did not itself say or imply it to be so, whether the reference made by the Division Bench comes within the terms of Chapter V Rule 6 of our High Court Rules. If the reference is proper, only then aur can we give any opinion thereon.
11. The only reason why the Division Bench opined that the matter should be registered as a public interest litigation was that questions of law of general public importance were involved.
12. In our opinion, a litigation does not become a public interest litigation merely because questions of law of general public importance arise in that case. Such important questions are often decided in private litigation and those help the public in general, but public interest litigation is different. P.I.L. is where the interest, which the Court pronounces upon, is itself in a representative capacity a public interest.
13. In this case, Mr. Someshwari Prasad would be interested in having the agreement between ICICI and Shiv Shakti Enterprises declared as void and contrary to public policy. Such a declaration would bind Mr. Someshwari Prasad, Shiv Shakti and the ICICI only, but the declaration of law made in that regard would bind others as a precedent. The mere necessity of creating a precedent cannot found a public interest litigation all by itself.
14. We respectfully follow the Kerala special Bench judgment relied upon by Mr. Mitra appeared for ICICI, being the case of Babu Premarajan reported at . Passages would be found at page 449 to the effect that if a question of law of whatever importance arises before the Division Bench, ordinarily the Division Bench should decide it itself and not refer it to a larger Bench, unless there is a conflict of precedent, which makes it impossible for the Division Bench to decide this way or the other. This was opined in Kerala, even though there was a rule of the High Court which, on a plain reading, appeared to allow two Hon'ble Judges of a Division Bench to refer any questions to a larger Bench merely on their Lordships agreement.
15. As such, if the writ petition before the Hon'ble Division Bench is still alive, the Division Bench is fully at libertyin its own aisdoun to decide all the questions itself and indeed all the questions purportedly got referred to the larger Bench.
16. Whether the writ petition is alive before the Division Bench or not, is not clear. Mr. Mitra says that the writ petition is clearly disposed of by the first two paragraphs and Mr. Shashi Nandan, appearing for the learned Advocate says that it is still alive for the purpose of considering the CBI inquiry.
17. If the petition is alive, the questions of law are to be decided by the Division Bench itself and the CBI inquiry might be ordered or not, as the Division Bench might think fit. The Division Bench has jurisdiction to decide itself and that jurisdiction has to be exercised.
18. We are therefore of the clear opinion that the direction to have a case registered as a public interest litigation merely because of the public importance of the questions of law involved, was a direction not in accordance with law and as such, the reference made on the administrative side by me, bringing the matter before this Bench as a public interest litigation, is also incorrect and the matter should never have been branded as a public interest litigation either by Hon'ble Division Bench judicially, or by me acting in administrative capacity.
19. The other point is whether it is a reference under Chapter V Rule 6 that the Division Bench has in reality resorted to. The said rule is quoted below:-
6. Reference to a larger Bench.-The Chief Justice may constitute a Bench of two or more Judges to decide a case or any question, of law formulated by a Bench hearing a case. In the latter event the decision of such Bench on the question so formulated shall be returned to the Bench hearing the case and that Bench shall follow that decision on such question and dispose of the case after deciding the remaining questions, if any, arising therein .
20. The first part of the rule refers to constitution of a Bench by the Chief Justice himself by use of his own administrative discretion. This is not one such case.
21. So far as the second part of the rule is concerned, where the questions of law are formulated by a Division Bench for reference and decision, the case has to be alive before the Division Bench itself. If the case is alive in the present case, then also a reference under the second limb, is, with the greatest of respect, improper, because nothing prevented the Division Bench from deciding the questions itself. There were no conflicting Division Benches facing their Lordships and as such, the Kerala principle mentioned above applies with full force.
22. Mr. Shashi Nandan submitted that the scope of public interest litigation is sufficiently large for us to entertain these questions as such, even on the facts of the present case and even in the manner those have been referred to us. He gave the case of Ashok Lanka reported at and showed us passages from page 618 including paragraph 2 to emphasize that it was within the discretion of the Court in an appropriate litigation even to inquire into public facts suo motu if the exigency of the case so required.
23. He then gave us the case of Friends Colony reported at and placed paragraph 7 from page 746 to show that the Court should and often does take suo motu action in public interest litigation. Next he cited the compasatively old case of Mukti Morcha, decided in the beginnings of the commencement of public interest litigations, reported at . He placed passages from paragraph 9 at page 811 to submit that the test of entertaining a public interest litigation is for the Court to ask itself whether its conscience is sufficiently shocked or troubled. There are no parties in a public interest litigation as such; the whole public at large are parties, and so is the whole of the administration. It is not an adversary litigation but it is a type of litigation where the Government is often called upon by the court's order to do its duty and the Court sometimes even supervises such action of the Government after it has passed order to that effect.
24. On these bases, Mr. Shashi Nandan submitted that if we pronounce upon the contract of Shiv Shakti and ICICI, by taking its congnizance ourselves and also of any public facts that we might wish to inquire into, the matter would truly and properly be a public interest litigation.
25. This submission of Mr. Shashi Nandan suffers from one very serious problem. It is the problem of the Court having no jurisdiction to answer questions of law merely academically and in the vacuum. Mr. Prasad has already filed another writ petition No. 13778 of 2006 where by he specifically challenges the same contract of the debt collector as being contrary to public policy. But in the case before the Division Bench, which is before us, either nothing survives or something survives for which the Division Bench is itself to give its decision uieluoring those on points of law.
26. If nothing survives, then our answering the questions referred as public interest law points, would suffer from this problem that, the declaration of law would be wholly academic and a mere enunciation of law made by the Court without there being a case surviving in which to make the pronouncement. That such declaration might be used later on by the parties to have even their own rights declared, in one particular manner, is no reason or argument why the Court can have seisin or jurisdiction over mere points of law referred as such.
27. The Courts have jurisdiction to decide on points of law only when those arise in relation to and are incidental to questions raised by parties affecting their own rights, liabilities and interest. The Court is all the time deciding questions of law, but it is a paradox that the Court has no jurisdiction to decide a question of law, and a question of law only, like a Professor answering questions to a persistent law student.
28. As such, the questions referred are all left open; it is opined that the questions cannot be answered as a subject of public interest litigation. No opinion is given whether Writ Petition No. 58318 of 2005 is still alive or not. The reference to the Full Bench was not properly made, and it is annulled. The order and observations are without prejudice to the rights and contentions of the parties in any proceeding whether the writ petition No. 13778 of 2006 filed today, or any other matter.