Gursharan Singh v. State of Punjab and Others

CWP-7599-2020o(O&M).oo -1-o o 2023:PHHC:133251o o o

INoTHEoPUNJABoANDoHARYANAoHIGHoCOURToATo CHANDIGARHo o o (30oconnectedocases)ooo o o o o o o o o Reservedoono :o12.07.2023.o DateoofoDecisiono :o06.10.2023.o o 241oo CWP-7599-2020o(O&M)o GURSHARANoSINGHoo V/So STATEoOFoPUNJABoANDoOTHERSoo o 209o CWP-6214-2017oo NARINDERoSINGHoo V/So STATEoOFoPUNJABoANDoOTHERSoo o CWP-29220-2019oo MANMOHANoSINGHo V/Soo STATEoOFoPUNJABoANDoOTHERSoo o CWP-37495-2019o(O&M)o NIRBHAYoSINGHoo V/Soo STATEoOFoPUNJABoANDoOTHERSoo o CWP-7599-2020o(O&M).oo -2-o o 2023:PHHC:133251o o o

226oCWP-24931-2019oo BALJIToSINGHoo V/So STATEoOFoPUNJABoANDoORS.o o 231oCWP-33031-2019oo KALAoKHANo V/So STATEoOFoPUNJABoANDoOTHERSo o 235oCWP-538-2020o(O&M)o HARJIToSINGHo V/So STATEoOFoPUNJABoANDoOTHERSoo o COCP-1114-2020oo HARJIToSINGHoo V/So ALOKoSONDHIoANDoOTHERSo o 236oo CWP-2949-2020oo GURBHEJoSINGHoo V/So STATEoOFoPUNJABoANDoOTHERSo o CWP-7599-2020o(O&M).oo -3-o o 2023:PHHC:133251o o o

237oCWP-2989-2020oo BALJINDERoSINGHoo V/Soo STATEoOFoPUNJABoANDoOTHERSoo 240oCWP-6849-2020oo ITFAQoSINGHoo V/So STATEoOFoPUNJABoANDoOTHERSoo COCP-1116-2020o(O&M)oo ITFAQoSINGHo oV/Soo ARUNoALAGAPPANoANDoANRoo 242oo CWP-17282-2020o(O&M)o AMARJIToKAURo V/So STATEoOFoPUNJABoANDoORSoo 246oo CWP-22613-2020oo HARBHAJANoSINGHoo V/So STATEoOFoPUNJABoANDoOTHERSoo 248oo CWP-396-2021oo MUKHTIARoSINGHoo V/Soo STATEoOFoPUNJABoANDoOTHERSo CWP-7599-2020o(O&M).oo -4-o o 2023:PHHC:133251o o o

250oo CWP-3590-2021oo SATNAMoSINGHo V/So STATEoOFoPUNJABoANDoOTHERSoo 264oo CWP-24842-2021oo HARJIToSINGHoo V/So STATEoOFoHARYANAoANDoOTHERSoo 267oo CM-7147-CWP-2023oin/ando CWP-24285-2022o(O&M)oo JATINDERoSINGH@LADDIo V/So INDUSINDoBANKoANDoANRoo 270oo CWP-4874-2022oo SOHANoSINGHo V/So THEoRESERVEoBANKoOFoINDIAoANDoOTHERSoo 272oo CWP-5205-2022oo DHARMINDERoKUMARoo V/So HDBoFINANCIALoSERVICESoLTDoANDoOTHERSoo CWP-7599-2020o(O&M).oo -5-o o 2023:PHHC:133251o o o

278oo CWP-9352-2022oo KULDEEPoSINGHoDHALIWALoo V/Soo STATEoOFoPUNJABoANDoOTHERSo o 284oo CWP-14934-2022oo RANJEEToKAURoANDoANOTHERo V/So RBIoOFoINDIAoTHRUOGHoINCHARGEoo o 291oo CWP-25537-2022oo GORIoSHANKARoo V/So STATEoOFoHARYANAoANDoOTHERSo o 301o CWP-9146-2023oo RANDEEPoKAURoo V/Soo STATEoOFoPUNJABoANDoOTHERSoo o 303oo CWP-11170-2023oo M/SoSHERGILLoFREIGHTWAYSo V/So CWP-7599-2020o(O&M).oo -6-o o 2023:PHHC:133251o o o

308oo CWP-13102-2023o(O&M)oo JITENDERoSINGHoANDoANOTHERoo V/So UNIONoOFoINDIAoANDoOTHERSoo o 310oo CWP-13279-2023oo BALRAJoSINGHoBRARoo V/So THEoRESERVEoBANKoOFoINDIAoANDoORSoo o 311oo CWP-13356-2023oo SANJEEVoKUMARoo V/So THEoRESERVEoBANKoOFoINDIAoTHROUGHoINCHARGE/MDoANDo OTHERSoo o 315oo CWP-4465-2022oo GURDEEPoSINGHo V/So STATEoOFoPUNJABoANDoOTHERSoo 316oo CWP-1671-2020oo TARLOKoSINGHoo V/So REGIONALoDIRECTORoRBIoANDoORSoo CWP-7599-2020o(O&M).oo -7-o o 2023:PHHC:133251o o o

PRESENToo Mr.oKaranoBhardwaj,oAdvocateoo forotheopetitioneroinoCWP-6214-2017,oCWP-29220-2019,oo CWP-37495-2019,oCWP-538-2020,oCOCP-1114-2020,o CWP-2949-2020,ooCWP-2989-2020,oCWP-6849-2020,o COCP-1116-2020,oCWP-7599-2020,oCWP-17282-2020,o CWP-12705-2021,oCWP-24842-2021,oCWP-1978-2023o CWP-11392-2023oandoCWP-12108-2023.oo o Ms.oSatinderoKaur,oAdvocate,oforotheopetitioneroo inoCWP-1671-2020,oCWP-4874-2022,oCWP-13356-2023oandoo CWP-13279-2023.o o o o Mr.oH.S.oJalal,oAdvocateoo forotheopetitioneroinoCWP-25537-2022o&oCWP-9352-2022.o o Mr.oGagandeepoSingh,oAdvocateoforoo Mr.oJ.S.oSaneta,oAdvocateoo forotheopetitioneroinoCWP-12411-2023.oo o Mr.oBhaveshoAggarwal,oAdvocateoo forotheopetitioneroinoCWP-24931-2019.oo o Mr.oRishuoMahajan,oAdvocateoo forotheopetitioneroinoCWP-24285-2022.oo o Mr.oSukhviroGill,oAdvocateoforoo Ms.oNishaoRana,oAdvocateoo forotheopetitioneroinoCWP-14934-2022.oo o Mr.oDilpreetoSingh,oAdvocateoo forotheopetitioneroinoCWP-22613-2020.oo o Ms.oSartikoGupta,oAdvocateoo forotheopetitioneroinoCWP-6849-2020o&oo COCP-1116-2020.o o Mr.oGagandeepoSingh,oAdvocateoo forotheopetitioneroinoCWP-12411-2023.oo Mr.oDaljeetoSinghoVirk,oAdvocateoo forotheopetitioneroinoCWP-24672-2022o&oCWP-24699-2022.oo o Mr.oJaswinderoSinghoRana,oAdvocateoforoo Mr.oDeepakoArora,oAdvocateoo forotheopetitioneroinoCWP-3590-2021.oo o Mr.oAdityaoSharda,oAdvocateoo forotheopetitionersoinoCWP-13102-2023.oo o Mr.oH.R.oBhardwaj,oAdvocateoo forotheopetitioneroinoCWP-33031-2019oandoo CWP-396-2021.oo o Mr.oP.K.S.oPhoolka,oAdvocate,oforotheopetitioneroo inoCWP-4465-2022.o CWP-7599-2020o(O&M).oo -8-o o 2023:PHHC:133251o o o

o Mr.oMansuroAli,oAdvocateoandoo Mr.oTusharoMadaan,oAdvocateoo forotheopetitionersoinoCWP-9146-2023oandoo CWP-11170-2023.oo o Ms.oNiharikaoSharma,oAAG,oPunjabo fororespondent-StateoinoCWP-6214-2017,oCWP-29220-2019oo CWP-37495-2019,oCWP-2949-2020,oCWP-2989-2020oo CWP-6849-2020,oCWP-17282-2020,oCWP-24931-2019oo andoCWP-33031-2019.oo Ms.oLavanyaoPaul,oDAG,oPunjabo fororespondent-StateoinoCWP-396-2021,oCWP-3590-2021,oo CWP-12705-2021,oCWP-4874-2022,oCWP-24672-2022,oCWP-24699-2022,oCWP-9352-2022o,oo CWP-9146-2023oandoCWP-4465-2022.oo Mr.oPankajoMulwani,oDAG,oHaryana.o o Ms.oGehnaoVaishnavi,oAdvocateoo fororespondentoNo.2-UnionoofoIndiaoo inoCWP-4874-2022.o o Mr.oSaurabhoSavara,oAdvocateowithoo Mr.oSandeepoK.oSharma,oAdvocateoo fororespondentoNo.4oinoCWP-1978-2023,oo fororespondentsoNo.4o&o5oinoCWP-24699-2022oandoo fororespondentsoNo.3oando4oinoCWP-11392-2023.oo Mr.oNakuloSharma,oAdvocateoo forotheorespondentsoNo.2o&o3oinoCWP-12108-2023.oo o Mr.oShailenderoKashyap,oAdvocateoo fororespondentoinoCWP-22613-2020.oo o Mr.oD.S.oSidhu,oAdvocateoforoo Mr.oAlokoJain,oAdvocateoo fororespondentsoNo.o2otoo4oinoCWP-13356-2023o andofororespondentsoNo.2o&o3inoCWP-13279-2023.oo o Mr.oHarshoChopra,oAdvocateoo fororespondentsoNo.6o&o7oinoCWP-17282-2020;o fororespondentsoNo.7o&o8oinoCWP-6849-2020oandoo fororespondentsoNo.1oando2oinoCOCP-1116-2020.o fororespondentsoNo.7o&o8oinoCWP-2989-2020.oo o Mr.oManish,oAdvocateoo fororespondentsoNo.4o&o5oinoCWP-12705-2021o&o fororespondentsoNo.7o&o8oinoCWP-4465-2022.o o Mr.oG.S.oSandhu,oAdvocateoo fororespondentoNo.8oinoCWP-24931-2019.oo o Mr.oSandeepoSuri,oAdvocateoandoo Mr.oMohitoSuri,oAdvocateoforoTataoMotorso inoCWP-24842-2021,oCWP-9146-2023.o CWP-7599-2020o(O&M).oo -9-o o 2023:PHHC:133251o o o

o Mr.oRohitoSud,oAdvocateoo fororespondentsoNo.7o&o8oinoCWP-538-2020oandoo fororespondentsoNo.1otoo4oinoCOCP-1114oofo2020.oo o Ms.oSharmilaoSharma,oSenioroPaneloCounselo fororespondentoNo.1-UnionoofoIndiaoinoCWP-13102-2023.oo o Mr.oJaiviroS.oChandail,oAddl.oStandingoCounselowithoo Ms.oJyotioKumari,oAdvocateo fororespondentoNo.2oinoCWP-13102-2023.oo o Mr.oRajivoVij,oAddl.oP.P.oU.T.oChandigarho forotheorespondentsoNo.4oando5oinoinoCWP-13102-2023.oo o Mr.oNitinoThatai,oAdvocateoo fororespondentsoNo.6otoo9oinoinoCWP-13102-2023,o fororespondentsoNo.5o&o6oinoCWP-33031-2019,o fororespondentsoNo.7o&o8oinoCWP-7599-2020,oo fororespondentsoNo.3oando4oinoCWP-396-2021,o fororespondentsoNo.o1oando2oinoCWP-5205-2022,oo fororespondentsoNo.o3o&o4oinoCWP-7706-2022,o fororespondentsoNo.4o&o5oinoCWP-24672-2022oandoo fororespondentsoNo.4o&o5oinoCWP-25537-2022.oo o Ms.oTavleenoKaur,oAdvocateoforoo Mr.oAmarjitoSinghoVirk,oAdvocateoo fororespondentsoNo.o7o&o8oinoCWP-6214-2017,oo CWP-29220-2019,oCWP-37495-2019,oo fororespondentsoNo.o7o&o8oinoCWP-2949-2020oo fororespondentsoNo.o3o&o4oinoCWP-3590-2021,o fororespondentsoNo.1o&o2oinoCWP-24285-2022,o fororespondentoNo.4oinoCWP-1978-2023,oo fororespondentoNo.7oinoCWP-11170-2023oando fororespondentoNo.o3oinoCWP-11392-2023o (INDUSINDoBANK)o o Mr.oIndreshoGoel,oAdvocateoo fororespondentoNo.2-RBIoinoCWP-396-2021oo andoCWP-7706-2022.oo o Mr.oVikasoKumaroGupta,oAdvocateoo fororespondentsoNo.o3oando4oinoo CWP-12411-2023.oo o Mr.oVipuloDharmani,oAdvocateoforoo Mr.oPuruoGupta,oAdvocateoo fororespondentsoNo.2o&o3oinoCWP-9352-2022,o andofororespondentsoNo.4oando5oinoCWP-4874-2022.oo o Mr.oGauravoSharma,oAdvocate,ofororespondentoNo.2oo inoCWP-1671-2020.oo o CWP-7599-2020o(O&M).oo -10-o o 2023:PHHC:133251o o o

VINODoS.oBHARDWAJ,oJ.o o o o Theo presento batcho ofo 30o writo petitionso raisingo ao commono questionoofolawoareobeingodecidedobyoaosingleojudgment.oo o o TheoquestionowhichoarisesoforoconsiderationobeforeothisoCourto isoasoregardsotheoscopeoandomaintainabilityoofowritopetitionoinotheomattersoofo re-possessiono ofo theo vehicleso financedo byo theo Privateo Financeo Companies/PrivateoBanks.oo o o Foro theo facilityo ofo referenceo factso areo beingo referredo fromo CWPoNo.7599oofo2020otitledoaso'GursharanoSinghoVs.oStateoofoPunjabo andoothers'.ooooo o FACTSo o o Theo petitionero whoo iso ao transportero byo professiono hado purchasedoaovehicleobearingoRegistrationoNo.PB-23oTo4785oafteroobtainingo financeo fromo respondento No.7o i.e.o HDBo Financialo Serviceso (hereinaftero referredotooasotheo'FinanceoCompany')oforoaosumoofoRs.19,25,000/-.oTheo amountowasotoobeorepaidoino47omonthlyoinstallmentsoofoRs.50,000/-oeacho whichowereotoocommenceow.e.f.o04.03.2017oandopayableotillo04.02.2021.oIto isoaverredothato35oinstallmentsoamountingotooaototaloofoRs.17,50,000/-owereo paidoandothato12oinstallmentsowereodue.oAnoadditionaloamountoofoRs.4olakhso waso financedo foro fabricationo ofo theo bodyo ofo theo vehicleo foro whicho 47o equatedomonthlyoinstallmentsoofoRs.10,420x30=3,12,600/-owereotoobeopaido ando30oinstallmentsoagainstotheosameowereopaid.oDespiteotheoinstallmentso beingopaidoregularly,otheovehicleoinoquestionowasorecoveredobyotheorecoveryo agentsooforespondentsoNo.7oando8-FinanceoCompanyoono07.03.2020owhileo itowasoonoaocommercialoengagementocarryingocargo.oo CWP-7599-2020o(O&M).oo -11-o o 2023:PHHC:133251o o o

oo Pursuantotootheoaboveosaidorecovery,otheopetitioneroapproachedo theo respondentso ando contendedo thato heo hado beeno regularlyo payingo theo installmentsoandoasoagainstotheototalofinancedoamountoofoRs.23,25,000/-,oano amountoofoRs.20,63,100/-oalreadyostandsopaidoandotheooutstandingoamounto wasoaomeagerosumoofoRs.2,61,900/-.oAorequestowasothusomadeofororeleaseoofo theovehicleowhichowasohowever,odeclined.oo o Theo nationwideo lockdowno waso howevero imposedo w.e.f.o

22.03.2020odueotoowhichotheopetitionerocouldonotopursueohisoremediesotoo seekoreturnoofohisovehicleoalthoughoheocontinuedotoomakeocallsotootheolocalo branch,ohowever,otheoFinanceoCompanyoinsistedoonore-saleoofotheovehicleo foro recoveryo ofo itsooutstandingo amount.o Ao representationo waso thereaftero madeo byo theo petitionero too theo policeo Authoritieso againsto theo respondento Financeo Companyo ono 18.05.2020o buto noo stepso foro redressalo ofo theo grievanceoofotheopetitionerowereotaken.oo o RelianceowasoalsooplacedoonoSectiono45oLoofotheoReserveoBanko ofoIndiaoAct,o1934owhichoempowersotheoReserveoBankoofoIndiaotooframeo guidelinesoforoNon-BankingoFinanceoCompanies/Institutionso(NBFCs).oTheo relevantoSectionoisoextractedoasounder:-oo "45L.oPoweroofoBankotoocalloforoinformationofromofinancialo institutionsoandotoogiveodirections.—o o

(1)oIfotheoBankoisosatisfiedoforotheopurposeoofoenablingoitotoo regulateotheocreditosystemoofotheocountryotooitsoadvantageoitoiso necessaryosootoodo,oitomay—o o o

(a)orequireofinancialoinstitutionsoeitherogenerallyooroanyogroupo ofofinancialoinstitutionsoorofinancialoinstitutionoinoparticular,o CWP-7599-2020o(O&M).oo -12-o o 2023:PHHC:133251o o o

too furnisho too theo Banko ino sucho form,o ato sucho intervalso ando withinosuchotime,osuchostatements,oinformationooroparticularso relatingo too theo businesso ofo sucho financialo institutionso oro institution,o aso mayo beo specifiedo byo theo Banko byo generalo oro specialoorder.o o

(b)ogiveotoosuchoinstitutionsoeitherogenerallyoorotooanyosucho institutionoinoparticular,odirectionsorelatingotootheoconductoofo businessobyothemoorobyoitoasofinancialoinstitutionsooroinstitu-tion.o o

(2)oWithoutoprejudiceotootheogeneralityoofotheopowerovestedoino theoBankounderoclauseo(a)oofosub-sectiono(1),otheostatements,o informationo oro particularso too beo furnishedo byo ao financialo institutionomayorelateotooallooroanyoofotheofollowingomatters,o namely,otheopaid-upocapital,oreservesoorootheroliabilities,otheo investmentsowhetheroinoGovernmentosecuritiesoorootherwise,o theopersonsotoowhom,oandotheopurposesoandoperiodsoforowhich,o financeoisoprovidedoandotheotermsoandoconditions,oincludingo theoratesoofointerest,oonowhichoitoisoprovided.o o

(3)oIno issuingo directionso too anyo financialo institutiono undero clauseo(b)oofosub-sectiono(1),otheoBankoshallohaveodueoregardo too theo conditionso ino which,o ando theo objectso foro which,o theo institutionohasobeenoestablished,oitsostatutoryoresponsibilities,o ifoany,oandotheoeffectotheobusinessoofosuchofinancialoinstitutiono isolikelyotoohaveoonotrendsoinotheomoneyoandocapitalomarkets."o o o o o Ito iso averredo thato theo respondento Financeo Companyo iso registeredoasoaoNon-BankingoFinanceoCompanyowithotheoReserveoBankoofo Indiaoandoisothusogroundobyotheosaidoprovision.oo CWP-7599-2020o(O&M).oo -13-o o 2023:PHHC:133251o o o

oo o Further,oinoexerciseoofotheopowersoconferredounderoSectiono45o LoofotheoReserveoBankoofoIndiaoAct,o1934,oaoNotificationobearingoCircularo No.RBI/2006-07/138o DNBSo (PD)o CCo No.80/3.10.042/2005-2006o datedo

28.09.2006o waso issuedo byo theo Reserveo Banko ofo Indiao mandatingo theo Financeo Companieso too formulateo Fairo Practiceo Codeo too layo downo procedure/practiceso foro dealingo witho businesso transactions.o Theo relevanto extractoofodisbursementoofoloansoincludingochangesoinotermsoandoconditionso isoreproducedohereinbelowoasounder:-o

iii)o Disbursemento ofo loanso includingo changeso ino termso ando conditionso o

(a)o Theo NBFCSo shouldo giveo noticeo too theo borrowero ofo anyo changeo ino theo termso ando conditionso includingodisbursemento schedule,ointerestorates,oserviceocharges,oprepaymentochargeso etc.oNBFCsoshouldoalsooensureothatochangesoinointerestorateso ando chargeso areo effectedo onlyo prospectively.o Ao suitableo conditionoinothisoregardoshouldobeoincorporatedoinotheoloano agreement.o o

(b)oDecisionotoorecallo/oaccelerateopaymentooroperformanceo underotheoagreementoshouldobeoinoconsonanceowithotheoloano agreement.oo o

(c)oNBFCsoshouldoreleaseoallosecuritiesoonorepaymentoofoallo dueso oro ono realisationo ofo theo outstandingo amounto ofo loano subjecto too anyo legitimateo righto oro lieno foro anyo othero claimo NBFCsomayohaveoagainstoborrower.oIfosuchorightoofosetooffoiso toobeoexercised,otheoborroweroshallobeogivenonoticeoaboutotheo sameowithofulloparticularsoaboutotheoremainingoclaimsoandotheo conditionso undero whicho NBFCso areo entitledo too retaino theo securitiesotillotheorelevantoclaimoisosettled/paid.o CWP-7599-2020o(O&M).oo -14-o o 2023:PHHC:133251o o o

o

(iv)oGeneralo o

(a)oNBFCsoshouldorefrainofromointerferenceoinotheoaffairsoofo theoborroweroexceptoforotheopurposesoprovidedoinotheotermso andoconditionsoofotheoloanoagreemento(unlessonewoinformation,o notoearlierodisclosedobyotheoborrower,ohasocomeotootheonoticeo ofotheolender).o o

(b)oInocaseooforeceiptooforequestofromotheoborroweroforotransfero ofoborrowaloaccount,otheoconsentoorootherwiseoi.e.oobjectionoofo theoNBFC,oifoany,oshouldobeoconveyedowithino21odaysofromotheo dateo ofo receipto ofo request.o Sucho transfero shallo beo aso pero transparentocontractualotermsoinoconsonanceowitholaw.o o

(c)oInotheomatterooforecoveryoofoloans,otheoNBFCsoshouldonoto resorto too undueo harassmento viz.o persistentlyo botheringo theo borrowersoatooddohours,ouseoofomuscleopowerofororecoveryoofo loans,oetc.o o

(v)oTheoBoardoofoDirectorsoofoNBFCsoshouldoalsoolayodowno theo appropriateo grievanceo redressalo mechanismo withino theo organizationotooresolveodisputesoarisingoinothisoregard.oSuchoao mechanismoshouldoensureothatoallodisputesoarisingooutoofotheo decisionsoofolendingoinstitutions'ofunctionariesoareoheardoando disposedoofoato leastoato theo nextohighero level.o Theo Boardo ofo Directorso shouldo alsoo provideo foro periodicalo reviewo ofo theo complianceoofotheoFairoPracticesoCodeoandotheofunctioningoofo theo grievanceso redressalo mechanismo ato variouso levelso ofo management.oAoconsolidatedoreportoofosuchoreviewsomayobeo submittedo too theo Boardo ato regularo intervals,o aso mayo beo prescribedobyoit."o o o (Emphasisosupplied)o CWP-7599-2020o(O&M).oo -15-o o 2023:PHHC:133251o o o

o o o Ito iso furthero averredo thato theo mandatoryo guidelineso ofo Fairo PracticesoCodeowereorequiredotoobeoadheredoto,ohowever,otheorespondento FinanceoCompanies'owereonotofollowingotheosame.oTheogrievanceoredressalo mechanismoisonotoeffectiveoandoisousuallyopro-bank.oo oo o ItoisoalsooaverredothatotheorespondentoFinanceoCompanyoalsoo framedoitsoFairoPracticesoCodeowhereinoitoisospecificallyoprescribedothatotheo Companyowouldonotoresortotooundueoharassmentofororecoveryoofoloansoando theoemployeesoshouldoactoasoperotheoCodeoofoConduct.oTheorelevantopartoofo theoFairoPracticesoCodeoofotheorespondentoFinanceoCompanyoisoextractedoaso under:-o o o "RecoveryoofoLoanso Theo Companyo wouldo noto resorto too undueo harassmento ofo recoveryoofoloans.oTheoemployeesoofotheocompanyowhoocontacto customersoforocollectionso/orecoveriesowilloactoasoperotheocodeo ofotheoconductoofotheocompany."o o o o Further,otheosaidoCodeoalsooprovidedodetailedoprocedureoforo takingorepossessionoofotheosecurity.oTheosameoisoasoounder:-oo "RepossessionoofoSecurityo o Theo Companyo haso ao builto ino re-possessiono clauseo ino theo contract/loano agreemento witho theo borrower.o Theo Loano agreementoshallocoverotheofollowingopoints:oo o k noticeoperiodobeforeotakingopossession;oo k circumstancesounderowhichotheonoticeoperiodocanobeowaived;o k theoprocedureoforotakingopossessionoofotheosecurity;o CWP-7599-2020o(O&M).oo -16-o o 2023:PHHC:133251o o o

k ao provisiono regardingo finalo chanceo too beo giveno too theo borrowerofororepaymentoofoloanobeforeotheosaleo/oauctionoofo theosecurity;o k theoprocedureoforogivingorepossessionotootheoborrowero k theoprocedureoforogivingorepossessionotootheoborroweroandotheo procedureoforosaleo/oauctionoofotheosecurity."o o oo ItoisoallegedothatonotwithstandingotheoaforesaidoFairoPracticeso Codeoandorequirements/proceduresorequiredotoobeofollowedobeforeotakingo re-possessionoofotheosecurity,otheorecoveryoagentsoofotheorespondentofinanceo Companyohaveobeenoviolatingotheosameoandohaveodeployedomuscleopowero too takeo forcibleo possessiono ofo theo securityo i.e.o theo vehicleo ino questiono insteadoofoensuringometiculousocomplianceoofotheopracticesoandoprocedureo incorporatedo ino theo aboveo Code.o Ao complainto datedo 18.05.2020o waso submittedo byo theo petitionero highlightingo theo saido breach,o however,o noo actionowasotakenothereupon.oReferenceowasoalsoomadeotootheoguidelinesolaido downobyotheoHon'bleoSupremeoCourtoasowelloasoofothisoCourtoinoaocatenaoofo judgmentsowhichoshallobeoreferredotooinotheolateropartoofotheojudgment.ooo REPLY/WRITTENoSTATEMENToooooo o Writteno statemento ono behalfo ofo respondentso No.7o ando 8-Financeo Companyo hado beeno filedo byo wayo ofo ano affidavito ofo theo Legalo Officer.o Whileo takingo objectiono againsto theo maintainabilityo ofo theo writo petition,oitowasoaverredothatotheopetitionerohasonotodisclosedotheocompleteo andotrueofactsoinoanoattemptotoomisleadothisoCourt.oTheoprocedureoprovidedo foro recoveryo ando repossessiono ofo securityo haso beeno dulyo followed.o Theo filingo ofo theo presento writo petitiono iso ano abuseo ofo theo processo ofo lawo CWP-7599-2020o(O&M).oo -17-o o 2023:PHHC:133251o o o

intendingo too defeato theo contractualo rightso ofo theo Financeo Companyo byo invokingosympathyodespiteobeingoinodefault.oo oo WhileoacknowledgingothatoloanoagreementoNo.2095949odatedo

31.12.2016owasoexecutedobetweenotheoparties,oitoisosubmittedothatotheototalo agreemento valueo foro theo commercialo vehicleo waso Rs.25,50,000/-o whicho includedotheoprincipaloamountoofoRs.19,25,000/-oplusotheofinancialochargeso too theo tuneo ofo Rs.6,25,000/-o too beo paido ino 51o monthlyo installmentso ofo Rs.50,000/-oeach.oTheoloanoagreementoforofinancingoforotheofabricationoofo theo bodyo waso Rs.5,31,420/-o (whicho includedo principalo amounto ofo Rs.4,00,000/-oandointerestoamountotootheotuneoofoRs.1,31,420/-)otoobeopaido ino51oequatedomonthlyoinstallmentsoofoRs.10,420/-.oHence,otheototaloamounto requiredotoobeopaidowasoRs.30,81,420/-.oItoisoaverredothatotheopetitionerowaso aochronicodefaulteroando29ochequesoissuedobyohimoinotheoloanoaccountoforo purchaseoofotheovehicleoando19ochequesoissuedotowardsotheoloanoaccountoofo bodyofabricationowereodishonoured.oHence,otheoFinanceocompanyoissuedo twooseparateoloanorecallonoticesodatedo14.10.2019obyoterminatingotheoloano agreements.o Ito wasocategoricallyo specifiedo ino theo aboveo saidoloano recallo noticesothatoasoono14.10.2019,oanoamountoofoRs.9,46,891/-owasodueoinoLoano AgreementoNo.2095949owhileoanoamountoofoRs.2,00,062/-owasooutstandingo ino loano agreemento No.2141514o (bodyo fabrication).o Theo petitionero waso calledouponotoodepositotheosaidoamountoandothatoinotheoeventoofofailureoono theopartoofotheopetitionerotoodooso,otheoCompanyowouldobeoatolibertyotoo exerciseoitsorightotooseekorecoveryoofotheofinancedovehicleoasoperoClauseo14o

(IV)oofotheoLoanoAgreement.oDespiteoreceiptoofotheosaidonotice,onoopaymento thwasomade.oAsobyo7 oMarch,o2020,otheopetitionerowasorequiredotoopayoano CWP-7599-2020o(O&M).oo -18-o o 2023:PHHC:133251o o o

amounto ofo Rs.4,30,504/-o againsto theo outstandingo overdueo installmentso alongowitholateopaymentopenaltyoandodespiteoreminders,otheopetitionerodido notopayoanyoheedoandocontinuedotoodefault.oHavingobeenoleftowithonooothero alternative,otheoFinanceocompanyointimatedotheoconcernedoPoliceoStationo Kansbahal,o Districto Sundergarh,o Odisha,o beforeo theo vehicleo waso repossessedopeacefullyoafteroaoperiodoofomoreothano05omonthsoofotheoloano recalloandoinoaccordanceowithoaboveoclauseoofotheoloanoagreementoextractedo hereinbelow:-o "14.oProcessoofoRepossession,oRelease,oSaleoofotheoAssetoo

(iv)oInotheoeventotheoBorrower(s)ofailsoand/oroneglectsoand/oro refuseso too makeo paymento ofo theo entireo 'outstanding'o aso communicatedoororectifyoand/ororemedyotheodefaultoasostatedo inotheoaforesaidonoticeowithinoaoperiodoofo7odaysofromoreceipto thereofoHDBFSoshallobeoentitledotootakeorepossessionoofotheo saidoAsset(s)/Vehicle(s)oforthwithofromowheresoeverotheosameo mayobeosituatedoandoforothisopurposeoenterointooanyopremiseso ofo theo Borrower(s)o oro ato sucho othero placeso whereo theo saido asset(s)/vehicle(s)o mayo beo lyingo ando too removeo oro takeo possessiono ofo theoAsset(s)/vehicle(s)o withouto beingo liableo responsibleotooanyopersonoforotrespassoorootherwise,oorotakeo resourceotooanyoofotheootherorightsoofoHDBFSoasomentionedoino thisoagreementowithoutobeingorequiredotoogiveoanyofurtherooro othero notice/intimation/communicationo ofo anyo natureo whatsoeveroandothereafterotooselloand/orocauseotoobeosoldooro otherwiseo disposeo ofo allo oro anyo parto ofo theo saido Asset(s)/Vehicle(s)ooroanyofittingsothereofoinosuchomanneroaso describedomoreofullyoandoparticularlyoinoClauseo14.2oheretoooro exerciseoitsootherorightsoasomentionedoinothisoAgreement."o o CWP-7599-2020o(O&M).oo -19-o o 2023:PHHC:133251o o o

o Ito haso beeno furthero averredo thato aftero obtainingo peacefulo possessionoofotheofinancedovehicle,otheoFinanceoCompanyoissuedoaopreosaleo noticeodatedo11.03.2020otootheopetitioneroinotermsoofoclauseo14o(vi)oofotheo LoanoAgreementopointingooutotheooutstandingoloanoamountoinoloanoaccounto No.2095949o waso Rs.9,21,317/-o whileo ino loano accounto No.2141514o waso Rs.2,06,106/-oandothatotheosameomayobeodepositedoonoorobeforeo26.03.2020o failingowhichotheofinancedopossessedovehicleowouldobeoauctionedowithouto anyofurtheronotice.oTheopetitionerochoseonototoorespondotootheosameoorotoo makeogoodotheodeposit,owhereuponotheovaluationoofotheosaidovehicleowaso gotoassessedothroughoAdroitoInspectionoServicesoPvt.oLtd.owhichoreportedo theovalueoofotheovehicleotoobeoRs.13,50,000/-.oo o AsotheopetitionerodidonotoapproachotheoFinanceoCompanyotoo clearotheooutstandingodues,otheovehicleoinoquestionowasoputoforoauctionoino whichotheobestopriceoofferedowasoRs.10,75,000/-.oTheototalooutstandingoloano amounto howevero waso Rs.11,27,423/-.o Theo petitionero dido noto fileo anyo objectionoaboutotheopriceoorothatoheohadoaobuyeroforoaobetteroprice.oTheosaleo wasohenceoconfirmedoinofavouroofooneoRoshanoLaloGargosonoofoSh.oBalo Mukand,o residento ofo Bhagtao Bhaio Ka,o Tehsilo Rampurao Phul,o Districto Bathinda,oPunjaboono26.05.2020.oo oo Theo financeo companyo haso alsoo referredo too theo RBIo Mastero CircularoNo.RBI/2015-16/16oDNBRo(PD)oCCoNo.054/03.10.119/2015-16o datedo 01.07.2015,o issuedo too allo Non-Bankingo Financeo Companieso ando Residuaryo Non-Bankingo Companieso ono Fairo Practiceso Codeo whereo theo clarificationohasobeenoissuedoandotheosameoisoextractedoasounder:-ooooo "(x)oClarificationoregardingorepossessionoofovehiclesofinancedo RAJ KUMAR ARORA byoNBFCs:-o CWP-7599-2020o(O&M).oo -20-o o 2023:PHHC:133251o o o

o NBFCso musto haveo ao builto ino re-possessiono clauseo ino theo contract/loano agreemento witho theo borrowero whicho musto beo legallyo enforceable.oToo ensureotransparency,o theo termsoando conditionsoofotheocontract/loanoagreementoshouldoalsoocontaino provisionso regarding:o (a)o noticeo periodo beforeo takingo possession;o(b)ocircumstancesounderowhichotheonoticeoperiodo canobeowaived;o(c)otheoprocedureoforotakingopossessionoofotheo security;o(d)oaoprovisionoregardingofinalochanceotoobeogivenotoo theoborrowerofororepaymentoofoloanobeforeotheosaleo/oauctiono ofotheoproperty;o(e)otheoprocedureoforogivingorepossessionotoo theoborrower;oando(f)otheoprocedureoforosaleo/oauctionoofotheo property.oAocopyoofosuchotermsoandoconditionsomustobeomadeo availableotootheoborroweroinotermsoofocircularowhereinoitowaso statedothatoNBFCsomayoinvariablyofurnishoaocopyoofotheoloano agreementoalongowithoaocopyoeachoofoalloenclosuresoquotedoino theoloanoagreementotooallotheoborrowersoatotheotimeoofosanctiono /odisbursementoofoloans,owhichomayoformoaokeyocomponentoofo suchocontracts/loanoagreements."o (emphasisosupplied)o o o o o TheorespondentoFinanceoCompanyoclaimedothatoitocompliedo withotheoaforesaidorequirementsoofotheoFairoPracticesoCodeoandorepossessedo theovehicleoasoperolaw.oAmpleoopportunitiesowereograntedotootheopetitionero toorepayotheooutstandingoamountoorotooclearotheooutstandingoloan,ohowever,o noostepsowereotakenobyotheopetitioner.oTheoloanoagreementogivingoallotheo aforesaido informationo ando clauseso waso alwayso ino possessiono ofo theo petitioner.oHeowasothusoawareoofohisoobligationotooclearotheooutstandingo amountoonoreceiptoofotheonoticeoandowithinotheoperiodoprescribedotherein.oAo secondoopportunityoinopre-saleonoticeowasoalsooofferedotootheopetitionerotoo CWP-7599-2020o(O&M).oo -21-o o 2023:PHHC:133251o o o

clearo theo dues,o settleo theo accountso ando takeo possessiono ofo theo vehicle.o However,o withouto benefittingo hiso obligations,o theo petitionero submittedo representationotootheopoliceoAuthoritiesoinoMayo2020owhichoisoanoabuseoofo theo processo ofo lawo byo ao defaulter.o Referenceo waso alsoo madeo too certaino judicialopronouncements,ohowever,otheosameowouldobeoreferredoinotheolatero partoofotheojudgment.oo o Separateo writteno statemento hado beeno filedo ono behalfo ofo respondentso No.4o too 6o whereino ito isosubmittedo thatotheopetitionero nevero movedoanyoapplicationotootheoSenioroSuperintendentoofoPolice,oKhanna,oono

18.05.2020oandothatoanoapplicationowasomovedoono02.06.2020owhichowaso markedotooDSPo(Crime),oKhannaoandothereafterotootheoDSP,oKhanna.oTwoo noticeso (parwana)o bearingo No.639o datedo 11.06.2020o ando No.239o o datedo

12.06.2020ohadobeenosentotootheopetitionerotoojoinoinvestigation,ohowever,o heo failedo too joino theo investigationo ono botho theo occasionso whereaso theo statementoofoTejinderoSinghoCharteredoAccountantoofotheorespondentowaso recordedo ono 15.06.2020o whereino ito waso informedo thato vehicleo waso impoundedobyotheopetitioneroono07.03.2020othroughoPuniaoRepooAgencyoato Kansabhal,oDistrictoSardoolgarh,oOrissaoandothatotheorepossessionoasowello aso impoundingo waso outsideo theo territorialo jurisdictiono ofo theo Stateo ofo Punjab.oItowasofurtheroaverredothatotheoallegationsoleveledobyotheopetitionero aboutotheovehicleohavingobeenoforciblyorecoveredoatogunopointoatonightoono

07.03.2020owereoprimaofacieofoundotoobeofalse.oNooattemptowasomadeobyo theo petitionero too informo ono theo controlo roomo oro too seeko anyo policeo assistanceo immediatelyo ono occurrenceo ofo theo event.o Thereo waso noo contemporaneousoevidenceoasowouldobeoindicativeoofoaonaturaloreactionotoo CWP-7599-2020o(O&M).oo -22-o o 2023:PHHC:133251o o o

supportotheoclaimomadeobyotheopetitioner.oTheoapplicationoinvariablyowasoano afterthought.oo REPLICATIONo oo Replicationotootheowrittenostatementofiledobyotheorespondentso No.7o ando 8/Financeo companyo waso filedo byo theo petitionero whereino theo avermentsoraisedoinotheowritopetitionowereoreiteratedoandotheoactionoofotheo respondento too liquidateo theo asseto foro ao sumo ofo Rs.10,75,000/-o despiteo valuationoatoRs.13,50,000/-owasostatedotoobeoinoanoundueohaste.oAnoattempto wasomadeotoore-justifyotheoclaimoaboutotheooutstandingoduesoandotheointerimo orderowherebyotheonoticeoofomotionowasoissued.oReferenceowasomadeotoo certainojudgmentsotoosupportomaintainabilityoofotheowritopetitionoagainstotheo non-Bankingo Financeo Companies.o Ito waso alsoo averredo thato theo vehicleo recoveryowouldonotobeojustifiedoinotermsoofoClauseo14oandoreceiptoofotheo noticesowasodenied.oo o Nooreplicationotootheowrittenostatementofiledobyotheoofficialo respondentsoNo.4otoo6owas,ohowever,ofiled.oThereowasoalsoonoodenialoofotheo avermentsomadeobyotheofinanceocompanyothatorecoveryoofotheovehicleotooko placeoinoOrissa.oo ARGUMENTSoBYoTHEoPETITIONERSoo oo Learnedo counselo appearingo foro theo petitioner(s)o haveo vehementlyo arguedo thato recoveryo ofo theo vehicleo througho deploymento ofo forceo moduleo ofo recoveryo agentso waso illegalo more-soo wheno substantialo amountohadoalreadyobeenopaidobyotheopetitioner.oItowasofurtheroarguedothato theonon-bankingofinanceocompanies,obeingolicencees'ounderotheoReserveo Banko ofo Indiao Act,o 1934,o areo amenableo too supervisoryo controlo ofo theo CWP-7599-2020o(O&M).oo -23-o o 2023:PHHC:133251o o o

ReserveoBankoofoIndiaoandothatotheoguidelinesoissuedobyotheoReserveoBanko ofoIndiaoareobindingoonotheseoPrivateofinanceocompanies.oNon-complianceo ofo theo guidelineso framedo byo theo Reserveo Banko ofo Indiao wouldo entailo consequencesoagainstotheofinanceocompaniesoandowouldovitiateotheoactiono takeno byo them.o Variouso guidelines/directionso haveo beeno issuedo byo theo Hon'bleoSupremeoCourtoofoIndiaoasowelloasodifferentoHighoCourtsofromotimeo tootimeoforore-possessionoofovehicleoandothatosuchoguidelinesohaveobeeno flouted.o Besides,o aso theo borrowerso ino theo presento caseo happenso too beo residingowithinotheoterritorialojurisdictionoofothisoCourtoandotheofinanceohado alsoobeenoobtainedothroughotheobranchoofficesosituatedowithinotheoterritorialo jurisdiction,ohence,otheorespondentsowouldobeoamenableotoochallengeoraisedo againstotheiroactionobeforeothisoCourtoevenothoughore-possessionomayobeo outsideotheoterritorialojurisdiction.oRelevantojudgmentsoreliedouponobyotheo petitioner(s)otoosubstantiateotheiroargumentsoareoextractedoasounder:-oo o Citicorp.oMarutioFinanceoLtd.oVs.oS.oVijayalaxmi,oreportedo aso2012o(1)oSCCo1o(I.D.o#o274701).oooo "o21.oSinceoduringotheopendencyoofotheoSpecialoLeaveoPetitionso beforeothisoCourt,otheoAppellantohadocompliedowithotheoorderso ofo theo Districto Forumo ando theo Nationalo Commissiono hado alreadyosetoasideotheopunitiveodamagesoimposedobyotheoStateo Commission,otheoreliefsoprayedoforoonobehalfoofotheoAppellanto hado beeno renderedo ineffectiveo ando theo submissionso were,o therefore,ochannelledotowardsotheoquestionoofowhetherotheoforao belowo wereo righto ino holdingo thato theo vehicleso hado beeno illegallyoand/orowrongfullyorecoveredobyouseoofoforceofromotheo loanees.o Theo aforesaido questiono haso sinceo beeno settledo byo severalo decisionso ofo thiso Courto ando ino particularo ino theo decisiono renderedo ino ICICIo Banko Ltd.o Vs.o Prakasho KauroRAJ KUMAR ARORA CWP-7599-2020o(O&M).oo -24-o o 2023:PHHC:133251o o o

(supra).oItois,onot,otherefore,onecessaryoforousotoogoointootheo saidoquestionoallooveroagainoandoweoreiterateotheoearlieroviewo takenoothatoevenoinocaseoofomortgagedogoodsosubjectotooHire-Purchaseo Agreements,o theo recoveryo processo haso too beo ino accordanceowitholawoandotheorecoveryoprocessoreferredotooino theoAgreementsoalsoocontemplatesosuchorecoveryotoobeoeffectedo inodueoprocessoofolawoandonotobyouseoofoforce.oTillosuchotimeoaso theoownershipoisonototransferredotootheopurchaser,otheohirero normallyocontinuesotoobeotheoowneroofotheogoods,obutothatodoeso notoentitleohimoonotheostrengthoofotheoagreementotootakeobacko possessionoofotheovehicleobyouseoofoforce.oTheoguidelinesowhicho hadobeenolaidodownobyotheoReserveoBankoofoIndiaoasowelloaso theoAppellantoBankoitself,oinofact,osupportoandomakeoaovirtueoofo suchoconduct.oIfoanyoactionoisotakenofororecoveryoinoviolationo ofo sucho guidelineso oro theo principleso aso laido downo byo thiso Court,osuchoanoactionocannotobutobeostruckodown."o oo Manager,oICICIoBankoLtd.oVs.oPrakashoKaur,oreportedoaso 2007o(2)oSCCo711.oooo "15.oBeforeoweopartowithothisomatter,oweowishotoomakeoitoclearo thatoweodoonotoappreciateotheoprocedureoadoptedobyotheoBanko ino removingo theo vehicleo fromo theo possessiono ofo theo writo petitioner.oTheopracticeoofohiringorecoveryoagents,owhooareo musclemen,oisodeprecatedoandoneedsotoobeodiscouraged.oTheo Bankoshouldoresortotooprocedureorecognizedobyolawotootakeo possessionoofovehiclesoinocasesowhereotheoborroweromayohaveo committedodefaultoinopaymentoofotheoinstallmentsoinsteadoofo takingoresortotoostrongoarmotactics."o o o o RelianceowasoalsooplacedoonotheojudgmentoofoICICIoBankoVs.o ShantioDevioSharmaoandoothers,o2008o(7)oSCCo532,oasowelloasoDivisiono BenchojudgmentoofothisoCourtoinoCWPoNo.2196oofo2021otitledoasoAmarjito CWP-7599-2020o(O&M).oo -25-o o 2023:PHHC:133251o o o

KauroVs.oTheoGovernoroReserveoBankoofoIndiaoandoothers,odecidedoono

10.03.2022,o too contendo thato theo repossessiono byo hiringo goonso iso impermissibleoandothatotheoFinanceocompaniesohaveotootakeorecourseotootheo procedureorecognizedobyolawotootakeopossessionoofotheovehiclesoinocaseso whereo theo borrowero mayo haveo committedo defaulto ino paymento ofo installments,o rathero thano strongo arm-tactics.o Ao defaulto byo theo hireo purchaser,owhooalthoughoisonototheoowner,obutoisoinopossessionowouldonoto entitleotheofinanceocompanyotootakeoforcibleopossessionoofotheovehicle.oo o o RelianceowasoalsoomadeotootheojudgmentoofothisoCourtoinotheo matteroofoGauravoMago,oManager,oKotakoMahindraoPrimeoLimitedoVs.o StateoofoPunjaboandoothers,opassedoinoL.P.A.oNo.1304oofo2010odecidedoono

20.07.2011o aso wello aso ino theo caseo ofo Sukhwindero Singho Vs.o Stateo ofo PunjaboandoothersobearingoCWPoNo.1180oofo2010odecidedoono14.07.2010.oo o o Referenceo waso alsoo madeo too theo judgmento ofo theo Divisiono BenchoofoHon'bleoAllahabadoHighoCourtoinotheomatteroofoSrioRamoUmraoo Vs.o Managingo Directoro Induslando Banko Ltd.o ando others,o reportedo aso 2012o(41)oRCRo(Civil)o77;otheoDivisionoBenchojudgmentoofoHon'bleoDelhio HighoCourtoinotheomatteroofoDr.oAmitabhoVarmaooVs.oTheoCommissionero ofoPoliceoandoothers,oreportedoaso2003o(1)oRCRo(Criminal)o651oasowelloaso inotheomatteroofoMuthootoLeasingoandoFinanceoLtd.oVs.oM/soVasudevao PublicityoServiceoandoanother,oreportedoaso2003o(4)oRCRo(Criminal)o259.oo TheorelevantoextractoofotheodirectionsogivenobyotheoHon'bleoDelhioHigho Courtoareoreproducedoasounder:-ooooooooooo "6.o Theo trialo courto placedo relianceo ono ao Divisiono Bencho judgmento ofo thiso Courto ino Dr.o Amitabho Varmao v.o Theo Commissionero ofo Policeo ando Others,o 2003(1)o RCRo CWP-7599-2020o(O&M).oo -26-o o 2023:PHHC:133251o o o

(Criminal)o651o(Delhi):o2003(1)oApexoDecisionso(Delhi)o329o whereinothisoCourtogaveotheofollowingoguidelines:o o

(1)oTheofinanceocompaniesomustoinformotheohirersoregardingo theo detailso ofo instalmentso dueo ando payableo byo ao writteno communication.o o

(2)oEvenobeforeorepossessionoanotherowrittenonoticeomustobeo sento too theo hirerso ando onlyo thereaftero theo vehicleso beo repossessed.oo o

(3)o Financeo companieso areo restrainedo fromo stoppingo theo runningo vehicleso ono theo roadso ando forciblyo pullingo outo theo drivero ando takeo possessiono ofo theo vehicleo againsto allo provisionsoofolaw."o o o o o Whileo addressingo ono theo issueo ofo maintainabilityo ofo ao writo petitiono againsto theo Financeo Company,o ao referenceo waso madeo too theo judgmentoinotheomatteroofoM/soA-OneoMegaoMartoPvt.oLimitedoandootherso Vs.oHDFCoBankoandoanother,obearingoCWPoNo.2250oofo2010,odecidedoono

14.09.2012.ooTheorelevantoextractoofotheosameoreadsothus:-oo o "28.oFromotheoabove,oitoisoconcludedothatoordinarilyonoowrito wouldolieoagainstoaoprivateoBank.oHowever,owhereotheoBankoiso aoScheduledoBankounderoReserveoBankoofoIndiaoAct,o1934oando iso governedo byo theo provisionso ofo Bankingo Regulationo Act,o 1949,oitoshallobeoamenableotoowritojurisdictionoofothisoCourto whereotheoScheduledoBankotakesorecourseotootheoprovisionsoofo SARFAESIoAct."o o CWP-7599-2020o(O&M).oo -27-o o 2023:PHHC:133251o o o

o o Relianceowasoalsooplacedoonotheojudgmentodatedo19.05.2023o passedoinotheomatteroofoDhananjayoSethoVs.oTheoUnionoofoIndiaoinoCivilo WritoJurisdictionoCaseoNo.3456oofo2021odecidedoono19.05.2023obyotheo Hon'bleoPatnaoHighoCourt.oTheorelevantoextractoo o "60.o Theo Bankso ando theo Financeo Companieso whoo areo contestingotheseomattersoareounderoaoconstitutionaloobligationo nototooactoinoviolationoofolaw.oTheyocannotoactoinoconflictowitho theofundamentaloprinciplesoandopolicyoofoIndiaowhichomeanso thatonoopersonomayobeodeprivedoofohisolivelihoodoandotheorighto too liveo witho dignityo withouto followingo theo establishedo procedureoofolaw.oTheorightotoorecoveryoofotheseoBanksoando FinancialoInstitutionsoifopittedoagainstotheoconstitutionalorighto ofo'life'oofoaoperson/petitionerotooliveowithodignityoandonototoobeo deprivedo ofo withouto followingo theo establishedo procedureo ofo law,otheoconstitutionalorightsoofotheoperson/petitionersoshallo prevail.oInothisoconnection,othisoCourtoisotemptedotooreiterateo thato theseo areo theo rightso conferredo byo Parto IIIo ofo theo ConstitutionoofoIndiaotoo'aoperson'owhichoareotoobeohonouredo byoandoalsooenforceableoagainst,onon-Stateoactors.oTheoprivateo rightsoofotheocontestingorespondentsomustobeoexercisedowithino theoconstitutionalolimitationsoandoinoaccordanceowitholaw.oo o

61.oInoresult,othisoCourtofindsothatotheoactionoofotheocontestingo respondentso ino seizure/re-possesso theo vehicleo withouto followingotheoRBIoguidelinesoandotheolawoasoalsootheojudicialo pronouncementso ono theo subjecto iso whollyo illegal.o Ito iso ino violationo ofo lawo ando depriveo theo petitionerso ofo theiro fundamentalo rightso ofo livelihoodo ando theo righto too liveo witho dignityowhichoareoincludedoinoArticleo21oofotheoConstitutionoofo India.o xxxo xxxo xxxo CWP-7599-2020o(O&M).oo -28-o o 2023:PHHC:133251o o o

ObservationsoandoDirectionsoo

64.oHavingodiscussedotheoentireofactsoandocircumstancesoofotheo caseoandotheolawsoonotheosubject,othisoCourtowouldomakeoito clearo thato soo faro aso theo allegationso againsto theo Bankso ando Financialo Institutionso thato theyo hado forciblyo seized/repossessedo theo vehicleso iso concerned,o thiso Court,o insteado ofo dwellingo mucho upono thato issueo ino theo presento proceeding,oleavesoitoopenoforotheoInvestigatingoAgencyotoolooko intoo theo complaintso ofo theo petitionerso ando investigateo themo independentlyo ando ino accordanceo witho law.o Thiso Courto haso mainlyoconcentratedoonotheopleaoofotheoBanksoandoFinancialo Institutionso thato theyo cano seizeo ando repossesso theo vehicleo withouto takingo recourseo too lawo ando legalo procedureso aso envisagedo undero theo Acto ofo 2002o ando theo Ruleso framedo thereunder.oThus,oevenoasotheoallegationsoofoforcefuloseizureo andopossessionohasobeenotakenonoteoof,otheosameowouldonoto comeoinotheowayoofoanoindependentoinvestigation.oThisoCourto hasofoundothatoatoleastoinooneocaseo(C.W.J.C.oNo.o16155oofo 2021)oaofirstoinformationoreportobeingoSadaroP.S.oCaseoNo.o22o ofo2023odatedo08.01.2023ohasobeenolodgedobyotheopetitioner'so husband.o Ino caseo othero petitionerso haveo alsoo lodgedo anyo complaintowithotheorespectiveopoliceostation,otheosameowillobeo registeredo ando dulyo investigated.o Ito iso stillo openo too theo petitionerso too lodgeo theiro respectiveo complainto witho theo jurisdictionalo policeo stationo withino whoseo jurisdictiono theo vehicleoinoquestionohasobeenoseizedoandorepossessedoallegedlyo byouseoofoforce.oo o

65.o Sinceo thiso Courto haso comeo too ao conclusiono thato theo covenantsoinotheoloanoagreementoofotheseocasesoareoatobesto creatingo ao 'securityo interest'o ino theo 'securedo asset'o i.e.o theo vehicleoinofavouroofotheoBanksoandoFinancialoInstitutions,oaso theocaseomayobe,othisoCourtodirectsothatotheoBanks/Financialo RAJ KUMAR ARORA Institutionso whoo areo contestingo respondentso ino theseo caseso CWP-7599-2020o(O&M).oo -29-o o 2023:PHHC:133251o o o

shallohenceforth,oexerciseotheiropowerotooseizeoandorepossesso theovehicleoonlyoinoaccordanceowithotheoprovisionsoofotheoActo ofo 2002,o ando theo Ruleso framedo thereundero ando theo RBIo guidelines.o Theiro righto too seizeo oro re-o possesso iso noto ino question,oitoisotheomanneroinowhichoitoisobeingoexercisedoiso illegal,ohence,otheyocannotocontinueowithotheosame.oo o

66.o Theo Superintendento ofo Policeo ofo allo theo districtso ino theo Stateo ofo Biharo areo directedo too ensureo thato withino theiro jurisdictiono noo recoveryo agento ofo theo Banko ando Financialo Institutiono mayo takeo theo lawo intoo theiro hands,o intercepto theo vehiclesoonowayoandotakesopossessionoofotheovehicleoinodefaulto withouto ano ordero ofo theo competento courto ofo law.o Anyo seizure/repossessiono ofo theo vehicleo ino defaulto mayo beo giveno effectotooonlyoinoaccordanceowithotheolawoandotheoprocedureo establishedobyolaw;o o

67.oInoallosuchocasesowhereotheovehiclesohaveonotobeenosold,o theopetitioner(s)o ando theo Bank/Financialo Institutionothrougho it'soauthorizedorepresentativeoshallositotogetheroandoreconcileo theoaccountotoodetermineotheoamountodueoinotheoloanoaccount,o however,otheoBank/FinancialoInstitutionoshallonotochargeoanyo interestoforotheoperiododuringowhichotheovehicleoremainedoino seizureoandotheyowillotreatotheoCovid-19operiodoinoaccordanceo witho lockdowno notification.o Sucho reconciliationo beo madeo withino ao periodo ofo fouro weekso fromo todayo whereupono theo petitioner(s)oshallopayo30%oofotheooutstandingoamountoandogeto releaseoofotheovehicleoafterogivingoanoundertakingothatoheowillo payo theo resto ofo theo 70%o ofo theo outstandingo amounto witho applicableo interesto fromo theo dateo ofo handingo overo theo possessionoofotheovehicleotillotheodateoofopaymentoinosuitableo installmentso aso mayo beo decidedo byo theo Banks/Financialo Institutions.oInotheomeantime,otheopetitioner(s)oshallocontinueo RAJ KUMAR ARORA toopayotheocurrentoEMI,ofailingowhichoitowillobeoopenotootheo CWP-7599-2020o(O&M).oo -30-o o 2023:PHHC:133251o o o

Bank/FinancialoInstitutionotooproceedoagainstotheopetitioner(s)o inoaccordanceowithotheoprovisionsoofotheoActoofo2002oandotheo Rulesoframedothereunderotoore-possessotheovehicle.o o

68.oInotheocasesowhereotheovehicleohasobeenosoldotooaothirdo partyoandotheoBank/FinancialoInstitutionoisonotoinoaopositionotoo restoreo theo vehicle,o theyo wouldo beo liableo too payo theo petitioner(s)otootheoextentoofotheovalueoofotheovehicle(s)oasopero theiroinsuranceovalueoonotheodateoofotheiroseizure.oTheosaido amountoshallobeoadjustedoagainstotheooutstandingovehicleoloano andothereafteroifoanyosurplusocomesooutotheosameowillobeomadeo availableotootheopetitioner.oItowillobeoopenoforotheopetitioners,oifo soo advisedo too challengeo theo accountso furnishedo byo theo Banks/FinancialoInstitutionsoandoclaimoanyocompensationoetc.o forotheolossoarisingooutoofoseizureoofotheirorespectiveovehicleso beforeoappropriateocourt/forum.oo o

69.o Sinceo theo actiono ofo theo Banks/Financeo Companieso areo foundoillegal,otheopetitionersowhoohaveobeenomadeotoocontesto thisocaseoshallobeoentitledoforocostoofolitigation.oAccordingly,o thisoCourtodirectsothatoeachoofotheocontestingorespondentsoi.e.o Banks/FinancialoInstitutionsowouldobeoliableotoopayoaosumoofo Rs.o 50,000/-o (fiftyo thousand)o aso costo ofo litigationo too theo respectiveowritopetitionersowithinoaoperiodoofo30odaysofromotheo dateooforeceipt/productionoofoaocopyoofothisojudgment."o o o o o ReferenceowasoalsoomadeotootheojudgmentoofothisoCourtoinotheo matteroofoTarunoBhargavaoVs.oStateoofoHaryana,oreportedoaso2002o(3)o RCR(Criminal)o312oasowelloasotootheojudgmentoinotheomatteroofoNarindero KumaroSinglaoVs.oStateoofoPunjaboandoanother,oreportedoaso2006o(3)o RCRo(Criminal)o890;oandoM/soSundramoFinanceoLimited,oChennaioVs.o CWP-7599-2020o(O&M).oo -31-o o 2023:PHHC:133251o o o

RajoKumaroandoanother,oreportedoaso2011o(4)oRCRo(Criminal)o890;oM/so PunjaboKashmiroFinanceoLimitedoVs.oTheoStateoofoHaryanaoandoanother,o reportedoaso2008o(2)oRCRo(Criminal)o52;oinotheomatteroofoBhahuleyanoVs.o StateoofoKeralaoandoothers,oreportedoaso2007o(4)oRCRo(Criminal)o471;oando alsoo too theo judgmento ino theo mattero ofo Dharmendrao Kumaro Yadavo Vs.o Managero Commercialo Autoso Saleso (Pvt.)o Ltd.o Allahabad,o 2010o SCCo OnlineoAllo2348oonotheoaboveoproposition.oo SUBMISSIONSoONoBEHALFoOFoRESPONDENTSo o o Learnedocounseloappearingoonobehalfoofotheorespondent(s),oono theootherohand,ohaveoreferredotootheojudgmentsoofotheoHon'bleoSupremeo Courto ino theo mattero ofo M/so Magmao Fincorpo Ltd.o Vs.o Rajesho Kumaro Tiwari,oreportedoaso(2020)o10oSCCo399.oTheorelevantoextractoofotheosaido judgmentoreadsothus:o "74.oAohire-purchaseois,ohoweveroaomoreocomplexotransactiono whereotheoowneroentersointooaotransactionoofohiringooutogoodso onotheotermsoandoconditionsosetooutoinotheoagreement,oandotheo optionotoopurchase,oexercisableobyotheocustomeroonopaymentoofo allotheoinstalmentsoofohire,oarisesowhenotheoinstalmentsoareo paidoandonotobefore.oInosuchoaohire-purchaseoagreementothereo iso noo agreemento too buyo goods;o theo hirero beingo undero noo obligationotoobuy,ohasoanooptionoeitherotooreturnotheogoodsooro toobecomeoitsoownerobyopaymentoinofulloofotheostipulatedohireo ando theopriceoforo exercisingo theooption.oThiso classoofohire-purchaseoagreementsomustobeodistinguishedofromotransactionso inowhichotheocustomeroisotheoowneroofotheogoodsoandowithoao viewotoofinanceohisopurchaseoheoentersointooanoarrangemento whichoisoinotheoformoofoaohire-purchaseoagreementowithotheo financier,o buto ino substanceo evidenceso ao loano transaction,o CWP-7599-2020o(O&M).oo -32-o o 2023:PHHC:133251o o o

subsequentotooaohiringoagreement,ounderowhichotheolenderoiso givenotheolicenseotooseizeotheogoods.oo o

75.oInotheoaforesaidocase,otheomajorityoofotheojudgesowereoofo theoviewothatotheointentionoofotheoappellantsoinoobtainingotheo hirepurchaseoandoalliedoagreementsowasotoosecureotheoreturno ofotheoloansoadvancedotootheirocustomersoandonoorealosaleoofo theovehicleowasointendedobyotheocustomerotootheoappellants.o Theo transactionso wereo merelyo financialo transactions.o Theo judgmentoofothisoCourtoinoSundaramoFinanceoLtd.o(supra)owaso renderedoinotheocontextoofotheoliabilityoofoaohirerotoopayosaleso taxo ono theo goodso acquiredo undero theo Hireo Purchaseo Agreement.oo o

76.o Ino Sundaramo Financeo Ltd.o (supra),o Subbao Rao,o Jo deliveredoaodissentingojudgmentoholding:-oo "6.oTheoobjectoofotheohire-purchaseosystemowasotoohelpotoo financeotheocustomeroinoorderothatoheomightopurchaseotheo property.oThoughothatowasotheoobject,otheotransactionotooko theoformoofohire-purchaseoagreement.oTheomainofeatureoofo theoagreement,oapartofromosmallovariations,owasothatotheo dealeroorotheofinancierocontinuedotoobeotheoownerotillotheo termso ofotheo agreemento wereo fullyo compliedo witho byo theo customero ando theo optiono too purchaseo theo sameo waso exercisedobyohim.oIfotheotermsowereonotocompliedowith,otheo dealero oro theo financier,o aso theo caseo mayo be,o couldo terminateotheoagreementoandotakeobackotheogoods.oInosucho ao transaction,o theo commono intentiono ofo theo dealer,o theo financieroandotheocustomerowasothatotheotransactionoshouldo takeotheoformoofoaohire-purchaseoagreementowhichowouldo becomeo ao saleo ono theo complianceo ofo theo termso ofo thato agreement.oNoodoubtotheofinancingooperationocouldohaveo takenotheoformoofoaomortgageooropledge,obutotheoparties,oforo CWP-7599-2020o(O&M).oo -33-o o 2023:PHHC:133251o o o

theiro mutualo benefito ando convenience,o enteredo intoo ao hirepurchaseotransaction.oo

7.o Ino theo absenceo ofo anyo fraudo oro undueo influence,o theo questionoresolvesoitselfointooaosimpleoquestionoofointention.o Theotransactionsowereoinoaccordanceowithotheomercantileo usage.oBothotheofinancieroandotheocustomersowithoopenoeyeso enteredo intoo theo transactionso ofo hire-purchase.o Theiro intentionowasoexpressedoinoclearoterms.oTheyocouldohaveo executedo hypothecationo bonds,o buto theyo dido not,o ando insteadoenteredointoohire-purchaseotransactions.oThereowaso noo reasono too camouflageo theo realo natureo ofo theo transactions.oNoneowasosuggested.oTheyowere,otherefore,o boundobyotheotermsoofotheoagreements."o o

77.oTheolawowhichoemergesofromotheojudgmentsoofotheoCourto referredotooabove,oisothatogoodsoareoletooutoonohireounderoao Hireo Purchaseo Agreement,o witho ano optiono too purchase,o ino accordanceo witho theo termso ando conditionso ofo theo Hireo PurchaseoAgreement.oTheohirerosimplyopaysoforotheouseoofotheo goodsoandoforotheooptionotoopurchaseothem.oo o

78.o Untilo theo optiono too purchaseo iso exercisedo byo theo hirer,o uponopaymentoofoalloamountsoagreedouponobetweenotheohirero andotheoFinancier,otheofinancierocontinuesotoobeoowneroofotheo goodsobeingotheosubjectoofohireopurchase.oTillosuchotimeotheo hireroremainsoaotrusteeoand/orobaileeoofotheogoodsocoveredobyo theoHireoPurchaseoAgreement.oo o

79.oTheoFinancierocontinuesotooremainotheoowneroofoaovehicle,o coveredo byo ao hireo purchaseo agreemento tillo allo theo hireo instalmentso areo paido ando theo hirero exerciseso theo optiono too purchase.oThus,owhenotheoFinancierotakesore-possessionoofoao vehicleounderohire,ouponodefaultobyotheohireroinopaymentoofo CWP-7599-2020o(O&M).oo -34-o o 2023:PHHC:133251o o o

hireo instalments,o theo Financiero takeso repossessiono ofo theo Financier'soownovehicle.o ooo

80.oWhenotheoagreementobetweenotheoFinancieroandotheohirero permitsotheoFinancierotootakeopossessionoofoaovehicleofinancedo byo theo Financier,o thereo iso noo legalo impedimento too theo Financierotakingopossessionoofotheovehicle.oWhenopossessiono ofotheovehicleoisotaken,otheoFinancierocannotobeosaidotoohaveo committedotheft.oo o

81.o Whethero theo transactiono betweeno ao Financiero ando ao purchaser/hirero iso ao hireo purchaseo transaction,o oro ao loano transaction,o mighto beo determinedo fromo theo termso ofo theo agreement,o consideredo ino theo lighto ofo surroundingo circumstances.oHowever,oevenoaoloanotransaction,osecuredobyo rightoofoseizureoofoaofinancedovehicle,oconfersolicenceotootheo Financierotooseizeotheovehicle.o o

82.oInothisocase,otheoagreementoexecutedobyoandobetweenotheo FinancieroandotheoComplainantoisoaoHireoPurchaseoAgreemento asowilloappearofromotheotermsoandoconditionsothereof.oInoanyo event,otheoforaounderotheoConsumeroProtectionoAct,ohaveonoto arrivedoatoanyospecificofindingotootheocontrary.oThereoisonoo discussiono ofo theo natureo ofo theo agreemento betweeno theo Financiero ando theo Complainant.o Beo thato aso ito may,o theo agreementoclearlyopermitsotheoFinancierotootakeopossessionoofo theovehicle,ouponodefaultoinopaymentoofoinstalments.oo o

83.oInoICICIoBankoLtd.ov.oPrakashoKauro&oOrs.o(2007)o2o SCCo711o53ocitedoonobehalfoofotheocomplainant,othisoCourto deprecatedotheopracticeoofohiring.oRecoveryoAgents,owhoowereo musclemenotootakeopossessionoofovehiclesoinocases,owhereotheo borrowero mighto haveo committedo defaulto ino paymento ofo RAJ KUMAR ARORA instalments.oThisoCourtoheld:-oo CWP-7599-2020o(O&M).oo -35-o o 2023:PHHC:133251o o o

o "16.oBeforeoweopartowithothisomatter,oweowishotoomakeoito clearothatoweodoonotoappreciateotheoprocedureoadoptedobyo theoBankoinoremovingotheovehicleofromotheopossessionoofo theowritopetitioner.oTheopracticeoofohiringorecoveryoagents,o whoo areo musclemen,o iso deprecatedo ando needso too beo discouraged.o Theo Banko shouldo resorto too procedureo recognizedobyolawotootakeopossessionoofovehiclesoinocaseso whereo theo borrowero mayo haveo committedo defaulto ino paymento ofo theo instalmentso insteado ofo takingo resorto too strong-armotactics."oo o

84.o Theo Judgmento waso renderedo ino theo factso ando circumstancesoofotheocaseowhereoitowasoallegedothatopossessiono ofoaotruckohadobeenotaken,obyoengagingogoonsoandomusclemeno aso Recoveryo Agents.o Theo disputeso wereo settledo beforeo thiso Courto ino viewo ofo theo submissiono ofo Counselo thato theo trucko couldobeoreturnedouponopaymentoofoaosumoofoRs.50,000/-.oo o

85.oInoCiticorpoMarutioFinanceoLtd.ov.oS.oVijaylaxmio(2012)o1o SCCocitedobyotheocomplainant,othisoCourtoheldothatotheoforao undero theo Consumero Protectiono Act,o 1986o wereo righto ino holdingothatotheovehiclesohadobeenoillegallyoandowrongfullyo recoveredobyouseoofoforceofromotheoloanees.oTheojudgmentowaso renderedoinotheofactsoandocircumstanceoofotheocaseoandothiso Courtodeprecatedotheouseoofoforce.oInothisocase,othereowasonoo allegationoinotheocomplaintoofouseoofoforce.oSignificantly,oino CiticorpoMarutioFinanceoLtd.o(supra),oKabir,oJ.oheld:-oo o "27.oTillosuchotimeoasotheoownershipoisonototransferredotoo theo purchaser,o theo hirero normallyo continueso too beo theo owneroofotheogoods,obutothatodoesonotoentitleohimoonotheo strengthoofotheoagreementotootakeobackotheopossessionoofo RAJ KUMAR ARORA theovehicleobyouseoofoforce.oTheoguidelinesowhichohadobeeno CWP-7599-2020o(O&M).oo -36-o o 2023:PHHC:133251o o o

laido downo byo Reserveo Banko ofo Indiao aso wello aso theo appellantoBankoitself,oitofact,osupportoandomakeoaovirtueoofo sucho conduct.o Ifo anyo actiono iso takeno foro recoveryo ino violationoofosuchoguidelinesoorotheoprinciplesoasolaidodowno byothisoCourt,osuchoanoactionocannotobeostruckodown."oo o

86.o Thiso Courtoheldo thatotheo Financierocontinueso too beo theo owneroofotheogoods.oThereoisoanoobviousotypographicaloerroro ino paragrapho 27o ofo theo judgmento whereo hirero haso beeno erroneouslyobeenotypedoinoplaceoofolender/financier.oo o

87.oTheoquestionoraisedobyotheoFinancieroinothisoappeal,othato is,o whethero theo Financiero iso theo realo ownero ofo theo vehicle,o whichoisotheosubjectoofoaoHireoPurchaseoAgreement,ohasotoobeo answeredoinotheoaffirmativeoinoviewoofotheolawoenunciatedobyo thisoCourtoinoHaranjitoSinghoChadhao(supra),oK.L.oJoharo&o Co.o(supra)oandoAnupoSarmaho(supra).oTheoFinancierobeingo theo ownero ofo theo vehicleo whicho iso theo subjecto ofo ao Hireo Purchaseo Agreement,o thereo cano beo noo impedimento too theo Financierotakingopossessionoofotheovehicleowhenotheohirerodoeso notomakeopaymentoofoinstalments/hireochargesoinotermsoofotheo Hireo Purchaseo Agreement.o However,o sucho repossessiono cannoto beo takeno byo recourseo too physicalo violence,o assaulto and/oro criminalo intimidation.o Noro cano sucho possessiono beo takeno byo engagingo gangsters,o goonso ando musclemeno aso soo calledoRecoveryoAgents.o o

88.oWhetherotheoserviceoofoproperonoticeoonotheohirerowouldobeo necessaryofororepossessionoofoaovehicle,owhichoisotheosubjecto matteroofoaoHireoPurchaseoAgreement,owouldodependoonotheo termsoandoconditionsoofotheoHireoPurchaseoAgreement,osomeo ofowhichomayostandomodifiedobyotheocourseoofoconductoofotheo parties.oIfotheohireopurchaseoagreementoprovidesoforonoticeoono RAJ KUMAR ARORA theo hirero beforeo repossession,o sucho noticeo wouldo beo CWP-7599-2020o(O&M).oo -37-o o 2023:PHHC:133251o o o

mandatory.oNoticeomayoalsoobeonecessary,oifoaorequirementotoo giveonoticeoisoimplicitoinotheoagreementofromotheocourseoofo conductoofotheoparties.oo o

89.oIfotheohirerocommitsobreachesoofotheoconditionsoofoaohireo purchaseoagreementowhichoexpresslyoprovidesoforoimmediateo repossessionoofoaovehicleowithoutofurtheronoticeotootheohirer,oino caseo ofo defaulto ino paymento ofo hireo chargeso and/oro hireo instalmentso repossessiono wouldo noto beo vitiatedo foro wanto ofo notice.o Ino thiso case,o howevero ao dutyo too giveo noticeo too theo Complainanto beforeo repossession,o waso implicito ino theo Hireo Purchaseo Agreement.o Theo Hireo Purchaseo Agreemento waso ao stereotypeo agreemento ino ao standardo form,o preparedo byo theo Financier.oTheosameokindoofoagreements,ocontaining,oidenticalo terms,o excepto foro minoro modificationso areo executedo byo allo hirerso ofo vehicles,o equipment,o machineryo ando othero goods,o whooenterointoohireopurchaseoagreementsowithotheoFinancier.o TheoFinancierowhoosetodownotheotermsoandoconditionsoofotheo hireo purchase,o construedo theo hireo purchaseo agreemento too containoanoimpliedotermoforoserviceoofonoticeoandoaccordinglyo despatchedo ao notice,o buto dido noto addresso ito too theo correcto addresso ofo theo Complainanto aso giveno ino theo hireo purchaseo agreement.oo o

90.oInoaocaseowhereotheorequirementotooserveonoticeobeforeo repossessionoisoimplicitoinotheohireopurchaseoagreement,onono serviceo ofo propero noticeo wouldo tantamounto too deficiencyo ofo serviceoforobreachoofotheohireopurchaseoagreementogivingoriseo tooaoclaimoinodamages.oTheoComplainantoconsumerowouldobeo entitledotoocompensatoryodamages,obasedoonoanoassessmentoofo theolossocausedotootheocomplainantobyoreasonoofotheoomissiono toogiveonotice.oWhereothereoisonooevidenceoofoanyolossotootheo hirerobyoreasonoofoomissionotoogiveonotice,onominalodamageso CWP-7599-2020o(O&M).oo -38-o o 2023:PHHC:133251o o o

o

91.oAoforumoconstitutedounderotheoConsumeroProtectionoActo has,o aso observedo above,o theo powero too awardo punitiveo damages.oPunitiveodamagesoshould,ohowever,obeograntedoonlyo ino exceptionalo circumstances,o whereo theo actiono ofo theo Financieroisosooreprehensibleothatopunishmentoisowarranted.o Too citeo ano example,o whereo ao Financiero erroneouslyo and/oro wrongfullyoinvokesotheopowerotoorepossessowithoutonoticeotoo theohirer,ocausingotherebyoextensiveopecuniaryolossotootheohirero orolossoofogoodwilloandorepute,oaoforumoconstitutedounderotheo ConsumeroProtectionoActomayoawardopunitiveodamages.o o

92.o Ino theo instanto case,o thereo iso noo evidenceo ofo anyo losso sufferedo byo theo complainanto byo reasono ofo non-receipto ofo notice.o Admittedly,o severalo instalments,o remainedo unpaid.o Afterorepossessionotheocomplainantocontactedo theo Financiero andowasoinformedoofotheoreasonsoforotheorepossession.oHeoonlyo madeo ano offero too payo outstandingo instalmentso ando gaveo ano assuranceotoopayofutureoinstalmentsoinotime.oIfotheoFinanciero waso noto agreeableo too accepto theo offer,o theo Financiero waso withinoitsorightsounderotheohireopurchaseoagreement.oThisoiso notoaocaseowhereopaymentohadobeenotenderedobyotheohirerobuto notoacceptedobyotheoFinancier/lender.oTheoComplainantohado nototenderedopayment."o (emphasisosupplied)o oo o o Relianceo iso alsoo placedo ono theo judgmento ofo Hon'bleo theo SupremeoCourtoinotheomatteroofoPhoenixoARCoPrivateoLimitedoVs.oVishwao BharatioVidyaoMandiroandoothers,oreportedoaso2022o(5)oSCCo345.oTheo relevantoextractothereoforeadsothus:-o "5.1oNow,osoofaroasotheomaintainabilityoofotheowritopetitiono againsto theo Assetso Reconstructiono Companyo (ARC)o iso CWP-7599-2020o(O&M).oo -39-o o 2023:PHHC:133251o o o

concerned,oitoisosubmittedothatotheowritopetitionoisofiledoagainsto theoARCocomplainingoofoinfractionoofoRuleo8.oItoisosubmittedo thato theo saido ruleo imposeso ao statutoryo dutyo ono theo securedo creditoro-otheoARCotooactofairlyowhileodealingowithotheosecurityo sooasotoosecureotheointerestoofotheoborroweroasowelloasopublico ato largeo (depositors).o Ino supporto ofo aforesaido submission,o relianceoisoplacedoonotheodecisionoofothisoCourtoinotheocaseoofo J.o Rajivo Subramaniyano ando Anr.o Vs.o Pandiyaso ando Ors.,o

(2014)o5o SCCo651.oIto iso thereforeosubmittedothatoaso ino theo presentocaseoasotheoARCohasonotoperformedotheostatutoryodutyo castouponoitoandothereoisoaocontraventionoofotheostatutoryodutyo imposedo undero theo Securityo Interesto (Enforcement)o Rules,o 2002,oaowritowouldolieoagainstoARCoagainstosuchoanoillegalo action.o xxxo xxxo xxxo

12.o Eveno otherwise,o ito iso requiredo too beo notedo thato ao writo petitiono againsto theo privateo financialo institutiono –o ARCo –o appellantohereinounderoArticleo226oofotheoConstitutionoofoIndiao againstotheoproposedoaction/actionsounderoSectiono13(4)oofotheo SARFAESIo Acto cano beo saido too beo noto maintainable.o Ino theo presentocase,otheoARCoproposedotootakeoaction/actionsoundero theo SARFAESIo Acto too recovero theo borrowedo amounto aso ao securedo creditor.o Theo ARCo aso sucho cannoto beo saido too beo performingopublicofunctionsowhichoareonormallyoexpectedotoo beoperformedobyotheoStateoauthorities.oDuringotheocourseoofoao commercialotransactionoandounderotheocontract,otheobank/ARCo lentotheomoneyotootheoborrowersohereinoandothereforeotheosaido activityoofotheobank/ARCocannotobeosaidotoobeoasoperformingoao publicofunctionowhichoisonormallyoexpectedotoobeoperformedobyo theoStateoauthorities.oIfoproceedingsoareoinitiatedounderotheo SARFAESIoActoand/oroanyoproposedoactionoisotoobeotakenoando theoborroweroisoaggrievedobyoanyoofotheoactionsoofotheoprivateo bank/bank/ARC,oborrowerohasotooavailotheoremedyounderotheo RAJ KUMAR ARORA SARFAESIo Acto ando noo writo petitiono wouldo lieo and/oro iso CWP-7599-2020o(O&M).oo -40-o o 2023:PHHC:133251o o o

maintainableo and/oro entertainable.o Therefore,o decisionso ofo thisoCourtoinotheocasesoofoPragaoToolsoCorporationo(supra)o ando Ramesho Ahluwaliao (supra)o reliedo upono byo theo learnedo counseloappearingoonobehalfoofotheoborrowersoareonotoofoanyo assistanceotootheoborrowers.o o o xxxo xxxo xxxo

13.2oApplyingotheolawolaidodownobyothisoCourtoinotheocaseoofo Mathewo K.C.o (supra)o too theo factso ono hand,o weo areo ofo theo opiniono thato filingo ofo theo writo petitionso byo theo borrowerso beforeotheoHighoCourtounderoArticleo226oofotheoConstitutionoofo IndiaoisoanoabuseoofoprocessoofotheoCourt.oTheowritopetitionso haveobeenofiledoagainstotheoproposedoactionotoobeotakenoundero Sectiono13(4).oAsoobservedohereinabove,oevenoassumingothato theo communicationo datedo 13.08.2015o waso ao noticeo undero Sectiono 13(4),o ino thato caseo also,o ino viewo ofo theo statutory,o efficaciousoremedyoavailableobyowayoofoappealounderoSectiono 17oofotheoSARFAESIoAct,otheoHighoCourtooughtonototoohaveo entertainedo theo writo petitions.o Eveno theo impugnedo orderso passedobyotheoHighoCourtodirectingotoomaintainotheostatusoquoo withorespectotootheopossessionoofotheosecuredopropertiesoono paymentoofoRs.1ocroreoonlyo(inoalloRs.3ocrores)oisoabsolutelyo unjustifiable.o Theo dueso areo too theo extento ofo approximatelyo Rs.117ocrores.oTheoad-interimoreliefohasobeenocontinuedosinceo 2015o ando theo securedo creditoro iso deprivedo ofo proceedingo furtherowithotheoactionounderotheoSARFAESIoAct.oFilingoofotheo writo petitiono byo theo borrowerso beforeo theo Higho Courto iso nothingobutoanoabuseoofoprocessoofoCourt.oItoappearsothatotheo HighoCourtohasoinitiallyograntedoanoex-parteoad-interimoordero mechanicallyoandowithoutoassigningoanyoreasons.oTheoHigho Courto oughto too haveo appreciatedo thato byo passingo sucho ano interimoorder,otheorightsoofotheosecuredocreditorotoorecoverotheo amountodueoandopayableohaveobeenoseriouslyoprejudiced.oTheo securedocreditoroand/oroitsoassignorohaveoaorightotoorecovero RAJ KUMAR ARORA theoamountodueoandopayableotooitofromotheoborrowers.oTheostayo CWP-7599-2020o(O&M).oo -41-o o 2023:PHHC:133251o o o

grantedobyotheoHighoCourtowouldohaveoseriousoadverseoimpacto onotheofinancialohealthoofotheosecuredo24ocreditor/assignor.o Therefore,otheoHighoCourtoshouldohaveobeenoextremelyocarefulo ando circumspecto ino exercisingo itso discretiono whileo grantingo stayoinosuchomatters.oInotheseocircumstances,otheoproceedingso beforeotheoHighoCourtodeserveotoobeodismissed."o (emphasisosupplied)o o o o Relianceo waso alsoo placedo ono theo judgmento ofo Pragao Toolso CorporationoVs.oC.A.oImanualoandoothers,oreportedoaso1969o(1)oSCCo585o andotheorelevantoextractoreadsoasounder:-o "5.o Thuso theo onlyo questiono whicho ariseso ino thiso appealo iso whetheroinotheoviewothatoitotookothatotheowritopetitionowasonoto maintainableoagainstotheocompanyotheoHighoCourtocouldostillo grantotheosaidodeclaration.oo o

6.oo InoouroviewotheoHighoCourtowasocorrectoinoholdingothato theo writo petitiono filedo undero Art.o 226o claimingo againsto theo companyomandamusooroanoorderoinotheonatureoofomandamuso wasomisconceivedoandonotomaintainable.oTheowritoobviouslyo waso claimedo againsto theo companyo ando noto againsto theo conciliationoofficeroinorespectoofoanyopublicoorostatutoryodutyo imposedoonohimobyotheoActoasoitowasonotoheobutotheocompanyo whoosoughtotooimplementotheoimpugnedoagreement.oNoodoubt,o Art.o226oprovidesothatoeveryoHighoCourtoshallohaveopoweroto,o issueotooanyopersonooroauthorityoordersoandowritsoincludingo writsoinotheonatureoofohabeasocorpus,omandamusoetc.,ooroanyoofo themoforotheoenforcementoofoanyoofotheorightsoconferredobyo PartoIIIoofotheoConstitutionoandoforoanyootheropurpose.oButoitoiso wello understoodo thato ao mandamuso lieso too secureo theo performanceoofoaopublicoorostatutoryodutyoinotheoperformanceo ofo whicho theo oneo whoo applieso foro ito haso ao sufficiento legalo CWP-7599-2020o(O&M).oo -42-o o 2023:PHHC:133251o o o

interest.oThus,oanoapplicationoforomandamusowillonotolieoforoano orderooforeinstatementotooanoofficeowhichoisoessentiallyoofoao privateocharacteronorocanosuchoanoapplicationobeomaintainedo too secureo performanceo ofo obligationso owedo byo ao companyo towardsoitsoworkmenoorotooresolveoanyoprivateodispute.o(seeo SohanoLalov.oUnionoofoIndia)o1957oSCRo738.oInoReginaov.o Industrialo Courto &o Ors.o (1965)o 1o QBo 377o mandamuso waso refusedoagainstotheoIndustrialocourtothoughosetoupounderotheo IndustrialoCourtsoAct,o1919oonotheogroundothatotheoreferenceo foroarbitrationomadeotooitobyoaoministerowasonotooneounderotheo Actobutoaoprivateoreference.o"ThisoCourtohasoneveroexercisedoao generalo power"o saido Bruce,o J.,o ino R.o v.o Lewishamo Uniono

(1897)o1oQBo498"tooenforceotheoperformanceoofotheirostatutoryo dutiesobyopublicobodiesoonotheoapplicationoofoanybodyowhoo choosesotooapplyoforoaomandamus.oItohasoalwaysorequiredothato theo applicanto foro ao mandamuso shouldo haveo ao legalo ando ao specifico righto too enforceo theo performanceo ofo thoseo duties".o Therefore,otheoconditionoprecedentoforotheoissueoofomandamuso iso thato thereo iso ino oneo claimingo ito ao legalo righto too theo performanceoofoaolegalodutyobyooneoagainstowhomoitoisosought.o Anoorderoofomandamusois,oinoform,oaocommandodirectedotooao person,ocorporationooroanoinferiorotribunalorequiringohimooro themo too doo ao particularo thingo thereino specifiedo whicho appertainsotoohisoorotheiroofficeoandoisoinotheonatureoofoaopublico duty.o Ito is,o however,o noto necessaryo thato theo persono oro theo authorityoonowhomotheostatutoryodutyoisoimposedoneedobeoao publicoofficialooroanoofficialobody.oAomandamusocanoissue,oforo instance,otooanoofficialoofoaosocietyotoocompelohimotoocarryoouto theo termso ofo theo statuteo undero oro byo whicho theo societyo iso constitutedo oro governedo ando alsoo too companieso oro corporationso too carryo outo dutieso placedo ono themo byo theo statutesoauthorisingotheiroundertakings.oAomandamusowouldo alsoolieoagainstoaocompanyoconstitutedobyoaostatuteoforotheo CWP-7599-2020o(O&M).oo -43-o o 2023:PHHC:133251o o o

purposeso ofo fulfillingo publico responsibilities.o (cf.o Halsbury'so LawsoofoEngland,o(3rdoed.)oVol.o11,op.o52oandoonwards).oo o

7.o Theo companyo beingo ao non-statutoryo bodyo ando oneo incorporatedounderotheoCompaniesoActothereowasoneitheroao statutoryo noro ao publico dutyo imposedo ono ito byo ao statuteo ino respectoofowhichoenforcementocouldobeosoughtobyomeansoofoao mandamus,onorowasothereoinoitsoworkmenoanyocorrespondingo legalorightoforoenforcementoofoanyosuchostatutoryooropublico duty.oTheoHighoCourt,otherefore,owasorightoinoholdingothatonoo writopetitionoforoaomandamusooroanoorderoinotheonatureoofo mandamusocouldolieoagainstotheocompany."o (emphasisosupplied)o o o o RelianceowasoalsooplacedoonoaoDivisionoBenchojudgmentoofo thisoCourtoinotheomatteroofoM/soFerminaoDevelopersoPvt.oLtd.oandoanothero Vs.o Indiabullso Housingo Financeo Limited,o passedo ino CWP-1806-2023o decidedoono23.02.2023.oTheorelevantoextractoofotheosameoreadsothus:-o "3.oInodeferenceotootheodirectionsoissuedobyotheoApexoCourtoweo haveocalledouponocounseloforotheopetitionersoasoalsooforotheo respondent/caveatoro too advanceo submissionso aso regardso maintainabilityo ofo theo instanto petitiono againsto theo privateo entity/respondento aso alsoo ono theo aspecto whethero ao petitiono undero Articleo 226o ofo theo Constitutiono ofo Indiao oughto too beo entertainedowhenoanoalternateoremedyounderoSectiono17oofotheo 2002o Acto iso availableo keepingo ino viewo theo decisiono ofo theo Supremeo Courto ino Phoenixo ARCo Privateo Limitedo versuso VishwaoBharatioVidyaoMandiro(2022)o5oSCCo645.oo o

4.ooLearnedoSeniorocounseloforotheopetitionersosubmitothatotheo respondento iso ao Non-bankingo Financialo Institutiono (NBFC)o underotheo Reserveo Bankoofo Indiao Act,o 1934o andoasosucho iso CWP-7599-2020o(O&M).oo -44-o o 2023:PHHC:133251o o o

empoweredotoolendomoneyotootheopublicoasoperoprovisionsoofo theo RBIo Act.o Furthero theo respondento haso obtainedo ao registrationo undero Sectiono 45-1Ao ofo theo RBIo Acto whicho obligatesotheorespondentotooworkoandomanageoitsobusinessoino publicointerest.oFurtherosubmittedothatotheorespondentoisoano institutiono registeredo undero theo provisionso ofo theo Nationalo HousingoBankoAct,o1987.oByovirtueoofosuchoregistrationoundero Sectiono29-A,otheorespondentoisopre-supposedotooproceedoando operateo ino publico interest.o Ino termso ofo Sectiono 21o ofo theo Bankingo Regulationo Acto 1949,o theo respondento musto alsoo complyo witho theo policies/directionso issuedo byo theo RBIo fromo timeo too timeo ino publico interest.o Furthero contendedo thato respondentoisoempoweredotoograntoloanoforotheopurposesoofo housing,obyovirtueoofotheoMasteroCircularoonohousingofinanceo datedo01.04.2022oissuedobyotheoReserveoBankoofoIndia.oItoiso emphasizedo thato theo respondento aso sucho beingo ao financialo institutiono carrieso outo publico functions.o Preciseo argumento raisedoisothatotheoloanoagreementobetweenotheoparties,oeveno thougho ino theo realmo ofo ao privateo contract,o haso ao statutoryo backingoofoRBIoguidelinesoandoMasteroCircularsoandoasosucho theorespondentowouldobeoamenableotootheowritojurisdictionoofo thiso Court.o Ato thiso stageo referenceo haso beeno madeo too IndiabullsoHousingoFinanceoLimitedoVs.oUnionoofoIndiaoando otherso 2023o SCCo OnLineo BOMo 180o too asserto thato theo respondento hereino itselfo hado filedo ao caseo againsto Yeso Banko claimingo sucho privateo banko too beo amenableo too theo writo jurisdictiono undero Articleo 226o ofo theo Constitutiono ofo India.o Relianceo haso alsoo beeno placedo upono theo judgmento ino St.o Marry'so Educationo Societyo &o Anr.o V.o Rajendrao Prasado Bhargavao&oors.o2022oSCCoOnLineoSCo1091otooassertothatoao writowouldobeomaintainableoagainstotheoprivateoinstitutionoifoito dischargesoaopublicofunction.oo o CWP-7599-2020o(O&M).oo -45-o o 2023:PHHC:133251o o o

6.o Learnedo Senioro counselo foro theo petitionerso haveo vehementlyocontendedothatotheojudgmentoofotheoApexoCourtoino PhoenixoARCo(supra)oisodistinguishableoonofactsoandoasosucho wouldohaveonooapplicability.oItoisoarguedothatotheomainoissueoino PhoenixoARCo(supra)owasonotowhetheroaoprivateopartyowaso amenableo too theo writo jurisdictiono ofo theo Higho Court.o Ito iso assertedothatoonlyoaopassingoreferenceohadobeenomadeothatotheo appellanto thereino waso ao privateo institutiono i.e.o ano Asseto ReconstructionoCompanyoandoasosuchowasonotoamenableotootheo writo jurisdictiono ando theo Apexo Courto dido noto takeo intoo considerationo theo judgmentso whicho layo downo thato ao writo petitiono iso maintainableo againsto ao privateo partyo ifo theo monstrosityo ofo theo situationo oro othero exceptionalo circumstanceso requireo timelyo judicialo interventiono too avoido graveoinjustice.oItohasobeenostressedothatoasoperotheofactualo premiseo ino Phoenixo ARCo (supra)o theo borrowero thereino hado defaultedoonoanooutstandingoamountoofoINRo117ocroresoando hado noto madeo anyo paymentso too theo securedo creditoro ando despiteo thato theo Higho Courto hado stayedo theo SARFAESIo proceedingsoonotheoconditionothatotheoborroweroshouldodeposito rupeesooneocrore.oInocompleteocontrast,otheoimpugnedorecallo noticeso ino theo presento caseo haveo beeno issuedo ono ao mereo technicalogroundothatointerestohadonotobeenodepositedoonoao monthlyobasis.oLearnedoSeniorocounselowouldoassertothatoino theo presento caseo thereo wouldo beo noo disputeo aso regardso theo respondentohavingo receivedo paymentso includingointerestobuto theo onlyo objectiono iso too theo mannero ino whicho sucho interesto paymentso hado beeno made.o Ito iso arguedo thato undero sucho peculiarocircumstancesoandowhereinotheodefault,oifoany,owaso minisculeoasoopposedotootheoglaringofactsoasoalsootheonatureoofo defaultoinoPhoenixoARCo(supra),othisoCourtooughtotooentertaino theopresentowritopetition.oLearnedoSeniorocounselohasofurthero contendedo thato theo judgmento ino Phoenixo ARCo (supra),o waso RAJ KUMAR ARORA deliveredo ono theo assumptiono thato theo actiono takeno byo theo CWP-7599-2020o(O&M).oo -46-o o 2023:PHHC:133251o o o

securedocreditorothereinowasounderoSectiono13o(4)oofotheo2002o Acto ando aso sucho ano alternateo remedyo waso availableo undero Sectiono 17o ofo 2002o Acto thereof.o Ito iso submittedo thato ino theo presentocaseoaonoticeohasobeenoissuedounderoSectiono13(2)oofo theo2002oActoandonooactionohasotillodateobeenotakenoundero Sectiono13o(4)oandoasosuchothereoisonooalternateoefficaciouso remedyoavailableotootheopetitionerobutotooapproachothisoCourto byo wayo ofo filingo ao writo petitiono undero Articleo 226o ofo theo ConstitutionoofoIndia.oRelianceohasoalsoobeenoplacedouponoao DivisionoBenchoofothisoCourtoinoAmrikoSinghoVs.oDCBoBanko Limitedoandoanothero(2022)o2oRCRo(Civil)o791otooassertothato ao privateo banko iso amenableo too theo writo jurisdictiono ando furthermoreo theo pleao ofo alternateo remedyo availableo undero Sectiono17oofotheo2002oAct,owouldonotobeoavailableoatotheostageo ofoissuanceoofoaonoticeounderoSectiono13o(2).oItohasoalsoobeeno arguedothatotheoDivisionoBenchoinoAmrikoSingh'socaseo(supra),o hadotakenoaoviewothatotheojudgmentoinoPhoenixoARCo(supra),o wasonotoapplicableoasoinothatocaseoanoAssetoReconstructiono Companyowasoinvolvedoasoopposedotooaoprivateobankoandoaso suchoaodistinctionobetweenotheotwoohadobeenodrawn.oParityoino theosameotermsoisosoughtoevenoinotheopresentocaseobyotakingoao pleao thato theo respondento iso ao Non-bankingo Financialo InstitutionoasoopposedotooanoAssetoReconstructionoCompany.oo o

7.o Pero contrao learnedo Senioro counselo representingo theo respondento wouldo contendo thato Indiabullso Housingo Financeo Limitedodoesonotodischargeofunctionsoofotheostateoandobeingoao privateoentityoisonotoamenableotootheowritojurisdictionoofothiso Court.o Theo mereo facto thato ao privateo entityo carryingo outo commercialoactivitiesoisogovernedobyoaoregulationooroaostatuteo wouldo noto tantamounto too sucho entityo dischargingo publico functionooro publicoduty.o Heavyorelianceoisoplacedo upono theo judgmento ino Phoenixo ARCo (supra),o too contendo thato ao writo RAJ KUMAR ARORA petitiono againsto ao privateo financialo institution/ARCo undero CWP-7599-2020o(O&M).oo -47-o o 2023:PHHC:133251o o o

Articleo 226o ofo theo Constitutiono ofo Indiao againsto proposedo action/actionsounderoSectiono13oofotheo2002oActowouldonotobeo maintainable.o Relianceo iso alsoo placedo upono theo Hon'bleo SupremeoCourtojudgmentoinoFederaloBankoVs.oSagaroThomaso andootherso(2003)o10oSCCo733owhereinoitohadobeenoheldothato writopetitionowouldonotobeomaintainableoagainstotheoprivateo entitieso unlesso thereo iso ao violationo ofo ao statutoryo duty/obligation.oo

8.ooApartofromotheoissueoofomaintainabilityoofotheowritopetitiono againstoaoprivateoentity,oitohasobeenoarguedothatotheoinstanto petitionomustoalsoofailoonotheogroundothatoanoalternateoremedyo isoavailableounderoSectiono13o(3-oA)oofotheo2002oActoagainsto noticeoissuedounderoSectiono13o(2)oofotheo2002oAct.oInothiso regardoitoisosubmittedothatoagainstotheonoticeounderoSectiono 13(2)o ofo theo 2002o Act,o ao representation/objectionso mayo beo filedounderoSectiono13o(3-A)oandowhichotheolender/creditoroiso boundotooconsideroinoaotimeoboundomannerobeforeoproceedingo further.oItoisoarguedothatotoopermitotheopetitionerotoofileotheo instantopetitionoagainstoaonoticeoissuedounderoSectiono13o(2)oofo theoActobyowayoofoaowritopetitionowouldoamountotoobye-passingo theo statutoryo provisions.o Ino supporto ofo sucho contentiono relianceohasobeenoplacedouponotheojudgmentoofotheoApexoCourto inoDevioIspatoLimitedoandoanotheroVs.oStateoBankoofoIndiao andootherso(2014)o5oSCCo762.oo o o o xxxo xxxo xxxo o

12.o Theo issueo thato fallso foro considerationo iso whethero theo respondent/Non-BankingoFinancialoInstitutionobyovirtueoofoitso statutoryoresponsibilitiesounderotheoprovisionsoofotheoReserveo BankoofoIndiaoActo1934,oNationaloHousingoBankoActo1987oando circularsoissuedobyoReserveoBankoofoIndiaowouldobeoseenotoobeo performingopublicofunctionsosooasotoobeoamenableotootheowrito jurisdictionoofothisoCourt?oo CWP-7599-2020o(O&M).oo -48-o o 2023:PHHC:133251o o o

13.oTheoissueoculledooutohereinaboveoisonoolongeroresointegra.o Ino theo caseo ofo Federalo Banko (supra)o theo Hon'bleo Supremeo Courtohadoconsideredowhetheroaoprivateobankothatoisoregulatedo byotheoBankingoRegulationoActo1949odischargesoanyopublico functionsoandohadoheldothus;-oo o "33....Inoouroview,oaoprivateocompanyocarryingoonobankingo businesso aso ao scheduledo bank,o cannoto beo termedo aso ano institutiono oro ao companyo carryingo ono anyo statutoryo oro publicoduty.oAoprivateobodyooroaopersonomayobeoamenableo toowritojurisdictionoonlyowhetheroitomayobecomeonecessaryo too compelo sucho bodyo oro associationo too enforceo anyo statutoryoobligationsoorosuchoobligationsoofopubliconatureo castingo positiveo obligationo upono it.o Weo don'to findo sucho conditionso areo fulfilledo ino respecto ofo ao privateo companyo carryingo ono ao commercialo activityo ofo banking.o Merelyo regulatoryoprovisionsotooensureosuchoactivityocarriedoonobyo privateobodiesoworkowithinoaodiscipline,odoonotoconferoanyo suchostatusouponotheocompanyonoroputoanyosuchoobligationo upono ito whicho mayo beo enforcedo througho issueo ofo ao writo underoArticleo226oofotheoConstitution.oo o

14.oEvenothoughotheojudgementoinoFederaloBank'socaseo(supra)o wasorenderedoinotheobackdropoofoaoservice/employmentodisputeo yetotheorationaleosetooutowouldobeoapplicableotootheopresento caseoasowell.oo o

15.o Ino St.o Mary'so caseo (supra)o theo viewo takeno ino Federalo Bank'so caseo (supra)o hado beeno reiteratedo ando ito hado beeno observedothatomerelyobecauseotheoStateoGovernmentohasotheo regulatoryopower,otheosame,obyoitself,owouldonotoconferoanyo suchostatusouponotheoinstitutiononoroputoanyosuchoobligationo uponoitowhichomayobeoenforcedothroughoissueoofoaowritoundero RAJ KUMAR ARORA Articleo226oofotheoConstitutionoofoIndia.oo CWP-7599-2020o(O&M).oo -49-o o 2023:PHHC:133251o o o

o o

16.oSimilaroviewowasotakenoinoPhoenixoARCo(supra)oandoitohado beenoobservedoasounder:-oo o

18.....oduringotheocourseoofoaocommercialotransactionoando undero theo contract,o theo Bank/ARCo lento theo moneyo too theo borrowerso hereino ando thereforeo theo saido activityo ofo theo Bank/ARCo cannoto beo saido too beo aso performingo ao publico functionowhichoisonormallyoexpectedotoobeoperformedobyotheo Stateoauthorities....."oo o

17.o Ino theo factso ofo theo presento caseo theo controversyo hingeso upono adherenceo ofo ao repaymento structure/OTSo lettero datedo

01.09.2021o (Annexureo P-2).o Theo sameo waso clearlyo ao settlementobasedoononegotiationobetweenoprivateopartiesoando merelyoforotheoreasonothatotheorespondentoNBFCoisogovernedo byocirculars/directivesoissuedobyotheoReserveoBankoofoIndiao wouldonototantamountotootheorepaymentostructure/OTSolettero datedo01.09.2021o(AnnexureoP-2)otoobeoplacedoatotheopedestalo ofoaostatutoryocontract.oTheoHon'bleoSupremeoCourtoinocaseoofo Indiao Thermalo Powero Limitedo ando ors.o Vs.o Stateo ofo M.P.o

(2011)o9oSCCo1ohadoobservedothatoifoenteringointooaocontracto containingo theo prescribedo termso ando conditionso iso ao musto undero theo statuteo theno theo contracto becomeso ao statutoryo contract.o However,o ino theo factso ofo theo presento caseo theo repaymentostructure/OTSoletterodatedo01.09.2021o(Annexureo P-2)o hado noto beeno issuedo ino furtheranceo ofo anyo statutoryo obligationo casto upono theo respondent/NBFC.o Theo repaymento structure/OTSo lettero datedo 01.09.2021o (Annexureo P-2)o waso onlyotowardsoaomutualounderstandingoandosettlementohavingo beenoarrivedoatobetweenoprivateopartiesoandoinofurtheranceoofo aocommercialoactivity.oo CWP-7599-2020o(O&M).oo -50-o o 2023:PHHC:133251o o o

18.oWeomayoobserveothatotheorespondent-NBFCoisoengagedoino ao commercialo activityo witho theo primaryo objectiveo too earno returnsoandoprofits.oWeotakeoitothatotheorespondentohasoitsoowno resourcesotooraiseoitsofunds.oItoisonototheocaseoprojectedoono behalfoofo theopetitioner(s)othato thereoisoanyo contributiono oro shareoholdingoatotheoinstanceoofotheoState.oo o

19.o oNBFCsoofotheolikeoofotheorespondentohaveonotobeenoseto upoforotheopurposesoofobuildingoeconomyoofotheoStateobutosucho companieso haveo beeno voluntarilyo establishedo foro theiro owno purposeso ando commercialo interest.o Beo thato aso ito may,o theo respondent/NBFCowouldohaveotooactoinoaomannerothatoitoisonoto inoconflictowithooroagainstotheofiscalopoliciesoofotheoStateoandoito isoforosuchopurpose,oguidelinesoandodirectivesoareoprovidedo underovariousoenactmentsoincludingotheoReserveoBankoofoIndiao Actotooensureothatoaoproperofiscalodisciplineoisomaintained.oTheo pleadingsoonorecordoareobereftoofoanyoavermentsotoosuggesto thatotheorespondent/NBFCoisocarryingooutoanyopublicofunction.oo o

20.o oInoviewoofotheodiscussionohereinaboveoandokeepingoino viewotheodictumolaidodownobyotheoSupremeoCourtoinoFederalo Banko(Supra),oSt.oMaryo(supra)oandoPhoenixoARCo(supra)oweo haveonoohesitationoinoconcludingothatotheorespondent-NBFCo wouldonotobeoamenableotootheowritojurisdictionoofothisoCourto undero Articleo 226o ofo Constitutiono ofo India.o Theo relianceo placedo byo theo petitionerso ono theo judgmento ino Indiabullso HousingoFinanceoLimitedo(supra)oisomisplaced.oTheochallengeo ino sucho caseo waso too ao communicationo datedo 14.03.2020o wherebyotheoAdministratoroofoYesoBankoLimited,oinformedotheo BombayoStockoExchangeo(BSE)oLimitedoandoNationaloStocko Exchangeo aso regardso theo decisiono ofo writingo off,o theo AdditionaloTiero1oDebentureoBonds.oAowritounderoArticleo226o ofo theo Constitutiono ofo Indiao waso heldo too beo maintainableo RAJ KUMAR ARORA againstotheoprivateobankoonotheobasisothatotheoimpugnedoactiono CWP-7599-2020o(O&M).oo -51-o o 2023:PHHC:133251o o o

runso contraryo too theo Informationo Memorandumo ino questiono whichowasoaostatutoryocontract.oTheofactsoofotheopresentocaseo areo clearlyo distinguishableo inasmucho aso theo repaymento structure/OTSoletterodatedo01.09.2021o(AnnexureoP-2)oasohaso beenodiscussedohereinaboveowasoinotheorealmoofoaopureoprivateo contractoandonotoinofurtheranceoofoanyostatutoryoobligation.oo o

21.oInsofaroasorelianceoplacedobyotheopetitionersoonoaoDivisiono BenchojudgmentoofothisoCourtoinoAmrikoSingh'socaseo(supra)o holdingotheoprivateobankoi.e.oDCBoBankoLimitedoamenableotoo theowritojurisdiction,oitowouldosufficeotooobserveothatoitoisotheo mandateoofotheoConstitutionoasoprovidedoinoArticleo141othato theolawodeclaredobyotheoSupremeoCourtoshallobeobindingoonoallo courtsowithinotheoterritoryoofoIndia.oItowouldonotobeoopenoforo theoHighoCourtotooquestionotheocorrectnessoofoaodecisionoofotheo Supremeo Courto eveno thougho theo pointo soughto too beo urgedo beforeo theo Higho Courto hado noto beeno consideredo byo theo SupremeoCourt.oAoreferenceoinothisoregardomayobeomadeotootheo judgmentoofotheoSupremeoCourtoinoSuganthioSureshoKumaro Vs.oJagdeeshano(2002)o2oSCCo240.oo o

22.oEvenootherwiseoweoareotakingoaoviewothatotheoinstantowrito petitionowouldonotobeomaintainableoinotheolightoofojudgmentoino PheonixoARCo(supra).oInosuchomatter,oVishwaoBharatioVidyao Mandiro aso alsoo St.o Ann'so Educationo Societyo hado availedo massiveo credito facilitieso fromo Saraswato Cooperativeo Banko Limited.oOnoaccountoofodefaultsocommittedobyotheoborrowers,o inotheo montho ofo Aprilo2013,o theo accountso ofo theo borrowerso wereoclassifiedoasoNon-performingoAsseto(NPA)obyotheobank.o Aso theo borrowerso failedo ando neglectedo too repayo theo outstandingoduesotootheobank,onoticeodatedo01.06.2013oundero Sectiono13o(2)oofotheo2002oActowasoissued.oInotheomonthoofo Marcho2014,otheoNPAoaccountoofotheoborrowersowithorespecto RAJ KUMAR ARORA tootheocreditofacilitiesoavailedobyothemowasoassignedobyotheo CWP-7599-2020o(O&M).oo -52-o o 2023:PHHC:133251o o o

Banko ino favouro ofo Pheonixo ARCo Pvt.o Ltd.o i.e.o ano Asseto Reconstructingo Company.o Pursuanto too theo assignment,o theo borrowersoapproachedotheoPheonixoARCowithoaorequestoforo restructuringotheorepaymentoofooutstandingodues.oAoletteroofo acceptanceo datedo 27.02.2015o waso executedo betweeno theo partieso wherebyo theo borrowerso acknowledgedo ando admittedo theoliabilityotoorepayotheoentireooutstandingodues.oSinceotheo borrowerso againo committedo defaultso ino paymento ofo theo outstandingo dues,o Pheonixo ARCo issuedo ao lettero datedo

13.08.2015o intimatingo theo borrowerso thato sinceo despiteo issuanceoofoSectiono13o(2)onoticeodatedo01.06.2013oandotheo subsequento executiono ofo theo lettero ofo acceptanceo datedo

27.02.2015,o theo borrowerso haveo failedo too repayo theo outstandingo dueso ando aso sucho Pheonixo ARCo wouldo beo proceedingo too takeo possessiono ofo theo mortgagedo propertieso aftero expiryo ofo 15o days.o Theo positiveo stando ono behalfo ofo Pheonixo ARCo beforeo theo Supremeo Courto waso thato theo communicationo datedo 13.08.2015o cannoto beo saido too beo ao noticeounderoSectiono13o(4)oofotheo2002oAct.oAsoperoPheonixo ARCoafterotheonoticeounderoSectiono13o(2)owasoissuedoinotheo yearo 2013o ando despiteo theo lettero ofo acceptanceo datedo

27.02.2015,osinceonoofurtheroamountowasopaid,oPheonixoARCo calledouponotheoborrowersotoomakeotheopaymentowithinotwoo weeksofailingowhichofurtheroproceedingsounderoSectiono13(4)o ofotheo2002oActowasoproposed.oInoaonutshellocategoricostandoofo Pheonixo ARCo waso thato theo 13.08.2015o communicationo waso onlyoaoproposedoactionoandoaowritopetitionofiledoagainstosucho proposedoactionowasonotomaintainable/entertainableoatoall.oo o

23.oInoPheonixoARCo(supra)otheoSupremeoCourtohasoheldoaso under:-oo o Ifo proceedingso areo initiatedo undero theo SARFAESIo Acto RAJ KUMAR ARORA and/oro anyo proposedo actiono iso too beo takeno ando theo CWP-7599-2020o(O&M).oo -53-o o 2023:PHHC:133251o o o

borroweroisoaggrievedobyoanyoofotheoactionsoofotheoprivateo bank/bank/ARC,oborrowerohasotooavailotheoremedyoundero theoSARFAESIoActoandonoowritopetitionowouldolieoand/oroiso maintainableoand/oroentertainable.oo o

24.oInoDevioIspatoLimitedo(supra),oaowritopetitionohadobeeno filedoagainstonoticeounderoSectiono13o(2)oissuedobyotheobanko demandingooutstandingoliabilitiesoandotheosameowasodismissedo byotheoSingleoJudgeoholdingothatoaostatutoryoremedyoofomakingo representationoagainstosuchonoticeoisoprovidedounderoSectiono 13o(3-A)oofotheo2002oAct.oDivisionoBenchoofotheoHighoCourto dismissedo theo appeal.o Mattero havingo beeno carriedo too theo Hon'bleoSupremeoCourtoitowasoheldothatotheoappellantohavingo availedo theo statutoryo remedyo ofo representationo aso sucho noo interferenceoisocalledoforoinotheoorderoofotheoHighoCourt.oo o

25.oAtothisostage,oitowouldobeoappositeotootakeonoteoofoaofactualo assertionothatowasomadeobyocounseloforotheorespondent/NBFCo thatoagainstotheorecallonoticesodatedo10.11.2022o(AnnexureoP-7)othatohadobeenoissuedotooallotheogroupocompanies,osomeoofo themohaveoalreadyofiledorepresentationounderoSectiono13o(3-A)o ofotheo2002oAct.oLearnedoSeniorocounseloforotheopetitionerso duringotheocourseoofohearingohaveoconcededotootheosame.oo o

26.oInotheolightoofosuchofactualopositionoandoinotheolightoofo dictumolaidodownoinoPheonixoARCo(supra)oasoalsooDevioIspat'so caseo (supra),o theo writo petitiono iso heldo too beo noto maintainable/entertainable.o (emphasisosupplied)o o o o RelianceowasoalsooplacedoonotheoDivisionoBenchojudgmentoofo thisoCourtoinotheomatteroofoM/soHarinderoFabricsoVs.oShriramoCityoUniono CWP-7599-2020o(O&M).oo -54-o o 2023:PHHC:133251o o o

FinanceoLtd,oobearingoCWPoNo.10738-2022,odecidedoono04.05.2023.oTheo relevantoextractoofotheosameoreadsothus:-o "10.o Ino SLPo (Civil)o Noso 22021-22022o ofo 2022o titledo M/so SouthoIndianBankoLtd.o&oothersoVs.oNaveenoMathewoPhilipo &o another,o decidedo ono 17.04.2023,o whileo takingo intoo considerationotheojurisdictionoexercisedobyotheoKeralaoHigho CourtoregardingoSectiono13(4)ochallenge,oitowasonoticedothato financialo transactionso wereo beingo entertainedo despiteo theo settledopropositionoofolawowhileotakingointooconsiderationotheo judgmentsopassedoinoFederaloBankoLtd.oVs.oSagaroThomas,o

(2003)o10oSCCo733oandoStateoBankoofoIndiaoVs.oArvindrao Electronicso(P)oLtd.,o2022oSCCOnlineoSCo1522oandoitowaso heldothatotheoTribunaloisoexpectedotoogoointootheoissuesoofofacto andolawoincludingothoseoofostatutoryoviolationoandoitohadoao wideorangeoofopowersotoosetoasideoalloillegaloordersoandogranto consequentialoreliefs,oincludingore-possessionoandopaymentoofo compensationoandocosts.oResultantly,otheoquestionoofolawowaso againoreiteratedobyoholdingoasounder:oo o "18.oWhileodoingoso,oweoareoconsciousoofotheofactothatotheo powersoconferredounderoArticleo226oofotheoConstitutionoofo Indiaoareoratherowideobutoareorequiredotoobeoexercisedoonlyo ino extraordinaryo circumstanceso ino matterso pertainingo too proceedingsoandoadjudicatoryoschemeoquaoaostatute,omoreo soo ino commercialo matterso involvingo ao lendero ando ao borrower,owhenotheolegislatureohasoprovidedoforoaospecifico mechanismoforoappropriateoredressal."oo o

11.o Ino sucho circumstances,o keepingo ino viewo theo settledo principleoofolaw,oonceosecuritizationoproceedingsohaveobeeno initiatedoafterotakingorecourseotooSectiono13(4),oweoareoofotheo consideredoopinionothatofirstlyotheoremedyowouldolieowithotheo Tribunal.oOnlyoinoexceptionalocasesothisoCourtowouldoexerciseo CWP-7599-2020o(O&M).oo -55-o o 2023:PHHC:133251o o o

itso jurisdiction.o Nothingo haso beeno showno too bringo theo caseo withinotheoambitoofothoseoexceptionalocircumstances,oonceoono foreclosureo ofo theo accounto theo outstandingo nowo iso Rs.1,05,22,171/-o xxxo xxxo xxxo o

13.oo Similarlyoanotheroaspectowouldohaveotoobeoconsideredo thatotheorespondent-financialoinstitutionoisoaoprivateoinstitutiono and,otherefore,otheoobservationsoofotheoApexoCourtoinoPhoenixo ARCo Privateo Limitedo Vs.o Vishwao Bharatio Vidyao Mandiro &o others,o2022o(5)oSCCo345owouldoalsoocomeointooplay,oaparto fromotheoobservationsomadeoinoM/soSouthoIndianoBankoLtd.o&o otherso (supra)o thato whereo theo financialo transactionso areo subjecto mattero ofo consideration,o theo Writo Courto wouldo noto exerciseo itso jurisdiction.o Ito iso alsoo too beo noticedo thato theo outstandingso againsto theo petitionero haveo nowo increasedo too Rs.1,05,22,171/-,oasoperotheoforeclosureomadeoono22.07.2022.oo o

14.oInoviewoofotheofactsoandocircumstancesoofotheopresentocaseo andotheoratiooofotheoaforesaidodecisions,otheopetitioneroisonoto entitledotooinvokeotheowritojurisdictionoforoseekingoaoreliefoofo issuanceo ofo theo directiono too theo respondento foro Oneo Timeo Settlementoespeciallyowhenoalternateoandoefficaciousoremedyoiso availableotootheopetitionerotoochallengeotheoproceedingsoundero Sectiono13(4)oofotheoAct."o (emphasisosupplied)o o oo Relianceo waso alsoo placedo ono theo judgmento ofo Hon'bleo AllahabadoCourtoinoCWPoNo.66283oofo2010odecidedoono06.12.2010otitledo aso 'Dharmendrao Kumaro Yadavo Vs.o Managero Commercialo Autoo Saleso (Pvt.)oLtd.oAllahabad'oreportedoaso2010o(44)oRCRo(Civil)o881.oRelevanto extractoofotheosameoreadsothus:-o CWP-7599-2020o(O&M).oo -56-o o 2023:PHHC:133251o o o

"6.oAsoobservedoabove,otheoonlyoallegationsomadeoinotheowrito petitionoareoagainstotheoCommercialoAutooSalesoPvtoLtd,owhicho isoaoprivateobodyoandoitsoagentowhoohadoonceorepossessedotheo vehicle.oAlthough,oanoapplicationoforoimpleadmentohasobeeno movedoforoimpleadingotheoStateoofoU.P.oandoD.I.G.oofoPolice,o butothereoareonooallegationsoofoanyokindomadeoagainstoanyo StateoAuthoritiesooroPoliceoauthoritiesosooasotooimpleadothemo ino thiso writo petition.o Noo caseo haso beeno madeo outo foro impleadingotheoStateoofoU.P.oandoD.I.G.oofoPolice,ohenceotheo Impleadmentoapplicationoisorejected.oo o o o xxxo xxxo xxxo

11.oThereocannotobeoanyodisputeotootheopropositionoasolaido downobyotheoApexoCourtoinotheoaboveocase.oTheoBankohasotoo resortotootheoprocedureorecognisedobyolawotootakeopossessiono ofo theo vehicle.o However,o ino caseo theo Banko commitso anyo violationo oro commitso ano offence,o ito iso alwayso openo foro ano aggrievedo persono too takeo sucho criminalo oro civilo actiono aso permissibleounderolaw.o o o o xxxo xxxo xxxo

13.oInoviewoofotheoforegoingodiscussions,oweoareoofotheoviewo thatonoogroundsohaveobeenomadeooutotooissueoanyomandamuso tooaopurelyoprivateobodyonamely;o1.e.oCommercialoAutooSaleso PvtoLtd.oinotheofactsoofotheopresentocase.oWe,ohowever,oobserveo thatoitoisoopenoforotheopetitionerotootakeosuchociviloorocriminalo actiono againsto theo privateo bodyo whicho mayo beo permissibleo underolaw."o (emphasisosupplied)o o o ReferenceowasoalsoomadeotootheoDivisionoBenchojudgmentoofo Hon'bleo Orissao Higho Courto ino theo mattero Anirudho Sahooo Vs.o Commissioner,o Stateo Transporto Authority,o Orissao ando otherso bearingo CWP-7599-2020o(O&M).oo -57-o o 2023:PHHC:133251o o o

W.P.o(C)oNo.8697oofo2009odecidedoono16.04.2010.oTheorelevantoextractoofo theosameoreadsothus:-o "4.o Admittedly,o Oppositeo Partyo No.o 3o representso ao privateo companyoincorporatedounderotheoCompaniesoActoengagedoino theo businesso ofo providingo finance.o Consequento upono ao bilateralo agreemento enteredo intoo betweeno theo Petitionero &o OppositeoPartyoNo.o3,oPetitioneroavailedoloanoforopurchasingo theotruck.oDisputeobetweenotheoPetitioneroandoOppositeoPartyo No.o 3o relateso too defaulto ino re-paymento ofo loano byo wayo ofo E.M.Is.o Noneo ofo theo prayerso madeo ino theo Writo Petitiono iso directedoagainstoanyostatutoryoauthority.oTheorivalocontentionso madeobyotheopartiesorelateotoocivilodisputeoconcerningobreacho ofocommercialocontract.oLearnedoCounseloforotheoPetitionero soughtotoorelyouponotheodecisionoinoManager,oICICIoBankoLtd.o v.oPrakashoKauro&oOrs,oAIRo2007oSCo1349otoourgeothatowrito applicationo iso maintainableo ino caseso ofo presento nature.o However,odecisionocitedobyoLearnedoCounseloforotheoPetitionero wasorenderedobyoHon'bleoSupremeoCourtoinoCriminaloAppealo No.o267oofo2007oarisingooutoofoorderopassedobyoAllahabado Higho Courto ino ao Criminalo Miscellaneouso Petitiono directingo SSP,o Allahabado too ensureo registrationo ofo F.I.R.o &o investigationoonotheobasisoofoapplicationosubmittedobyotheoWrito Petitioner.o Therefore,o theo decisiono iso ofo noo helpo too theo Petitioner.o o

5.oAsohasobeenolaidodownobyotheoHon'bleoSupremeoCourtoino FederaloBankoLtd.ov.oSagaroThomaso&oOrs.,oAIRo2003oSCo 4325oaoWritoPetitionounderoArticleo226oofotheoConstitutionoofo Indiaomayobeomaintainableoagainsto(i)otheoStateo(Govt.);o(ii)o Authority;o (ii)o ao statutoryo body;o (iv)o ano instrumentalityo oro agencyoofotheoState;o(v)oaocompanyowhichoisofinancedo&oownedo byotheoState;o(vi)oaoprivateobodyorunosubstantiallyoonoStateo funding;o (vii)o ao privateo bodyo dischargingo pubico dutyo oro CWP-7599-2020o(O&M).oo -58-o o 2023:PHHC:133251o o o

positiveoobligationoofopubliconature;o(viii)oaopersonooroaobodyo underoliabilityotoodischargeoanyofunctionounderoanyoStatute,otoo compelo ito too performo sucho ao statutoryo function.o Ao privateo companyocarryingoonobankingobusinessocannotobeotermedoaso anoinstitutionoorocompanyocarryingoonoanyostatutoryooropublico duty.oAoprivateobodyooroaopersonomayobeoamenableotoowrito jurisdictionoonlyowhereoitomayobecomeonecessaryotoocompelo suchobodyooroAssociationotooenforceoanyostatutoryoobligationso oro sucho obligationso ofo publico natureo castingo positiveo obligationouponoit.oSuchoconditionsoareonotofulfilledoinorespecto ofoaoprivateocompanyocarryingoonoaocommercialoactivityoofo banking.oMerelyoregulatoryoprovisionsotooensureosuchoactivityo carriedoonobyoprivateobodiesoworkowithinoaodisciplineoalsoodoo notoconferoanyosuchostatusouponotheocompanyonoroputsoanyo suchoobligationouponoitowhichomayobeoenforcedothroughoissueo ofoaowritounderoArticleo226oofotheoConstitution.oInoPradeepo Kumaro Biswaso v.o Indiano Instituteo ofo Chemicalo Biologyo &o Ors.,o (2002)o 5o SCCo 111,o ito haso beeno pointedo outo thato theo questionoinoeachocaseowouldobeowhetheroinotheolightoofotheo cumulativeo factso aso established,o theo bodyo iso financially,o functionallyo &o administrativelyo dominatedo byo oro undero theo controloofotheoGovernment.oSuchocontrolomustobeoparticularotoo theobodyoinoquestiono&omustobeopervasive.oIfothisoisofoundotheno theobodyoisoaoStateowithinotheomeaningoofoArticleo12.oOnotheo othero hand,o wheno theo controlo iso merelyo regulatoryo whethero undero statuteooro otherwise,oito wouldo noto serveo too makeotheo bodyoaoState.o o

6.oTheosubjectomatteroofotheopresentoWritoPetitionorelatesotoo loano takeno byo theo Petitionero fromo ao privateo company.o Theo remedyoforotheoPetitioneroforobreach,oifoany,oofoagreementobyo Oppositeo Partyo No.o 3o haso too beo availedo byo resortingo too appropriateo proceedingo foro resolutiono ofo civilo dispute.o Theo RAJ KUMAR ARORA Petitionerohavingonotomadeoanyogrievanceoagainstoanyoofotheo CWP-7599-2020o(O&M).oo -59-o o 2023:PHHC:133251o o o

authoritiesounderotheoStateooroclaimedoreliefofromotheoState,o theowritoapplicationoisonotomaintainable."o (emphasisosupplied)o o oo Counselo foro theo respondent-Financeo companieso haso arguedo thato theo petitionerso ino theseo caseso areo largelyo ino defaulto ino payingo theo installments.oInovariousocases,oarbitrationoproceedingsohaveoalreadyobeeno invokedoandoawardohasobeenopassedoinofavouroofoFinanceoCompany.oThereo iso ano arbitration/ADRo clauseo ino allo thoseo Commercialo Contracts.o Notwithstandingothatonon-paymentoofoinstallmentoisoaonoticeoinoitself,oyet,o theo Financeo Companyo haso followedo dueo procedure-contractuallyo agreedo uponobetweenotheoparties.oVagueoandogeneraloallegationsohaveobeenoleveledo inotheseopetitionsobyoreferringotootheoRBIoguidelines,obutobreachoofoanyo specificoclauseoisoneitheropleadedonoroestablished.oBesides,oifothereoisoanyo allegationoofobreach,othereoareonumerousoalternativeoremediesoavailableonoto onlyoasoperotheoagreement-oi.e.oArbitration,obutoalsoounderotheoConsumero Protectiono Act,o 1986,o Legalo Serviceso Authoritieso Act,o 1987o ando eveno beforeotheoCiviloasowelloasoCriminaloCourts.oNooreasonsohaveobeenogivenoaso toowhyotheosaidoremediesoareonotoefficaciousoorobeonotoresortedoto.oTheo petitionersohaveoalsoofailedotooestablishoanyopublicodutyooropublicofunctiono beingodischargedobyothem.oBeingoNBFC/Pvt.oBanks.oTheoGovernmentodoeso notoexerciseoanyoManagerial;oAdministrativeoorofinancialocontract.oBeingo licensedo byo theo RBI,o theo guidelineso issuedo foro mentioningo financialo disciplineoinoeconomyocannotobeocontinuedoforoexercisingomanagerialooro administrativeocontract.oBeingoaoprivateoentity;oPubicolaworemediesocannoto CWP-7599-2020o(O&M).oo -60-o o 2023:PHHC:133251o o o

oo Itoisofurtherosubmittedothatotheopetitionersohaveochosenonototoo makeo completeo disclosureso ino variouso petitionso witho respecto too theo arbitrationoproceedings.oTheoonlyodefenceoraisedoisothatotheoarbitrationowaso beingoheldoatoaoplaceoofoconvenienceoofotheocompanyoandothatoitowasonoto feasibleoforotheopetitionersotooparticipateoinotheosameoandotoodefendotheiro bestointerests.ooTheosameocannotobeoacceptedoasoaovalidoresponse.oHavingo agreedotooaoremedyoasowelloasotheoseatoofoArbitration,oitocannotobeopermittedo tooresileoforosuchoclausesoandoconditions,owhichotheopetitionersowereoundero anoobligationotooaccept.oo o oo Theoshortoillustrativeosynopsisoinoaotabulatedoformoasoregardso theo proceedingso beforeo vehicleso wereo re-possessedo oro soughto too beo re-possessed:-o o S.No Writo Loano Pendingo Vehicleo Vehicleo Additionalo .o Petitiono Amounto Dueo Recoveryo Releaseooro Remarkso no.o Paymento (Dateo&o Noto atotheo Place)o timeoofo Re-possessiono 1o CWPo Rs.o Rs.o 13.11.2021o Vehicleo Pre-saleo No.o4874o 10,13,300o 5,18,594.2 ato Malhnio soldo foro noticeo waso ofo2022o 4o Supaul,o Rs.o issuedo ono Biharo 3,36,300o 01.12.2021o &o

02.12.2021o 2o CWPo Notogivenoino Rs.o Dateo noto Cannoto beo Pre-saleo No.o theopetitiono 9,07,930o giveno –o determinedo noticeo waso 33031o ofo Ajmero issuedo ono 2019o Sharifo -o 03.09.2019o Rajasthano 3o CWPo Rs.o Rs.o73,569o 07.07.2019o Cannoto beo Pre-saleo No.o 7,50,000o atoAmbalao determinedo noticeo waso 24931o ofo issuedo ono 2019o 09.07.2019o 4o CWPo Rs.o Rs.o 21.01.2020o Vehicleo Video ordero No.o2949o 13,54,497o 3,06,108o ato noto datedo ofo2020o Jalandharo released.o 30.09.2019o Ld.o ADSJ,o Mohalio appointedo CWP-7599-2020o(O&M).oo -61-o o 2023:PHHC:133251o o o

recovero theo vehicle.o 5o CWPo Rs.o Rs.o74,000o 07.12.2019oo Cannoto beo Noneo No.o2989o 22,00,000o -o Placeo noto determined ofo2020o giveno .o 6o CWPo Rs.o Rs.o 12.02.2020o Trucko ino Arbitrationo No.o6849o 33,53,017o 2,65,676o ato possessiono awardodatedo ofo 2020o Pathankoto ofo Policeo 24.02.2020o alongwit Officialso againsto theo ho petitionero Contemp passedo ato toPetitiono Chennai.o No.o1116o ofo2020o 7o CWPo Rs.o Rs.o1,114o 23.12.2019o Vehicleo Appointmen No.o 538o 32,00,000o -o Placeo noto noto tooforeceivero ofo 2020o giveno released.o video ordero alongwit datedo ho 12.10.2018o Contemp againsto theo toPetitiono petitionero No.o1114o passedo ato ofo2020o Jalandhar.o 8o CWPo Rs.o Rs.o 09.12.2020o Vehicleo Appointmen No.o 29,66,900o 1,19,026.8 -o Placeo noto noto tooforeceivero 22613o ofo 0o giveno released.o video ordero 2020o datedo

07.01.2021o againsto theo petitionero passedo ato Ludhiana.o 9o CWPo Rs.o Rs.o 10.10.2016o Vehicleo Noneo No.o6214o 22,16,725o 1,71,000o ato Samana,o alreadyo ofo2017o Patialao sold.o 10o CWPo Rs.o Rs.o 31.08.2019o Cannoto beo Noneo No.o 41,68,088o 3,90,984o ato Mogao –o determined 37495o ofo Faridkoto .o 2019o Road.o 11o CWPo Rs.o Rs.o 29.12.2019o Cannoto beo Noneo No.o1671o 41,52,421o 3,19,416o ato Riwao determined ofo2020o Road,o .o Mirzapuro 12o CWPo No.o Rs.o Rs.o 30.11.2020o Vehicleo Pre-saleo 396o ofo 31,15,900o 26,07,656o ato Siliguri,o soldoforoRs.o noticeo waso 2021o Westo 14,50,000o issuedo ono Bengalo 08.12.2020o 13o CWPo No.o Rs.o NAo NA NA NA 3590o ofo 29,10,079.83o 2021o 14o CWPo No.o Rs.o Rs.o 01.10.2020o Vehicleo noto Arbitrationo 17282o ofo 25,54,126o 1,36,229o atoSahnewal,o released.o awardo datedo 2020o Ludhianao 28.10.2022o againsto theo petitionero passedo ato Chennai.o 15o CWPo Rs.o Rs.o 25.04.2021o Vehicleo Pre-saleo No.o 18,57,145o 1,68,837o ato Kaithal,o soldo foro noticeo waso CWP-7599-2020o(O&M).oo -62-o o 2023:PHHC:133251o o o

24842o ofo Haryanao Rs.o issuedo ono 2021o 13,10,000o 30.04.2021o 16o CWPo Rs.o Rs.o Cannoto beo Cannoto beo Loano No.o 30,83,830o 4,83,490o determinedo determinedo Overdueo 24285o ofo Noticeo waso 2022o issuedo ono

10.02.2022o 17o CWPo Rs.o Rs.o 13.11.2021o Vehicleo Pre-saleo No.o4874o 10,13,300o 5,18,594.2 ato Malhnio soldo foro noticeo waso ofo2022o 4o Supaul,o Rs.o issuedo ono Biharo 3,36,300o 01.12.2021o &o

02.12.2021o 18o CWPo Rs.o Cannoto beo 04.03.2022o Cannoto beo Noneo No.o5205o 17,26,443.6 determinedo ato Greatero determinedo ofo2022o 8o Noida,oUP.o 19o CWPo Rs.o Rs.o 06.09.2017o Vehicleo Pre-saleo No.o9352o 26,10,612o 3,15,000oo ato alreadyo noticeo waso ofo2022o Nunkarano sold.o issuedo ono Sahibo nearo 13.09.2017o Bikanero 20o CWPo Rs.o Cannoto beo 13.06.2022o Cannoto beo Noneo No.o 22,02,500o determinedo ato determinedo 14934o ofo Sharanpur,o 2022o UP.o 21o CWPo Rs.9,50,000o Rs.o65,380o 13.10.2022o Vehicleo Pre-saleo No.o –oPlaceonoto alreadyo noticeo waso 25537o ofo giveno soldo foro issuedo ono 2022o Rs.o 19.09.2022o 6,00,000o 22o CWPo Rs.o Rs.o 06.04.2023o Vehicleo Noneo No.o9146o 33,00,000o 17,00,000o ato Bokaro,o noto ofo2023o Jharkhando releasedo 23o CWPo Rs.o Cannoto beo 4-5.4.2023o Vehicleo Noneo No.o 35,10,525o determinedo ato Ranka,o noto 11170o ofo Jharkhando releasedo 2023o 24o CWPo Rs.o Rs.o 26.05.2023o Vehicleo Arbitrationo No.o 4,80,000o 1,67,882o ato Sectoro noto awardodatedo 13102o ofo 29-B,o releasedo 06.05.2023o 2023o Chandigarh againsto theo .o petitionero passedo ato Delhi.o 25o CWPo No.o Rs.o Rs.o74,285o 29.05.2023o Vehicleo noto Noneo 13102o ofo 21,14,800o ato Hisar,o releasedo 2023o Haryanao 26o CWPo No.o Rs.o Rs.o 22.05.2023o Vehicleo noto Pre-saleo 13356o ofo 36,66,006o 2,40,000o ato Salasar,o releasedo noticeo waso 2023o Rajasthano issuedo ono

24.05.2023o 27o CWPo Rs.o Rs.o 12.11.2021o Vehicleo Noneo No.o4465o 28,56,017o 7,86,017o –oPlaceonoto noto ofo2022o mentioned.o releasedo 28o CWPo Rs.o Cannoto beo 29.12.2019o Vehicleo Noneo No.o1671o 41,52,421o determinedo ato noto ofo2020o Mirzapur,o releasedo CWP-7599-2020o(O&M).oo -63-o o 2023:PHHC:133251o o o

oooo o o Theo aboveo saido instanceso areo onlyo illustrativeo ando noto exhaustive.oSomeoofotheowritopetitionsohaveobeenofiledoonotheopresumptiono thatoaoforcibleopossessionoofotheovehicleoshallobeotaken.oooo o o Learnedocounseloforotheofinancialoinstitutionsocontendsothatoino largeonumberoofocases,otheostandoofotheopetitionersoisosameothatonoolegalo noticesowereosentotootheoborrowersoinodefaultowithotheopreoandopostore-possessiono informationo too theo borrowero oro too theo policeo abouto theo repossessionoofotheovehicle,owhichoisoincorrect.oInofact,otheopre-saleonoticeso wereosentotootheodefaultersobeforeoconfirmingotheosaleoandothatothereowasonoo complaintoregardingotheopeacefulore-possession.oTheopetitionersohaveoalsoo nowhereoestablishedothatoanyobetterobidderowasoavailable.oNooofferohasoalsoo beeno madeo too settleo theo dispute.o Theo filingo ofo theo writo petitiono iso thuso mischievouso ando noto intendedo foro anyo bona-fideo considerations.o Theo institutionoofotheowritopetitionopostosaleoofotheovehicleoisofiledoonlyoaomeanso ofoharassment.o CONSIDERATIONo o o Iohaveoheardotheolearnedocounseloforotheorespectiveopartiesoando haveoalsoogoneothroughotheodocumentsoavailableoonorecordoasowelloasotheo judgments/judicialoprecedentsoreliedouponobyothemoinotheirofavour.o o oo Aolargeonumberoofocasesoareobeingorepeatedlyofiledobeforeothiso Courtowhereotheoborrowersoareoseekingoaopre-emptoryoinjunctionoagainsto NBFC/Pvt.oBanksothatore-possessionoofovehiclesobeonotomadeoexceptoasopero lawoandomoreosoowhenoforcibleore-possessionohasobeenooftenoreprimandedo byoCourts.oReferenceoisomadeotoocertainoregulatoryocircularsoofoRBIotooposeo CWP-7599-2020o(O&M).oo -64-o o 2023:PHHC:133251o o o

aso ifo theo sameo wouldo changeo theo natureo ofo relationshipo ando rendero theo NBFC's/Pvt.oBanksoamenableotoowritojurisdictionsoofotheoHighoCourt.oVeryo oftenosuchopetitionsohaveobeenoentertainedoinopeculiarocircumstancesoando eveno order(s)o wereo passed.o Ino someo cases,o theo respondentso gaveo undertakingso wheno theseo orderso wereo passed,o buto noto challengedo ono commercialowisdomoorootherwise.oTheoquestionoasoregardsoamenabilityoofo NBFC/Pvt.oBanksotoowritojurisdictionoinosuchocommercialoagreementsowaso eitheronotoconsideredoorodecidedoorowasokeptoopen.oEntertainmentoofosucho petitionso openedo gateso foro allo petitionso too beo filedo here,o mistakingo ao sympatheticoindulgenceoasodeterminationoofolaw.oTheoissueoofojurisdictiono gotoblurredoasopetitionsoraisedoissuesoaboutoincidentsothatohaveotakenoplaceo outsideotheoterritorialojurisdictionoofothisoCourtobyoplacingorelianceoonotheo documentodefiningorelationshipoasoao"causeoofoaction"o o o Consideringothatoaolargeonumberoofocasesowhereorecoveryoofo vehiclesohasobeenodone,ofallooutsideotheoterritorialojurisdictionoofothisoHigho CourtoandotheopetitionersohaveoapproachedothisoCourtoclaimingothatotheyoareo ordinarilyo resident(s)o ofo theo Stateo ando thato theo amounto waso financedooro agreementowasoexecutedowithinotheoterritorialojurisdictionoofothisoCourt,o conferringojurisdiction,oitohasobecomeoessentialotoofirstoexamineoasotoowhato wouldoconstituteoaocauseoofoaction.oo oo o Ino itso legalo understanding,o 'theo causeo ofo action'o implieso 'ao rightotoosue.'oHence,otheomaterialofactsowhichoareoimperativeoforotheoosuitoro whooallegesoandoprovesohisorightotoosueoandoclaimoreliefoconstitutesoaocauseo ofoaction.oTheofactsothatoareoancillaryoorosupportiveoandohaveonoodirecto nexusotootheoreliefoprayedoforocannotobeosaidotoogiveoriseotooaocauseoofoactiono CWP-7599-2020o(O&M).oo -65-o o 2023:PHHC:133251o o o

conferringojurisdictionoonotheoCourt.oSinceocauseoofoactionoisorelevantoando germaneosinceoaowritopetitionocanoonlyobeoinstitutedobeforeoaoHighoCourto withino theo territorialo jurisdictiono ofo which,o theo causeo ofo actiono arose,o whollyooroinopartohence,otheojurisdictionoofotheoHighoCourtohasotoobeoseeno fromotheoaccrualoofocauseoofoaction.oo oo o ItowasoheldobyotheoHon'bleoSupremeoCourtoinotheomatteroofo EasternoCoaloFieldsoLimitedoVs.oKalyan,oreportedoaso2008o(3)oSCCo456,o thatoaocauseoofoactionoforotheopurposesoofoArticleo226o(2)oofotheoConstitutiono ofoIndia,oforoallointentoandopurport,omustobeoassignedotheosameomeaningoaso envisagedounderoSectiono20o(c)oofotheoCodeoofoCiviloProcedure,o1908.oItoiso largelyoaobundleoofofactsorequiredotoobeoprovedoandonototheobundleoofofactso requiredotoobeopleaded.oSuchofactsowhichoareorequiredotoobeopleadedoneedo notonecessarilyoconstituteoaocauseoofoactionowhereuponoaowritopetitionomayo beoallowed.oo oo Onotheoaforesaidolegaloprinciples,oitoneedsotoobeotestedoasotoo whethero theocauseo ofo actiono againsto repossessiono accruedo asoao resulto ofo enteringointooanoagreementooroonoaccountoofore-possessionoofotheovehicle.o Theosaidofactoofoenteringointooanoagreement,oevenothoughoisonecessaryoforo pleadingsoandounderstandingotheonatureooforelationshipoamongstotheoparties,o however,otheosameomayonotoconstituteoasoaocauseoofoactionotillosuchotimeotheo agreementooroitsotermsoareoitselfounderochallenge.oInoitsorestrictiveosenseo causeoofoactionomeansotheocircumstancesoformingotheoinfractionoofotheorighto orotheoimmediateooccasionoforotheoactionowhileoinoaowiderosense,oitomayo includeoallonecessaryoconditionsoforotheomaintenanceoofosuitoincludingonoto onlyotheoinfractionooforight,obutotheoinfractionocoupledowithotheorightoitself.o CWP-7599-2020o(O&M).oo -66-o o 2023:PHHC:133251o o o

Everyofactowhichoisorequiredotoobeoproved,oasodistinguishedofromoeveryo pieceoofoevidenceowhichoisonecessaryotooproveoeachofactocompromisesoao causeoofoaction,oasoheldobyotheoHon'bleoSupremeoCourtoinotheomatteroofo RajasthanoAdvocatesoAssociationoVs.oUnionoofoIndia,oreportedoaso2001o

(2)oSCCo294.oo oo Inomattersorelatingotooforcibleorepossessionoofoaovehicle,otheo factowhichoisorequiredotoobeoestablishedooasogivingoriseotooaocauseoofoactiono isoasotoowhetheroaovehicleohadobeenoforciblyorepossessedoinoviolationoofotheo ruleo ofo lawo oro not.o Ano executiono ofo theo loano agreemento aso wello aso disbursementoofoloanowouldoprimarilyoonlyobeoaopieceoofoevidenceorequiredo tooestablishotheolegalorelationshipoamongstotheopartiesoquaowhomoaofactoino issueo iso requiredo too beo determined.o Hence,o ao mereo executiono ofo ano agreemento withino theo territorialo jurisdictiono and/oro ao claimanto residingo withinotheoterritorialojurisdictionomayonotobeosufficientotoovestoterritorialo jurisdictionoinoaoHighoCourtowhereoaolisoisobrought.oSuchoaspectothusoneedso toobeodeterminedoonofactsoofoeachocase,otheoreliefoclaimedoandowhatoaspecto directlyo decidedo too leadingo theo institutiono accruedo ino itso jurisdiction.o Requirementotooestablishoterritorialojurisdictionoisonotoaomereoformalityoando isoratheroaocriticaloandocrucialotaskoofoadministrationoofojusticeoandoputsoano effectiveocheckoonoforumohunting.oHowever,oinolargeonumberoofosuchocases,o respondentoFinanceoCompaniesohaveoservedotheopre-repossessiononotices,o pre/postoloanorecallonotices/saleonoticesoetc.oIssuanceoofosuchonoticesoando theiro dueo serviceo beforeo repossession/saleo ofo theo vehicleo recoveredo too personowhooareoresidingowithinotheoterritorialojurisdictionomayohaveosomeo semblanceotoogivingoriseotooaocauseoofoaction.ooSinceosuchoissuesoareotoobeo CWP-7599-2020o(O&M).oo -67-o o 2023:PHHC:133251o o o

determinedo ono ao caseo too caseo basiso ando theo presento petitionso areo beingo decidedoasoaobatchoinsteadoofomicrooexaminationoofotheofactsoofotheoeacho case,ohence,othisoCourtodeemsoitoappropriateotoorelaxotheotestoofocauseoofo actionoforoadjudicationoandomaintainingoofotheopresentowritopetitions.oo o o Inotheosaidobackground,otheoquestionowhichocomesouponextoiso asotoowhetherotheowritopetitionowouldobeomaintainableoagainstoaoPrivateo Bank/Non-BankingoFinanceoCompanyooronoto?oo o TheodisputeobroughtobeforeothisoCourtoinotheopresentobatchoofo writopetitionsoareobeingoportrayedoasoaopublicolawogrievanceonecessitatingo framingoofoguidelinesoforolargeropublicobenefit,ohowever,oitoisonotoinodisputeo thato theo aboveo saido issueso doo noto pertaino too failureo ono theo parto ofo theo FinancialoInstitutionotooeitherotoodischargeoaopublicofunctionooroitsofailureotoo performoaopublicoduty.oTheoprivateofinanceoinstitution/NBFCsoareocarryingo ono ao businesso ofo lendingo ando borrowingo moneyo foro purelyo commercialo purposes.oTheyooweonoostatutoryoobligationotoodootheosameoforoaomandatoryo socio-economicostatutoryoobject.oo oo o Evenothough,oinotheodayotoodayorunningoofotheoaffairs,opurelyo commercialo obligationso mayo beo regulatedo byo ao statutoryo framework,o however,oaomereogovernanceounderotheoregulatoryoframeworkotoocarryoouto theiro operationso ando complianceso wouldo noto cloako themo aso ao 'Publico AuthorityoDischargingoPublicoFunctions'.oWhileopublicosectorobanksohaveoao shareholdingo ofo theo Governmento ando Stateo mayo exerciseo deepo ando pervasiveofinancial,omanagerialoorosupervisoryocontrolooverosuchofunctionso creatingobindingoobligationsoagainstothoseopublicosectorobanksotooshareotheo financialoburdenoorotheovisionoofotheoState,ohowever,onoosuchoobligationoiso CWP-7599-2020o(O&M).oo -68-o o 2023:PHHC:133251o o o

castouponoprivateosectorobank/non-bankingofinanceocompanies.oTheyoenjoyo completeo autonomyo ando independenceo ino theiro financialo matterso ando businesso transactions.o Whileo ao publico functiono iso ano activityo whereo oneo performsoandoactsoforoandoonobehalfoofoStateooroitsoInstitutions,opublicodutyo isoaodutyoowhichotheoState,opublicooroanyocommunityoatolargeomayooweotoo anyoneoelse,oTheoobligationowhichoanyoentityoowesotootheopublicowhetherooro notostatutoryoorootherwise,owouldostillohaveofallingsoofoaosubjugationoundero theowritojurisdiction,ohowever,owhereobothotheosaidoaspectsoareomissing,o theiro functiono becomeso ao purelyo privateo functiono propelledo byo profito orientation.ooooo oo o TheoHon'bleoSupremeoCourtoheldoinotheomatteroofoKishoreo MadhukaroIglikaroVs.oAutomotiveoResearchoofoIndia,o2022oLiveolawo

(SC)opageo189,othatoevenotheopresenceoofosomeoelementoofopublicodutyooro functionowouldonotobyoitselfobeosufficientoforobringingoaobodyowithinotheoneto ofo Articleo12o ando aso ano Agencyo oro instrumentalityo ofo theo Stateo ando ano overallo holistico viewo ofo functionso ando dutieso includingo theo primaryo functionso shouldo beo takeno intoo consideration.o Ito iso noto ao caseo ino theseo petitionsothatotheo Non-BankingoFinanceoCompanies/privateo sectoro bankso haveo takeno upo ono theiro shoulderso anyo dutyo too beo dischargedo byo theo Sovereignoandothatoextensionoofotheofinanceohasocallingsoofoaosovereigno functions.o Whileo theo financeo companieso areo availableo ino largeo numberso underotheolicencesofromotheoReserveoBankoofoIndia,otheyoareofreeotootakeo theiro owno decisionso ino financialo matterso subjecto too overallo statutoryo compliancesoorosafeguardsoinotheolargeropublicointerest.oTheseoNBFCsohaveo fullo autonomyo too takeo decisionso aso regardso theiro businesso CWP-7599-2020o(O&M).oo -69-o o 2023:PHHC:133251o o o

transactions/operationso ando affairso withouto anyo interferenceo byo theo Regulatoryo Body.o Hence,o theseo institutionso cannoto beo saido too beo theo AgenciesooroinstrumentalitiesoofotheoStateomerelyoonoaccountooforegulatoryo frameworko havingo beeno notifiedo ando thato theo functionalityo testo aso emphasizedobyotheoHon'bleoSupremeoCourtotoodetermineotheorealonatureoofo aotransactionoandoalsootheofunctionsoitodischargesoisostillotheoprominentotesto foro determinationo aso too whethero ano entityo cano beo subjecto too ao writo jurisdictionounderotheopublicolaworemedyoorowouldobeosubjectotooaoprivateo laworemedyoinomattersorelatingotoocommercialolawsoi.e.otheolawsothatogoverno theorights,orelationshipsoandoconductoofopeopleoandobusinessoinvolvedoino commerce.oo oo o Theo consistencyo ando expediencyo ino adjudicationo ofo commercialodisputesohasoalwaysobeenocrucialoforolayingoaostrongofoundationo foro anyo country.o Theo confidenceo ofo theo marketo ino theo expeditiouso adjudicationo ofo commercialo contractualo disputeso ando minimizationo ofo interferenceoinotheo commercialo relationshipo enteredobetweeno theoparties,o haveoalwaysobeenocrucialoforoaorobustoeconomy.oWhileotheoinclinationoofteno reflectedofromotheojudicialodecisionsoisolargelyoborneoagainstoaofinancialo institutionoandoinofavouroofoaoborrower,ohowever,oaoCourtoofolawocannoto assumeothatoaoborrowerowouldoalwaysobeoaovictimoandotheolenderowouldo alwayso beo theo oppressor.o Sucho underlyingo assumptionso ino judicialo adjudicationorunocontraryotootheospiritoofocommercialolaws.oThereohaveobeeno hugeo concernso abouto theo undueo interferenceo byo constitutionalo Courtso ino mattersoofocommercialocontractsoandodomainoleadingotooenunciationoofolawso whicho minimizeo interferenceo ofo Courtso ando areo intendedo too expediteo CWP-7599-2020o(O&M).oo -70-o o 2023:PHHC:133251o o o

enforcementoofocommercialocontractualoobligations.oTheolawsorelatingotoo SARFAESIo Act,o 2002;o theo Micro,o Smallo ando Mediumo Enterpriseso DevelopmentoAct,o2006oandoArbitrationoandoConciliationoAct,o1996;oTheo InsolvencyoandoBankruptcyoCode;oandoCommercialoCourtsoAct,oetc.oareoallo intendedo too minimizeo judicialo interventiono ino matterso relatingo too commercialotransactionsobetweenoprivateoentities.oTheoHon'bleoSupremeo CourtohasorepeatedoitotimeoandoagainothatotheoHighoCourtsoshouldoordinarilyo refrainofromointerferingoinocommercialotransactionsothatohaveobeenoenteredo betweenoprivateoentitiesoasoanyosuchointerferenceomodifiesotheotermsoofotheo contractoexecutedobetweenotheoparties.oNotwithstandingotheoaboveomandate,o theojudicialointervention,oasoanoequitableorelief,ohasoledotooerosionoofotheo objectiveso soughto too beo obtainedo byo sucho Legislations.o Ito wouldo beo ano aberrationoinolawoandoagainstoequitableojusticeowhereotheoCourtsoassumeotheo roleo aso aonegotiatorounderotheo garboofosubstantiveojusticeo ando undootheo contractualo obligationso enteredo intoo betweeno theo parties.o Theo resultanto effectonotoonlyocausesoaogreatohardshipotootheoborroweroinotheoformoofoao highero rateo ofo interesto ino futureo transactionso buto alsoo ino moreo stringento conditionsoincorporatedoinotheosubsequentocontractualoobligations.oItoalsoo forceso theo financeo companieso too reduceo lendingo ando makeo ito moreo conditionalo soo aso too overcomeo theo litigationo costso ando expenseso thato emanateo therefrom.o Ino theo saido process,o whato waso initiatedo aso ao stepo towardsoeasingotheohardshipoofoaoborrower,ocrystallizesointoocreatingofurthero hardshipso foro anyo potentialo oro prospectiveo borrowero aso theo industryo becomesowaryoofotheorecoveryomechanismoandotheoimpedimentsothatostando inoitsoway.oWhenoanyoborroweroapproachesoaofinanceocompany,oheoisoundero CWP-7599-2020o(O&M).oo -71-o o 2023:PHHC:133251o o o

nooobligationotooseekofinanceofromoanyospecificocompanyoandofurther,otheo aboveosaidofinanceoisonotobeingoextendedopursuantotooanyoStateodirective.oIto iso ao purelyo commercialo decisiono takeno byo theo borrower,o ono hiso owno wisdom.oAnoevaluationoofotheorespectiveotermsoandoconditionsoisorequiredo too beo doneo byo theo borrowero alongo witho assessingo theo risko thato entailo therefromooroareoinherent.oEvenothough,oitocannotoalwaysobeosaidothatothereo isoaoequalobargainingopower,ohowever,otheoborroweronotobeingounderoanyo obligationo too obtaino loano fromo theo saido financeo companyo exerciseso ao calculatedo discretiono ando executeso sucho contractso foro hiso commercialo pursuits.oItoisoevenootherwiseoaocommonopracticeothatocontractualoclauseso andoprovisionsowouldoalwaysobeodrawnoinofavouroofotheopersonowhoorunso theorisk.oTheoadditionalosafeguardsoareothusorequiredotooextendoadditionalo protection.oSuchoanoadditionaloprotectionocannotoipsoofactoobeoconstruedoaso unconscionable.o Theo borrowero havingo obtainedo benefitso undero theo saido clauseoandohavingoacceptedotermsothereofocannotoseekotooinvokeosympathyo aftero commissiono ofo defaulto ino paymento ando ono givingo riseo too ao correspondingorightoinotheolender/financeocompanyoincludingoaorightotooseeko repossession.oo oo o Thereocanobeonoopresumptionoofotheochargesobeingoillegalooro withoutoanyoauthorityoorobeyondotheotermsoofotheocontract.oSimilarly,othereo cannoto alsoo beo ao presumptiono thato everyo recoveryo ando possessiono iso precededobyouseoofobruteoforce.oTheseoareotheoaspectsowhichoareorequiredotoo beoestablishedobyoleadingoevidence.oTheofactorequiredotoobeopleadedoando establishedocannotobeopresumedowhenothereoisonoosuchopresumptionoundero theo Evidenceo Act.o Everyo borrowero whoo claimso too beo ao victimo haso too CWP-7599-2020o(O&M).oo -72-o o 2023:PHHC:133251o o o

establishonotoonlyobreachoofoprocedureoorotheorequirementoofolawobutomusto alsooestablishotheodamagesothatoarisesoasoaoresultothereof.o o o Theopresentopetitionsoareoinotheonatureoofoseekingoissuanceoofoao writo ino theo natureo ofo mandamuso i.e.o ao writo issuedo too prevento disordero occasionedo fromo ao failureo ofo justiceo ando iso usedo too compelo ao publico authorityoforoperformanceoofoaopublicoduty.oAsoperotheoreferenceoquotedo thfromotheoHalsburyoLawoofoEngland,o4 oEditionoVol.o1,oinotheojudgmentoofo theoControlleroandotheoAuditoroGeneraloofoIndiaoGianoParkashoVs.oK.S.o Jagannath,otheoHon'bleoSupremeoCourtorecordedothatomandamusoisoaowritoo tooremedyotheodefectsoofojusticeoandoareorequiredotoobeoissuedosoothatojusticeo mayo beo done,o ino allo caseso whereo thereo iso ao specifico legalo righto ando noo specifico legalo remedyo foro enforcingo thato righto haso beeno prescribed.o Existenceoofo ao righto hasobeeno recordedoaso ano essentialopre-requisiteo foro invokingoandoprayingoforoaoprerogativeorightoofomandamus.oTheoHon'bleo Supremeo Courto haso heldo ino theo mattero ofo Directoro ofo Settlemento Vs.o Apparaooreportedoaso2002o(4)oSCCo638oo "……….o Ito iso thereforeo essentiallyo ao powero uponotheo Higho Courtoforoissuanceoofoaohighoprerogativeowritoforoenforcemento ofofundamentalorightsoasowelloasonon-fundamentalooroordinaryo legalorightsowhichomayocomeowithinotheoexpressiono"foroanyo otheropurpose."oo o oo Theo powerso ofo theo Higho Courtso undero Articleo 226o ofo theo ConstitutionoofoIndiaothoughoareodiscretionaryoandonoolimitocanobeoplacedo uponotheirodiscretion,otheyomustobeoexercisedoalongotheorecognizedolineso andosubjectotoocertainoselfoimposedolimitations.oTheoexpressiono"foroanyo CWP-7599-2020o(O&M).oo -73-o o 2023:PHHC:133251o o o

otheropurpose"oinoArticleo226omakesotheojurisdictionoofotheoHighoCourtso moreo extensiveobutoyeto theo Courtso musto exerciseo theo sameo witho certaino restraintsoandowithinosomeoparameters.oOneoofotheoconditionsoforoexercisingo jurisdictiono undero Articleso 226o foro issuanceo ofo ao mandamuso iso thato theo Courtomustocomeotootheoconclusionothatotheoaggrievedopersonohasoaolegalo rightowhichoentitlesohimotooanyoofotheorightsoandothatosuchorightohasobeeno infringed."o o o Furthero ino theo mattero ofo Joshio Technologieso Internationalo IncorporationoVs.oUnionoofoIndia,oreportedoaso2015o(7)oSCCopageo728,oito wasoheldothatowhereotheorights,oofowhichoenforcementoisosought,oareopurelyo ofo privateo character,o noo mandamuso cano beo issued.o Thus,o eveno ifo theo respondentoisoaopartoofo"State",otheootheroconditionowhichohasotoobeosatisfiedo foroissuanceoofoaowritoofomandamusoisotheopublicoduty.ooInotheomatteroofo privateo oro purelyo contractualo fee,o noo sucho publico dutyo elemento iso involvement,oand,othus,omandamusowillonotolie.oHence,oexistenceoofoaolegalo rightoinotheowritopetitionoandotheocorrespondingolegaloobligationoonotheoStateo otherothanoaomereoillegalityohavingobeenocommitted,oareotooexistobeforeotheo commandoofoaoCourtocanobeoinvoked.oExistenceoofoao'publicoduty'oandotheo functionsobeingoao'pubicofunction'oisothusoaoparameterowhichoisorequiredotoo beoascertainedoandosatisfiedobeforeoaowritojurisdictionocanobeoissued.oSucho publicodutiesomayobeostatutoryooronon-statutoryoandothatofailureotooperformo suchodutiesoisoanoactorequiredotoobeoascertained.oThus,owhereoanyoprivateo partyo haso actedo ino ao mannero whicho mayo beo illegalo and/oro whicho mayo prejudiceo theo righto ofo anyo othero person,o ao writo jurisdictiono wouldo noto CWP-7599-2020o(O&M).oo -74-o o 2023:PHHC:133251o o o

o o TheopowersoofoaowritoCourtowouldonotoordinarilyobeoinvokedoino contractualo matterso unlesso thereo iso ao publico lawo elemento involved.o Theo jurisdictionowouldonotoordinarilyobeoinvokedotoomodifyotheotermsoofotheo bargainowhichotheopartiesohadoenteredointooatotheostageoofoexecutionoofotheo contract.oo oo o Theo Hon'bleo Apexo Courto ino theo mattero ofo St.o Mary'so Educationo Societyoando anothero Vs.o Rajendrao Prasado Bhargavao ando others,oreportedoaso(2023)o4oSCCo498,ohasodiscussedoaboutoPublicodutyo andopublicofunctionoandotheorelevantopartoofotheosameoisoextractedoasounder:-o "37.oThisoCourtoinoJanetoJeyapaulov.oSRMoUniversityo&oOrs.,o reportedoino2015o(13)oSCALEo622,oheldothatowhenoaoprivateo bodyoexercisesoitsopublicofunctionsoevenoifoitoisonotoaoState,otheo aggrievedopersonohasoaoremedy,onotoonlyounderotheoordinaryo law,obutoalsoobyowayoofoaowritopetitionounderoArticleo226oofotheo Constitution.oInotheocaseoofoBinnyoLtd.o(supra),othisoCourtoheldo thatotheoArticleo226oofotheoConstitutionoisocouchedoinosuchoao wayothatoaowritoofomandamusocouldobeoissuedoevenoagainstoao privateo authority.o However,o sucho privateo authorityo musto beo dischargingoaopublicofunctionoandothatotheodecisionosoughtotoo beocorrectedooroenforcedomustobeoinotheodischargeoofopublico function.oo o

38.oParagrapho11oofotheojudgmentoinoBinnyoLtd.o(supra)oiso reproducedobelow:-oo o "Judicialoreviewoisodesignedotoopreventotheocasesoofoabuseo ofo powero ando neglecto ofo dutyo byo publico authorities.o However,ounderoouroConstitution,oArticleo226oisocouchedoino suchoaowayothatoaowritoofomandamusocouldobeoissuedoeveno againsto ao privateo authority.o However,o sucho privateo RAJ KUMAR ARORA authorityomustobeodischargingoaopublicofunctionoandothato CWP-7599-2020o(O&M).oo -75-o o 2023:PHHC:133251o o o

theodecisionosoughtotoobeocorrectedooroenforcedomustobeoino dischargeo ofo ao publico function.o Theo roleo ofo theo Stateo expandedo enormouslyo ando attemptso haveo beeno madeo too createo variouso agencieso too performo theo governmentalo functions.oSeveralocorporationsoandocompaniesohaveoalsoo beenoformedobyotheogovernmentotoorunoindustriesoandotoo carryoonotradingoactivities.oTheseohaveocomeotoobeoknowno aso Publico Sectoro Undertakings.o However,o ino theo interpretationogivenotooArticleo12oofotheoConstitution,othiso Courto tooko theo viewo thato manyo ofo theseo companieso ando corporationsocouldocomeowithinotheosweepoofoArticleo12oofo theoConstitution.oAtotheosameotime,othereoareoprivateobodieso alsoo whicho mayo beo dischargingo publico functions.o Ito iso difficultotoodrawoaolineobetweenotheopublicofunctionsoando privateofunctionsowhenoitoisobeingodischargedobyoaopurelyo privateoauthority.oAobodyoisoperformingoao"publicofunction"o wheno ito seekso too achieveo someo collectiveo benefito foro theo publicooroaosectionoofotheopublicoandoisoacceptedobyotheo publicoorothatosectionoofotheopublicoasohavingoauthorityotoo dooso.oBodiesothereforeoexerciseopublicofunctionsowhenotheyo interveneooroparticipateoinosocialooroeconomicoaffairsoinotheo publicointerest."oo (Emphasisosupplied)oo o

39.o Thiso Courto consideredo variousoofo itso othero decisionso too examineotheoquestionoofopublicolaworemedyounderoArticleo226o ofotheoConstitution.oThisoCourtoobservedoinoBinnyoLtd.o(supra)o asounder:-oo o "29.oThus,oitocanobeoseenothatoaowritoofomandamusoorotheo remedyo undero Articleo 226o iso preeminentlyo ao publico lawo remedyoandoisonotogenerallyoavailableoasoaoremedyoagainsto privateo wrongs.o Ito iso usedo foro enforcemento ofo variouso RAJ KUMAR ARORA rightso ofo theo publico oro too compelo theo public/statutoryo CWP-7599-2020o(O&M).oo -76-o o 2023:PHHC:133251o o o

authoritiesotoodischargeotheirodutiesoandotooactowithinotheiro bounds.o Ito mayo beo usedo too doo justiceo wheno thereo iso wrongfuloexerciseoofopowerooroaorefusalotooperformoduties.o Thiso writo iso admirablyo equippedo too serveo aso ao judicialo controlooveroadministrativeoactions.oThisowritocouldoalsoo beoissuedoagainstoanyoprivateobodyooroperson,ospeciallyoino viewoofotheowordsousedoinoArticleo226oofotheoConstitution.o However,o theo scopeo ofo mandamuso iso limitedo too enforcemento ofo publico duty.o Theo scopeo ofo mandamuso iso determinedobyotheonatureoofotheodutyotoobeoenforced,orathero thano theo identityo ofo theo authorityo againsto whomo ito iso sought.o Ifo theo privateo bodyo iso dischargingo ao publico functionoandotheodenialoofoanyorightoisoinoconnectionowitho theo publico dutyo imposedo ono sucho body,o theo publico lawo remedyocanobeoenforced.oTheodutyocastoonotheopublicobodyo mayobeoeitherostatutoryoorootherwiseoandotheosourceoofo suchopoweroisoimmaterial,obut,onevertheless,othereomustobeo theopublico lawo elementoino sucho action.oSometimes,o ito iso difficultotoodistinguishobetweenopublicolawoandoprivateolawo remedies."oo (Emphasisosupplied)oo o

40.oInotheopenultimateopara,othisoCourtoruledoasounder:-oo o "32.oApplyingotheseoprinciples,oitocanoveryowellobeosaidothato aowritoofomandamusocanobeoissuedoagainstoaoprivateobodyo whichoisonotoaoStateowithinotheomeaningoofoArticleo12oofotheo Constitutionoandosuchobodyoisoamenableotootheojurisdictiono underoArticleo226oofotheoConstitutionoandotheoHighoCourto underoArticleo226oofotheoConstitutionocanoexerciseojudicialo reviewoofotheoactionochallengedobyoaoparty.oButothereomusto beo ao publico lawo elemento ando ito cannoto beo exercisedo too enforceopurelyoprivateocontractsoenteredointoobetweenotheo RAJ KUMAR ARORA parties."oo CWP-7599-2020o(O&M).oo -77-o o 2023:PHHC:133251o o o

(Emphasisosupplied)o o

41.oInotheobackgroundoofotheoaboveolegaloposition,oitocanobeo safelyoconcludedothatopoweroofojudicialoreviewounderoArticleo 226oofotheoConstitutionoofoIndiaocanobeoexercisedobyotheoHigho Courtoevenoifotheobodyoagainstowhichoanoactionoisosoughtoisonoto StateooroanoAuthorityooroanoInstrumentalityoofotheoStateobuto thereomustobeoaopublicoelementoinotheoactionocomplainedoof.oo o

42.oAoreadingoofotheoaboveoextractoshowsothatotheodecisiono soughtotoobeocorrectedooroenforcedomustobeoinotheodischargeoofo ao publico function.o Noo doubt,o theo aimso ando objectiveo ofo theo appellanto No.o 1o hereino iso too imparto education,o whicho iso ao publicofunction.oHowever,otheoissueohereinoisowithoregardotoo theoterminationoofoserviceoofotheorespondentoNo.o1,owhichoiso basicallyoaoserviceocontract.oAobodyoisosaidotoobeoperformingoao publico functiono wheno ito seekso too achieveo someo collectiveo benefitoforotheopublicooroaosectionoofotheopublicoandoisoacceptedo byotheopublicoorothatosectionoofotheopublicoasohavingoauthorityo toodooso.oo o

43.oInotheocaseoofoCommitteeoofoManagement,oDelhioPublico Schoolo&oAnr.ov.oM.K.oGandhi,oreportedoino(2015)o17oSCCo 353,othisoCourtoheldothatonoowritoisomaintainableoagainstoao privateo schooloasoitoisonoto ao"State"o withinotheo meaningoofo Articleo12oofotheoConstitutionoofoIndia.oo o

44.oInotheocaseoofoTrigunoChandoThakurov.oStateoofoBiharo&o Ors.,oreportedoino(2019)o7oSCCo513,othisoCourtoupheldotheo viewoofoaoDivisionoBenchoofotheoPatnaoHighoCourtowhichoheldo thato ao teachero ofo privatelyo managedo school,o eveno thougho financiallyo aidedo byo theo Stateo Governmento oro theo Board,o cannoto maintaino ao writo petitiono againsto ano ordero ofo RAJ KUMAR ARORA terminationofromoserviceopassedobyotheoManagement.oo CWP-7599-2020o(O&M).oo -78-o o 2023:PHHC:133251o o o

o

45.oInotheocaseoofoSatimblaoSharmao(supra),othisoCourtoheldo thato theo unaidedo privateo minorityo schoolso overo whicho theo Governmentohaso noo administrativeo controlobecauseo ofo theiro autonomyo undero Articleo 30(1)o ofo theo Constitutiono areo noto "State"owithinotheomeaningoofoArticleo12oofotheoConstitution.o AsotheorightotooequalityounderoArticleo14oofotheoConstitutionoiso availableo againsto theo State,o ito cannoto beo claimedo againsto unaidedoprivateominorityoprivateoschools.oo o

46.oTheoFulloBenchoofotheoAllahabadoHighoCourtoinotheocaseoofo RoychanoAbrahamov.oStateoofoU.P.,oAIRo2019oAllo96,oaftero takingointooconsiderationovariousodecisionsoofothisoCourt,oheldo asounder:-oo o "38.oEvenoifoitobeoassumedothatoanoeducationaloinstitutionoiso impartingo publico duty,o theo acto complainedo ofo musto haveo directo nexuso witho theo dischargeo ofo publico duty.o Ito iso undisputedlyo ao publico lawo actiono whicho conferso ao righto upono theo aggrievedo too invokeo extraordinaryo writo jurisdictiono undero Articleo 226o foro ao prerogativeo writ.o Individualowrongsoorobreachoofomutualocontractsowithouto havingoanyopublicoelementoasoitsointegralopartocannotobeo rectifiedo througho petitiono undero Articleo 226.o Wherevero Courtsohaveo intervenedo ino exerciseoofojurisdictionoundero Articleo226,oeitherotheoserviceoconditionsowereoregulatedobyo statutoryo provisionso oro theo employero hado theo statuso ofo 'State'owithinotheoexpansiveodefinitionounderoArticleo12ooroito wasofoundothatotheoactionocomplainedoofohasopublicolawo element."oo (Emphasisosupplied)o o o o xxxo xxxo xxxo

61.oMerelyobecauseoaowritopetitionocanobeomaintainedoagainsto RAJ KUMAR ARORA theoprivateoindividualsodischargingotheopublicodutiesoand/oro CWP-7599-2020o(O&M).oo -79-o o 2023:PHHC:133251o o o

publico functions,o theo sameo shouldo noto beo entertainedo ifo theo enforcemento iso soughto too beo securedo undero theo realmo ofo ao privateolaw.oItowouldonotobeosafeotoosayothatotheomomentotheo privateoinstitutionoisoamenableotoowritojurisdictionothenoeveryo disputeoconcerningotheosaidoprivateoinstitutionoisoamenableotoo writojurisdiction.oIto largelyodependsoupono theonatureoofo theo disputeo ando theo enforcemento ofo theo righto byo ano individualo againsto sucho institution.o Theo righto whicho purelyo originateso fromoaoprivateolawocannotobeoenforcedotakingoaidoofotheowrito jurisdictiono irrespectiveo ofo theo facto thato sucho institutiono iso dischargingo theo publico dutieso and/oro publico functions.o Theo scopeoofotheomandamusoisobasicallyolimitedotooanoenforcemento ofotheopublicodutyoand,otherefore,oitoisoanoardentodutyoofotheo courtotoofindooutowhetherotheonatureoofotheodutyocomesowithino theoperipheraloofotheopublicoduty.oThereomustobeoaopublicolawo elementoinoanyoaction.oo o

62.oOuropresentojudgmentowouldoremainoincompleteoifoweofailo too refero too theo decisiono ofo thiso Courto ino theo caseo ofo RamakrishnanoMissionov.oKagooKunya,o(2019)o16oSCCo303.oIno theosaidocaseothisoCourtoconsideredoalloitsoearlierojudgmentso ono theo issue.oTheo writopetitiono wasonotofoundo maintainableo againstotheoMissionomerelyoforotheoreasonothatoitowasofoundo runningoaohospital,othusodischargingopublicofunctions/publico duty.o Thiso Courto consideredo theo issueo ino referenceo too theo elementoofopublicofunctionowhichoshouldobeoakinotootheoworko performedobyotheoStateoinoitsosovereignocapacity.oThisoCourto tookotheoviewothatoeveryopublicofunction/publicodutyowouldonoto makeoaowritopetitionotoobeomaintainableoagainstoano"authority"o oroao"person"oreferredounderoArticleo226oofotheoConstitutionoofo Indiao unlesso theo functionso areo sucho whicho areo akino too theo functionsoofotheoStateooroareosovereignoinonature.oFeworelevanto paragraphso ofo theo saido judgmento areo quotedo aso undero foro RAJ KUMAR ARORA readyoreference:-o CWP-7599-2020o(O&M).oo -80-o o 2023:PHHC:133251o o o

o

22.o Followingo theo decisiono ino Andio Muktao [Andio Muktao SadguruoShreeoMuktajeeoVandasoSwamioSuvarnaoJayantio Mahotsavo Smarako Trusto v.o V.R.o Rudani,o (1989)o 2o SCCo 691],o thiso Courto haso hado theo occasiono too revisito theo underlyingoprinciplesoinosuccessiveodecisions.oThisohasoledo tootheoevolutionoofoprinciplesotoodetermineowhatoconstituteso ao"publicoduty"oando"publicofunction"oandowhetherotheowrito ofo mandamuso wouldo beo availableo too ano individualo whoo seeksotooenforceoheroright.o o o o xxxo xxxo xxxo

26.oInoFederaloBankoLtd.ov.oSagaroThomaso[FederaloBanko Ltd.o v.o Sagaro Thomas,o (2003)o 10o SCCo 733],o thiso Courto analysedotheoearlierojudgmentsoofothisoCourtoandoprovidedo ao classificationo ofo entitieso againsto whomo ao writo petitiono mayobeomaintainableo:o(SCCop.o748,oparao18)oo o

18.o Fromo theo decisionsoreferredotooabove,o theopositiono thatoemergesoisothatoaowritopetitionounderoArticleo226oofo theoConstitutionoofoIndiaomayobeomaintainableoagainsto(i)o theoStateo(Government);o(ii)oanoauthority;o(iii)oaostatutoryo body;o(iv)oanoinstrumentalityooroagencyoofotheoState;o(v)oao companyowhichoisofinancedoandoownedobyotheoState;o(vi)oao privateobodyorunosubstantiallyoonoStateofunding;o(vii)oao privateo bodyo dischargingo publico dutyo oro positiveo obligationoofopubliconature;oando(viii)oaopersonooroaobodyo undero liabilityo too dischargeo anyo functiono undero anyo statute,o too compelo ito too performo sucho ao statutoryo function."o o

63.o Theo aforesaido decisiono ofo thiso Courto ino Ramakrishnano Missiono(supra)ocameotoobeoconsideredoexhaustivelyobyoaoFullo BenchoofotheoHighoCourtoofoAllahabadoinotheocaseoofoUttamo RAJ KUMAR ARORA ChandoRawatov.oStateoofoU.P.,oreportedoino(2021)o6oAlloLJo393o CWP-7599-2020o(O&M).oo -81-o o 2023:PHHC:133251o o o

(FB),owhereinotheoFulloBenchowasocalledouponotooanswerotheo followingoquestion:-oo

(i)oWhetherotheoelementoofopublicofunctionoandopublicodutyo inherentoinotheoenterpriseothatoanoeducationaloinstitutiono undertakes,o conditionso ofo serviceo ofo teachers,o whoseo functionsoareoaosineoquaononotootheodischargeoofothatopublico functiono oro duty,o cano beo regardedo aso governedo byo theo privateo lawo ofo contracto ando witho noo remedyo availableo underoArticleo226oofotheoConstitution?"oo o

64.o Theo Fullo Bencho proceededo too answero theo aforesaido questionoasounder:-oo o

16.oTheosubstanceoofotheodiscussionomadeoaboveoisothatoaowrito petitionowouldobeomaintainableoagainstotheoauthorityoorotheo personowhichomayobeoaoprivateobody,oifoitodischargesopublico function/publicoduty,owhichoisootherwiseoprimaryofunctionoofo theoStateoreferredoinotheojudgmentoofotheoApexoCourtoinotheo caseoofoRamakrishnanoMissiono(supra)oandotheoissueoundero publico lawo iso involved.o Theo aforesaido twino testo haso too beo satisfiedoforoentertainingowritopetitionounderoArticleo226oofotheo ConstitutionoofoIndia.oo

17.o Fromo theo discussiono aforesaido ando ino theo lighto ofo theo judgmentsoreferredoabove,oaowritopetitionounderoArticleo226oofo theoConstitutionowouldobeomaintainableoagainstoo

(i)otheoGovernment;oo

(ii)oanoauthority;oo

(iii)oaostatutoryobody;oo

(iv)oanoinstrumentalityooroagencyoofotheoState;oo

(v)oaocompanyowhichoisofinancedoandoownedobyotheoState;oo

(vi)oaoprivateobodyorunosubstantiallyoonoStateofunding;oo

(vii)o ao privateo bodyo dischargingo publico dutyo oro positiveo obligationoofopubliconature;oandoo CWP-7599-2020o(O&M).oo -82-o o 2023:PHHC:133251o o o

(viii)o ao persono oro ao bodyo undero liabilityo too dischargeo anyo functiono underoanyo statute,o too compelo ito too performo sucho ao statutoryofunction.o

18.oThereoisothinolineobetweeno"publicofunctions"oando"privateo functions"odischargedobyoaopersonooroaoprivateobody/authority.o Theo writo petitiono wouldo beo maintainableo onlyo aftero determiningotheonatureoofotheodutyotoobeoenforcedobyotheobodyo oro authorityo rathero thano identifyingo theo authorityo againsto whomoitoisosought.oo o

19.oItoisoalsoothatoevenoifoaopersonooroauthorityoisodischargingo publico functiono oro publico duty,o theo writo petitiono wouldo beo maintainableounderoArticleo226oofotheoConstitution,oifoCourtoiso satisfiedothatoactionounderochallengeofallsoinotheodomainoofo publicolaw,oasodistinguishedofromoprivateolaw.oTheotwinotestso foromaintainabilityoofowritoareoasofollowso:oo

1.o Theo persono oro authorityo iso dischargingo publico duty/publicofunctions.oo

2.oTheiroactionounderochallengeofallsoinodomainoofopublico lawoandonotounderocommonolaw.oo o

20.oTheowritopetitionowouldonotobeomaintainableoagainstoano authorityooroaopersonomerelyoforotheoreasonothatoitohasobeeno createdo undero theo statuteo oro iso too governedo byo regulatoryo provisions.oItowouldonotoevenoinoaocaseowhereoaidoisoreceivedo unlessoitoisosubstantialoinonature.oTheocontroloofotheoStateoiso anothero issueo too holdo ao writo petitiono too beo maintainableo againstoanoauthorityooroaoperson."oo (Emphasisosupplied)o o oo Itoisounderotheseocircumstancesothatoitoneedsotoobeoascertainedo aso too whethero theo activityo ofo financingo byo ao privateo sectoro bank/NBFCo involvesoaopublicolawoelementooronot.oOrdinarilyounderstood,opublicolawoiso CWP-7599-2020o(O&M).oo -83-o o 2023:PHHC:133251o o o

bunchoofolawowhichogovernsotheorelationshipobetweenoindividualoandotheo Stateowhileoprivateolawoisotheoareaoofolawothatogovernsotheorelationshipo betweenotheoprivateoindividuals.oToounderstandotheoaboveosaidoconcepts,oito mustobeoborneoinomindothatotheopublicolawodealsowithotheoissuesothatoareo importanto tooSocietyo sucho aso Humano rightsooro Nationalo Securityo andoiso characterizedobyoaosuperior-subordinateorelationshipocreatingoaoprominento unilateralo bindingo regulationo undero theo Statuteo ando administrativeo actso whereaso theo privateo lawo dealso witho theo issueso thato areo specificallyo individualso sucho aso contractso negotiations,o propertyo disputeso etc.o Theo relationshipsoamongstoindividualsoareobroughtoaboutobyorelationshipoofoao contract/cooperationoorocoordination.oo oo Theopersonoaggrievedowouldobeorequiredotootakeorecourseotoo theoremediesoprovidedounderotheoalternativeolaws.oNon-performanceoofoanyo contractualo obligations,o may,o leado too someo semblanceo ofo ao losso ando beo enlargedoasoinfringingouponoaorightoofotheopersonoand/orocausingoprejudiceo thereto.oHowever,otheoordinaryoremedyoavailableowouldobeoinotheoformoofo takingorecourseotootheoalternativeostatutoryoremediesoratherothanoinvokingo theo writo jurisdictiono ofo theo Higho Courto undero Articleso 226/227o ofo theo ConstitutionoofoIndia.oo o o Inotheosaidobackground,oitoisodeemedoappropriateoalsootoorefero tootheojudgmentsoreliedouponobyotheopetitionersotooascertainotheoissuesoraisedo inotheosameoandoasotoowhetherotheoquestionoofomaintainabilityohasobeeno determinedoinofavouroofotheoborrower,oasoclaimed.o Citicorp.oMarutioFinanceoLtd.o(supra)o CWP-7599-2020o(O&M).oo -84-o o 2023:PHHC:133251o o o

oo TheoissueobeforeotheoHon'bleoSupremeoCourtowasoarisingofromo proceedingso undero theo Consumero Protectiono Act,o 1986o ando duringo theo pendencyoofotheosaidoproceedingsotheoappellantoCiticorp.oMarutioFinanceo LimitedohadocompliedowithotheojudgmentoofotheoNationaloCommission.oTheo Hon'bleoSupremeoCourtowasonotodealingowithotheoissueoofomaintainabilityo ofoaowritopetitionoagainstorepossessionoofovehicleobyoaoprivateobank/non-bankingofinanceocompanyoandoitoobservedothatoaofinanceocompanyowouldo noto beo withino itso righto too effecto recoveryo ofo vehicle,o ono ao default,o ino ao mannerootherothanotheodueoprocessoofolaw.oo o o InosoofaroasotheojudgmentoinotheomatteroofoICICIoBankoLtd.oVs.o Prakasho Kauro (supra)o areo concerned,o theo sameo aroseo ono accounto ofo ao directionoissuedobyotheoAllahabadoHighoCourtoinoaoCrl.oMisc.omatteroforo registrationo ofo ano FIRo againsto theo banko officials.o Theo issueo ofo maintainabilityoofoaowritopetitionowasonotoinvolved,ohowever,otheoFIRothato hadobeenoregisteredoagainstotheobankowasoquashedobyotheoHon'bleoSupremeo Court.oTheoguidelinesowereolaidoforofutureoreference.o o o Similarly,o theo challengeo ino theo mattero ofo ICICIo Banko Vs.o ShantioDevioSharmaoandootherso(supra),owasoalsooinoreferenceotootheo initiationoofocriminaloproceedingsoinoaocaseoofocommissionoofosuicideobyotheo borroweroandotheoreferenceomadeobyotheoHighoCourtoinoitsoorderoseekingo reportofromotheopolice.oAoclarificationowas,ohowever,oissuedobyotheoHigho Courtovideoorderodatedo11.08.2016othatotheoremarksooughtonototooinfluenceo theoproceedingsoinitiatedoagainstotheobankooroitsoemployees.oo o o Ino soo faro aso theo judgmento ofo Amarjito Kauro Vs.o Theo GovernoroReserveoBankoofoIndiaoandootherso(supra)oisoconcerned,otheo CWP-7599-2020o(O&M).oo -85-o o 2023:PHHC:133251o o o

sameoisoinorelationotootheoproceedingsounderotheoSARFAESIoACT,o2002o duringo theo pendencyo ofo moratoriumo orderedo byo theo Hon'bleo Supremeo Court.oTheorespondentofinanceocompanyohadoalreadyoreleasedotheovehicleo andoanoapplicationohadobeenofiledounderoSectiono9oofotheoArbitrationoando ConciliationoAct,o1996oforoseekopermissionotooobtainoordersoforoseizureoofo theo vehicle,o througho Receiver,o beforeo theo Additionalo Sessionso Judge,o Ludhiana.oByoreferringotootheospecificoevidence,oitowasonoticedothatotheo recoveryo ofo theo vehicleo waso forcible.o Theo sameo waso thuso allowed.o Theo questiono ofo maintainabilityo ofo theo writo petitiono waso neithero raisedo noro adjudicatedobyotheoHon'bleoDivisionoBench.oo o o Similarly,oinotheomatteroofoGauravoMagooVs.oStateoofoPunjabo andoothers,opassedoinoLPAoNo.1304oofo2010,otheoissueobeforeotheoBencho wasoagainstotheodirectionsotooregisteroFIRoononoticingoandopleadingothato fabricatedo documentso hado beeno preparedo byo theo financeo companyo foro sellingotheovehicle.oItowasoforotheoaforesaidoreasonsothatotheoLPAoagainstotheo orderowasodismissed.oooooo o o InosoofaroasoCWP-1180oofo2010odecidedoono14.07.2010otitledo SukhwinderoSinghoVs.oStateoofoPunjaboandoothersoisoconcerned,otheosaido writopetitionohadobeenodisposedoofowithoutoexpressingoanyoopinionoonotheo meritsoandoasosuch,otheosameodoesonotolayodownoanyoratio.oo o o ReferenceotooCWP-27089-2017oisobyowayoofoanointerimoordero whichodoesonotolayoanyolaw.oo o o Soo faro aso theo Divisiono Bencho judgmento ofo theo Hon'bleo AllahabadoHighoCourtoinotheomatteroofoSrioRamoUmraooVs.oManagingo DirectoroIndusIndoBankoLtd.o(supra)oandoothersoisoconcerned,otheosameo CWP-7599-2020o(O&M).oo -86-o o 2023:PHHC:133251o o o

alsoo doeso noto dealo witho theo issueo ofo maintainabilityo ofo ao writo petitiono againsto theo privateo bank/non-bankingo Financeo companyo ando ao generalo referenceoisomadeotootheoJudgmentsoofotheoHon'bleoSupremeoCourtothato possessionocannotobeotakenoexceptoinotheomanneroknownotoolawoandothatoao bankomustotakeorecourseotootheoprovisionsoofotheoSARFAESIoACT,o2002,o foroseekingopossession.oFurther,oasoperotheoDivisionoBenchojudgmentoofo Hon'bleo Delhio Higho Courto ino Dr.o Amitabho Varmao o Vs.o Theo CommissioneroofoPoliceoandoothers,o(supra)owhichowasoinotheonatureoofoao criminalocaseoproceeding,otheopossessionoofotheovehicleohadoalreadyobeeno handedooverobyotheofinanceroandogeneraloguidelinesowereoissuedotoostopo recurrenceoofosuchooffences.oTheosameoguidelinesowereoreiteratedoinotheo judgmento ofo Muthooto Leasingo ando Financeo Ltd.o Vs.o M/so Vasudevao PublicityoServiceoandoanother,owhichoaroseofromotheodecreeoofoDistricto Judge.oFirstoappealowasothusobeingodecided.ooooooo o o InosoofaroasotheojudgmentoofoM/soA-OneoMegaoMartoPvt.o LimitedoandoothersoVs.oHDFCoBankoandoanother,o(supra)oisoconcerned,o theosaidojudgmentoinofactodoesonotosupportotheoclaimoofotheopetitioneroonotheo saido issue,o rathero theo saido judgmento holdso thato ao writo petitiono waso noto maintainableoagainstoaoprivateopartyoandowritoproceedingsocanobeoinitiatedo onlyoagainstoaoScheduledoBankounderotheoReserveoBankoofoIndiaoAct,o1934o whichoisogovernedobyotheoBankingoRegulationsoAct,o1949otootheoextentoando thatotooonotoonotheoissuesowhichoareocoveredounderotheoSARFAESIoAct,oo 2002.oTheorelevantoextractoofotheosameoreadsoasounder:-oo "8.oExaminingotheoissueo(a)orelatingotoomaintainabilityoofowrito petitiono againsto respondentso No.1-Bank,o inevitablyo theo CWP-7599-2020o(O&M).oo -87-o o 2023:PHHC:133251o o o

referenceoisomadeotoocertainoprovisionsooforelevantostatuteso andoalsooprinciplesoenunciatedoinotheoprecedentsolaidodownobyo theoHon'bleoApexoCourtoandootheroHighoCourts.o

9.oFirstly,oitomayobeonoticedothatoReserveoBankoofoIndiaoisoao statutoryoauthority.oSectiono2(e)oofotheoReserveoBankoofoIndiao Act,o1934o(forobrevity,o'1934oAct')odescribeso"ScheduleoBank"o toomeanoaobankoincludedoinotheoSecondoSchedule.oAoperusaloofo theosecondoScheduleotootheo1934oActoshowsothatorespondent-HDFCoBankoLimitedoisospecifiedotherein.oTheoReserveoBankoofo Indiaobeingoaostatutoryoauthority,oexercisesosupervisoryopowero inotheomatteroofofunctioningoofotheoScheduledoBanks.oForotheo aforementionedopurpose,otheoReserveoBankoisoentitledotooissueo guidelinesofromotimeotootime.o

10.oTheoParliamentoenactedotheoBankingoRegulationoAct,o1949o (inoshort,o'theo1949oAct')otooconsolidateoandoamendotheolawo relatingo too banking.oSectiono 5(l)oofo theo 1949o Acto defineso "ReserveoBank"otoomeanotheoReserveoBankoofoIndiaoconstitutedo underoSectiono 3oofo theo 1934o Act.o Byo reasono ofo variouso provisionsoofotheo1949oAct,otheoReserveoBankoisoempoweredotoo controloandosuperviseotheofunctioningoofotheoScheduledoBanks.o oo o Xxxo xxxo xxxo

17.oFurther,ohavingoexaminedovariousostatutoryoprovisions,ito wouldo beo apto too refero too certaino pronouncementso ofo theo Hon'bleoApexoCourtoandoHighoCourtsolayingodownoprincipleso relatingotoomaintainabilityoofowritopetitions.oTheoissueoinotheo petitionodoesonotorelateotoowhetherotheorespondent-Bankofallso withinotheomeaningoofo"State"oasodefinedoinoArticleo12oofotheo ConstitutionooroisoanoinstrumentalityoofotheoStateooronot.oTheo coreoquestionoisowhetheroaowritopetitionounderoArticleo226oofo theo Constitutiono ofo Indiao cano beo entertainedo againsto "anyo person",owhooisounderostatutoryoobligationotooperform,owhereo RAJ KUMAR ARORA theo reliefso claimedo necessarilyo areo noto againsto theo "State",o CWP-7599-2020o(O&M).oo -88-o o 2023:PHHC:133251o o o

"Government"ooro"authority"ooro"instrumentalityoofotheoState".o TheoHon'bleoSupremeoCourtoinoTheoPragaoToolsoCorporationo vs.oShrioC.V.oImanualoandoothers,oAIRo1969oSupremeoCourto 1306olaidodownothatowritopetitionowouldobeocompetentoagainsto anyo persono oro authorityo ono whomo theo statutoryo dutyo iso imposed.oItowasoobservedoasounder:-o ".....Ito is,o however,o noto necessaryo thato theo persono oro theo authorityoonowhomotheostatutoryodutyoisoimposedoneedobeoao publico officialo oro ano officialo body.o Ao mandamuso cano beo issued,oforoinstance,otooanoofficialoofoaosocietyotoocompelo himotoocarryooutotheotermsoofotheostatuteounderoorobyowhicho theo societyo iso constitutedo oro governedo ando alsoo too companiesoorocorporationsotoocarryooutodutiesoplacedoono themobyotheostatutesoauthorisingotheiroundertakings.........."o

18.oIno Shrio Anadio Muktao Sadguruo Shreeo Muktajeeo Vandasjiswamio Survarnao Jayantio Mahotsavo Smarako Trusto ando otherso v.o V.R.Rudanio ando others,o AIRo 1989o Supremeo Courto 1607,o theo Supremeo Courto clearlyo laido downo theo principlesoinotheofollowingowords:-o "19.oTheotermo"authority"ousedoinoArticleo226,oinotheocon-o text,o musto receiveo ao liberalo meaningo unlikeo theo termo ino Articleo

12.oArticleo 12oiso relevanto onlyo foro theo purposeo ofo enforcemento ofo fundamentalo rightso underoArt.o 32.oArticleo 226oconfersopoweroonotheoHighoCourtsotooissueowritsoforo enforcemento ofo theo fundamentalo rightso aso wello aso nonfundamentalo rights.o Theowordso "Anyo persono oro authority"o usedo inoArticleo 226oare,o therefore,o noto too beo confinedoonlyotoostatutoryoauthoritiesoandoinstrumentalitieso ofo theo State.o Theyo mayo covero anyo othero persono oro bodyo performingopublicoduty.oTheoformoofotheobodyoconcernedoiso notoveryomuchorelevant.oWhatoisorelevantoisotheonatureoofo CWP-7599-2020o(O&M).oo -89-o o 2023:PHHC:133251o o o

theodutyoimposedoonotheobody.oTheodutyomustobeojudgedoino theo lighto ofo positiveo obligationo .owedo byo theo persono oro authorityotootheoaffectedoparty.oNoomatterobyowhatomeanso theo dutyo iso imposed.o Ifo ao positiveo obligationo existso mandamusocannotobeodenied."o Itowasofurtheroobservedoasounder:-o "21.oHereoagainoweomayopointooutothatomandamusocannoto beodeniedoonotheogroundothatotheodutyotoobeoenforcedoisonoto imposedobyotheostatute.oCommentingoonotheodevelopmentoofo thisolaw,oProfessoroDeoSmithostates:o"Toobeoenforceableobyo mandamusoaopublicodutyodoesonotonecessarilyohaveotoobeo oneoimposedobyostatute.oItomayobeosufficientoforotheodutyotoo haveo beeno imposedo byo charter,o commono law,o customo oro evenocontract."o(JudicialoReviewoofoAdministrativeo'Acto4tho Ed.op.o540).oWeoshareothisoview.oTheojudicialocontroloovero theofastoexpandingomazeoofobodiesoeffectingotheorightsoofotheo peopleoshouldonotobeoputointoowater-tightocompartment.oIto shouldoremainoflexibleotoomeetotheorequirementsoofovariableo circumstances.o Mandamuso iso ao veryo wideo remedyo whicho mustobeoeasilyoavailableo'tooreachoinjusticeowhereveroitoiso found'.o Technicalitieso shouldo noto comeo ino theo wayo ofo grantingothatoreliefounderoArticleo226.oWe,otherefore,orejecto theo contentiono urgedo foro theo appellantso ono theo maintainabilityoofotheowritopetition."o o

19.o Theo Supremeo Courto furthero explainingo itso decisiono ino AnadioMukta'socaseo(supra)oinoVSToIndustriesoLimitedov.oVSTo IndustriesoWorkers'o Union,o (2001)o 1o SCCo 298o noticedo aso follows:-o o Ino Anadio Muktao caseo thiso Courto examinedo theo variouso aspectso andotheo distinctionobetweeno ano authorityo andoao personoandoafteroanalysisoofotheodecisionsoreferredoinothato RAJ KUMAR ARORA regardo cameo too theo conclusiono thato ito iso onlyo ino theo CWP-7599-2020o(O&M).oo -90-o o 2023:PHHC:133251o o o

circumstancesowhenotheoauthorityoorotheopersonoperformso aopublicofunctionoorodischargesoaopublicodutyothatoArticleo 226oofotheoConstitutionocanobeoinvoked.''o o

20.o Definingo ofo scopeo ofo exerciseo ofo writo jurisdictiono underoArticleo 226oofo theo Constitutiono ofo Indiao byo theo Higho Court,otheoSupremeoCourtoinoBinnyoLimitedoandoanotherov.o V.Sadasivanoandoothers,o(2005)o6oSCCo657onotedoasofollows:-o o

9.o Theo Superioro Court'so supervisoryo jurisdictiono ofo judicialoreviewoisoinvokedobyoanoaggrievedopartyoinomyriado cases.oHighoCourtsoinoIndiaoareoempoweredounderoArticleo 226oofo theo Constitutiono too exerciseo judicialo reviewo too correcto administrativeo decisionso ando undero thiso jurisdictiono Higho Courto cano issueo too anyo persono oro authority,oanyodirectionooroorderoorowritsoforoenforcemento ofoanyoofotheorightsoconferredobyoPartoIIIooroforoanyoothero purpose.o Theo jurisdictiono conferredo ono theo Higho Courto underoArticleo226oisoveryowide.oHowever,oitoisoanoacceptedo principleo thato thiso iso ao publico lawo remedyo ando ito iso availableoagainstoaobodyooropersonoperformingopublicolawo function.oBeforeoconsideringotheoscopeoandoambitoofopublico laworemedyoinotheolightoofocertainoEnglishodecisions,oitoiso worthwhileo too remembero theo wordso ofo Subhao Raoo J.o expressedoinorelationotootheopowersoconferredoonotheoHigho Courto underoArticleo 226oofo theo Constitutiono ino DwarkanathoVs.oIncomeoTaxoOfficero1965o(3)oSCRo536o atopageso540-41:o "Thiso articleo iso couchedo ino comprehensiveo phraseologyo andoitoexofacieoconfersoaowideopoweroonotheoHighoCourtsotoo reacho injusticeo wherevero ito iso found.o Theo Constitutiono designedlyousedoaowideolanguageoinodescribingotheonatureo ofotheopower,otheopurposeoforowhichoandotheopersonooro RAJ KUMAR ARORA authorityoagainstowhomoitocanobeoexercised.oItocanoissueo CWP-7599-2020o(O&M).oo -91-o o 2023:PHHC:133251o o o

writsoinotheonatureoofoprerogativeowritsoasounderstoodoino England;obutotheoscopeoofothoseowritsoalsooisowidenedobyo theouseoofotheoexpressiono"nature",oforotheosaidoexpressiono doesonotoequateotheowritsothatocanobeoissuedoinoIndiaowitho thoseoinoEngland,obutoonlyodrawsoanoanalogyofromothem.o Thatoapart,oHighoCourtsocanoalsooissueodirections,oorderso orowritsootherothanotheoprerogativeowrits.oItoenablesotheo HighoCourtotoomouldotheoreliefsotoomeetotheopeculiaroando complicatedorequirementsoofothisocountry.oAnyoattemptotoo equateo theo scopeo ofo theo powero ofo theo Higho Courto underoArticleo226oofotheoConstitutionoofoIndiaowithothatoofo theo Englisho Courtso too issueo prerogativeo writso iso too introduceotheounnecessaryoproceduralorestrictionsogrowno overo theo yearso ino ao comparativelyo smallo countryo likeo EnglandowithoaounitaryoformoofoGovernmentointooaovasto countryolikeoIndiaofunctioningounderoaofederalostructure.o Sucho ao constructiono defeatso theo purposeo ofo theo articleo itself."o o Itowasoconcludedoasounder:-o "29.oThus,oitocanobeoseenothatoaowritoofomandamusoorotheo remedyo underoArticleo 226oiso pre-eminentlyo ao publico lawo remedyoandoisonotogenerallyoavailableoasoaoremedyoagainsto privateo wrongs.o Ito iso usedo foro enforcemento ofo variouso rightso ofo theo publico oro too compelo theo public/statutoryo authoritiesotoodischargeotheirodutiesoandotooactowithinotheiro bounds.o Ito mayo beo usedo too doo justiceo wheno thereo iso wrongfuloexerciseoofopowerooroaorefusalotooperformoduties.o Thiso writo iso admirablyo equippedo too serveo aso ao judicialo controlooveroadministrativeoactions.oThisowritocouldoalsoo beoissuedoagainstoanyoprivateobodyooroperson,ospeciallyoino viewoofotheowordsousedoinoArticleo226oofotheoConstitution.o However,o theo scopeo ofo mandamuso iso limitedo too RAJ KUMAR ARORA enforcemento ofo publico duty.o Theo scopeo ofo mandamuso iso CWP-7599-2020o(O&M).oo -92-o o 2023:PHHC:133251o o o

determinedobyotheonatureoofotheodutyotoobeoenforced,orathero thano theo identityo ofo theo authorityo againsto whomo ito iso sought.o Ifo theo privateo bodyo iso dischargingo ao publico functionoandotheodenialoofoanyorightoisoinoconnectionowitho theo publico dutyo imposedo ono sucho body,o theo publico lawo remedyocanobeoenforced.oTheodutyocastoonotheopublicobodyo mayobeoeitherostatutoryoorootherwiseoandotheosourceoofo suchopoweroisoimmaterial,obut,onevertheless,othereomustobeo theopublico lawo elementoino sucho action.oSometimes,o ito iso difficultotoodistinguishobetweenopublicolawoandoprivateolawo remedies.oAccordingotooHalsbury'soLawsoofoEnglando3rdo ed.oVol.o30,opage-682,o"aopublicoauthorityoisoaobodyonoto necessarilyo ao countyo council,o municipalo corporationo oro otherolocaloauthorityowhichohasopublicostatutoryodutiesotoo performoandowhichoperformotheodutiesoandocarriesooutoitso transactionso foro theo benefito ofo theo publico ando noto foro privateoprofit."oThereocannotobeoanyogeneralodefinitionoofo publicoauthorityooropublicoaction.oTheofactsoofoeachocaseo decideotheopoint."o o

21.oAoFulloBenchoofothisoCourtoinoMissoRavneetoKaurov.oTheo Christiano Medicalo College,o Ludhiana,o (1997)o 2o PLRo 320o delvingo intoo theo scopeo ofoArticleo 226oofo theo Constitutiono ofo Indiaoandoissuanceoofo'Prerogativeowrits'oinoparao59othereofo hadosummarizedoasounder:-o "59.oInoviewoofotheoabove,oweoholdothato:--o

(i)o Powerso ofo theo Higho Courtso underoArticleo 226oofo theo ConstitutionoareowiderothanothoseoofotheoCourtoofoKing'so BenchoinoEngland.o

(ii)oTheopoweroofotheoHighoCourtsoisonotoconfinedotootheo issueo ofo prerogativeo writso aso initiallyo understoodo ino England.o Theo proceduralo restrictionso whicho hado beeno imposedoonotheoCourtsoinoEnglandodoonotobindotheoHigho RAJ KUMAR ARORA Courtsoinothisocountry.oTheoHighoCourtsoareoempoweredotoo CWP-7599-2020o(O&M).oo -93-o o 2023:PHHC:133251o o o

issueonotoonlyowritsoinotheonatureoofocertiorari,omandamuso etc.obutoalsooordersoandodirectipnsotooenforceofundamentalo rightsooroforoanyootheropurpose.o

(iii)oTheopowerounderoArticleo226oofotheoConstitutionoisonoto confinedotootheoenforcementoofofundamentalorightsolikeotheo powerounderoArticleo32.oStillofurther,otheoHighoCourtsocano issueo writs,o ordersoorodirectionso evenotoo anyopersonooro authorityodischargingoaopublicodutyoforoenforcementoofotheo fundamentalorightsooroforoanyootheropurpose.o

(iv)oTheowordso"anyopersonooroauthority"ousedoinoArticleo 226odoo noto meano onlyo Stateo aso definedo inoArticleo 12ooro statutoryo authorities.o Theseo covero anyo persono oro bodyo performingoaopublicoduty.o

(v)oInoviewoofotheoimportanceoofo'health'otootheoCommunity,o institutionso providingo medicalo educationo formoao distincto class.o Theseo institutionso performo ao publico dutyo ando supplemento theo State'so effort.o Byo theiro affiliationo too ao Universityo oro anyo othero statutoryo examiningo body,o theyo becomeopartnersowithotheoState.oTheyoare,othus,osubjectotoo theorestrictionsocontainedoinoPartoIII.oTheyoareoboundotoo acto ino conformityo witho theo provisionso ofo theoIndiano Medicalo Councilo Act,o 1956o ando theo rules/regulationso framedo byo theo appropriateo University/body.o Whenevero theyo acto unfairly,o arbitrarilyo oro violateo theo prohibitionso containedoinoPartoIIIoofotheoConstitutionoorotheorulesoando regulationso framedo byo theo Universityo etc.,o theiro actionso canobeocorrectedobyoissueoofoaowritoofocertiorariooroanyo otheroappropriateowrit,odirectionooroorder.oSimilarly,oifoito iso foundo thato ano institutiono haso failedo too carryo outo ano obligationounderotheoConstitutionoorotheorules/regulationso framedobyoanoappropriateobody,oitocanobeocompelledotoo performoitsodutyobyotheoissueoofoaowritoofomandamus.oThiso principleoshall,ohowever,onotobeoattractedoinocaseoofoeveryo RAJ KUMAR ARORA privateoschooloorocollege.o CWP-7599-2020o(O&M).oo -94-o o 2023:PHHC:133251o o o

(vi)o Theo Fullo Bencho decisionso ofo thiso Courto inoPritamo Singhov.oStateoofoPunjab,o(1982)o2oServoLRo135o:o(AIRo 1982o Punjo &o Haro 228)o andoGurpreeto Singho Sindhuo v.o TheoPunjaboUniversity,oChandigarh,oAIRo1983oPunjo&o Haro70,odoonotocontainoaocorrectoenunciationoofolawoando areooverruled."o o

22.oInoFirozalioAbdulkarimoJivanioandoanotherov.oTheoUniono ofoIndiaoandoothers,oAIRo1992oBombayo179,oBombayoHigho CourtofollowingotheoprinciplesoenunciatedobyotheoApexoCourto ino Pragao Toolso Corporation'so caseo (supra)o heldo thato writo againstoprivateopersonounderoArticleo226oofotheoConstitutionoofo Indiaocanobeoissuedoforoenforcementoofodutiesoandoobligationso imposedouponothemobyostatute.oObservationsomadeoinoparao25o whichoareorelevant,oreadothus:-o o "25.o Weo needo noto goo intoo thiso questiono aso too whethero respondentoNo.o6oBankoisoao'State'owithinotheomeaningoofo Art.o12.oInotheopresentocase,owhatoisosoughtotoobeoenforcedo isotheostatutoryodutyoimposedouponorespondentoNo.o6oBanko andoitsoreturningoofficerorespondentoNo.o7obyovirtueoofotheo provisionsoofoS.o37.oItoisotrueothatotheoreturningoofficeroiso alsooaoprivateoindividual,obecauseoinotheoRulesoRegardingo Electingo Memberso ofo theo Boardoofo Directors,o framedobyo respondento No.o 6,o ao returningo officero iso requiredo too beo appointedobyotheoBoardoofoDirectors.oNevertheless,otheoActo castso certaino statutoryo dutieso ando obligationso ono ao returningoofficeroasowelloasoonorespondentoNo.o6.oForotheo enforcemento ofo theseo statutoryo dutieso ando obligations,o ao writowouldolie.oAsoobservedobyotheoSupremeoCourtoinotheo caseoofoPragaoToolsoCorpn.ov.oC.oV.oImanual,(supra)o-o o ".....Ito is,o however,o noto necessaryo thato theo persono oro theo RAJ KUMAR ARORA authorityoonowhomotheostatutoryodutyoisoimposedoneedobeoao CWP-7599-2020o(O&M).oo -95-o o 2023:PHHC:133251o o o

publico officialo oro ano officialo body.o Ao mandamuso cano beo issued,oforoinstance,otooanoofficialoofoaosocietyotoocompelo himotoocarryooutotheotermsoofotheostatuteounderoorobyowhicho theo societyo iso constitutedo oro governedo ando alsoo too companiesoorocorporationsotoocarryooutodutiesoplacedoono themobyotheostatutesoauthorisingotheiroundertakings....."o(p.o 1309).o Aowritois,otherefore,omaintainable."o o

23.oAoDivisionoBenchoofoDelhioHighoCourtoinoRahuloMehraov.oo UnionoofoIndia,o2004(114)oDLTo323oinotheolightoofojudgmentso ofotheoApexoCourtoinoAnadioMukta,oVSToIndustriesoLimitedoando FederaloBankoLimited'socaseso(supra),owhileoadjudicatingotheo issueowhetheroBoardoofoControloforoCricketoinoIndiao(BCCI)o waso amenableo too writo jurisdictiono underoArticleo 226oofo theo ConstitutionoofoIndia,ohadonoticedothatoHighoCourtocanoissueo writ,oorderoorodirectionotoo"anyoperson"oforoenforcementoofo anyofundamentalorightooro"foroanyootheropurpose"oevenowhereo theoStateomayonotobeodirectlyoinvolvedoinotheodisputeobutotheo issueoisoofoaopublicodutyooroperformanceoofopublicofunctionobyo aoprivateobody.oItowasoobservedoasounder:-o "7.o Theo coreo question,o therefore,o iso --o whethero BCCIo iso amenableotootheowritojurisdictionounderoarticleo226oofotheo ConstitutionoSub-articleo(1)othereoforeadsoasounder:-o "226.oPOWERoOFoHIGHoCOURTSoTOoISSUEoCERTAINo WRITS.o

(1)o Notwithstandingo anythingo inoarticleo 32,o everyo Higho Courto shallo haveo powers,o throughouto theo territorieso ino relationotoowhichoitoexercisesojurisdiction,otooissueotooanyo personooroauthority,oincludingoinoappropriateocases,oanyo Government,owithinothoseoterritoriesodirections,oordersooro writs,o includingo writso ino theo natureo ofo habeaso corpus,o mandamus,oprohibition,oquoo warrantooando certiorari,ooro CWP-7599-2020o(O&M).oo -96-o o 2023:PHHC:133251o o o

anyo ofo them,o foro theo enforcemento ofo anyo ofo theo rightso conferredobyoPartoIIIoandoforoanyootheropurpose.o o o xxxoxxxoxxxo o Aoplainoreadingowouldosuggestothatotheopowersoareoplenaryo andotheoHighoCourtocanoissueodirections,oordersoorowritsotoo "anyoperson"oforotheoenforcementoofoanyofundamentalorighto ando "foro anyo othero purpose".o However,o theseo wideo powerso haveo beeno regulatedo byo judicialo pronouncementso soo aso too avoidointerferenceoinomattersowhereoalternativeoremediesoareo availableo aso alsoo whereo theo disputeo iso purelyo ofo ao privateo natureohavingonoo"publicolaw"oelement.oTheotraditionaloviewo waso thato wherevero theo Stateo oro itso instrumentalityo waso involved,oitowasoregardedoasoanoissueowithinotheodomainoofo publicolaw.oLikewise,owhereoindividualsowereoatologgerheads,o theoremedyolayowithinotheoprecinctsoofoprivateolaw.oThisowaso alloveryowelloasolongoasogovernmentsostuckotoogovernanceoando privateopersonsoorobodiesoconfinedotheiroactivitiesotoopursuitso ofoaoprivateonature.oBut,owhenotheostateoenteredointootheofieldso ofocommerce,oindustryoandobusinessoandowhenoprivateobodieso tookoupopublicofunctionsoandoduties,othisodistinctionobetweeno publico lawo ando privateo lawo basedo ono theo publico oro privateo charactero ofo theo institutiono waso noo longero clear-cut.o Therefore,o ito waso noo longero safeo too relyo solelyo upono theo characteroofotheoinstitutionotoodecideowhetheroitowasoamenableo too writo jurisdictiono oro not.o Foro instance,o whereo thereo iso ao disputeoofoaopurelyocontractualonatureo(notobeingoaostatutoryo contract),o ito doeso noto mattero thato oneo ofo theo partieso iso theo "State"ooroao"statutoryobody"ooro"instrumentalityoofotheoState",o suchoaomatterofallsowithinotheoarenaoofoprivateolawoandojudicialo reviewo underoarticleo 226owouldo noto lie.o And,o theo converseo wouldobeoequallyotrue.oInootherowords,oaodisputeoinowhichotheo Stateoisonotodirectlyoinvolvedomayoyetobeoaopublicolawoissueoifoao RAJ KUMAR ARORA publico dutyo oro ao publico functiono iso performedo byo ao privateo CWP-7599-2020o(O&M).oo -97-o o 2023:PHHC:133251o o o

body.o8.oGovernmentsohaveoventuredointootheoprivateoarenao andoprivateobodies,olikewise,ohaveoundertakenopublicodutiesooro publico functions.o Thereo iso ao degreeo ofo overlapo ando theo distinctionoisonoolongeroclear-cutoorowatertight.oTheolawomusto beo aliveo too theseo dynamics.o Accordingly,o theo questiono ofo maintainabilityoofoaowritopetitionomustonotobeoaddressedofromo theostandpointoofoamenability.oEverybodyoisoamenableotootheo jurisdictionoofotheoHighoCourtsounderoarticleo226.oHowever,o Courtso haveo exercisedo restrainto ando theyo exerciseo theseo powersoonlyoinocasesowhichoinvolveopublicolaw.oTherefore,otheo "litmus"otestoforoinvokingotheowritojurisdictionoisowhetherotheo actocomplainedoofoisoinotheodischargeoofoaopublicodutyooroao publico function.o Ito matterso littleo aso too whoo dischargeso theo publicodutyooroperformsotheopublicofunction.oAndosootoo,otheo sourceo ofo theo powero too dischargeo oro performo sucho dutyo oro function.oWhetherotheopersonoisoempoweredobyostatuteoorosomeo governmentalo ordero oro whethero sucho persono arrogateso too himselfotheopowerotooperformoaopublicofunctionoorodischargeoao publico duty,o iso ofo noo consequence.o Whato iso too beo seeno iso whetherothereoisoanoinfractionoinotheodischargeoofosuchodutyooro function.oIfothereois,otheoHighoCourtohasopowerotoocorrectoitobyo issuingoanoorder,odirectionoorowritotooanyoperson.oFundingoiso alsoonotoanoissue.oAoprivatelyofundedoprivateoorganisationobuto dischargingo ao publico dutyo wouldo stillo beo withino theo "net"o ofoarticleo226."o

24.oSummarizingotheoconclusion,oitowasorecorded:-o o "17.oAtotheocostooforepetition,oweomayostateothatotheowholeo "amenability"o issueo iso misplaced.o Ao body,o publico oro private,o cannoto beo categorisedo aso "amenable"o oro "noto amenable"otoowritojurisdiction.oTheo"function"otestoisotheo correcto oneo too testo maintainability.o Ifo ao publico dutyo oro publico functiono isoinvolved,o anyo body,opublicooro private,o CWP-7599-2020o(O&M).oo -98-o o 2023:PHHC:133251o o o

quaothatodutyoorofunction,oandolimitedotoothat,owouldobeo subjecto too judicialo scrutinyo undero theo extraordinaryo writo jurisdictiono ofoarticleo 226.oTheo BCCIo whicho iso theo soleo repositoryoofoeverythingocricketoinoIndiaohasoattainedothiso "giant"ostatureothroughoitsoorganisation,oskill,otheocrazeoforo theogameoinoIndiaoandolastobutonototheoleastobyotheotacito approvaloofotheoGovernment.oItsoobjectsoareotheofunctionso andodutiesoitohasoarrogatedotooitself.oManyoofotheseoareoino theonatureoofopublicodutiesoandofunctions.oOthersomayobeoino theofieldoofoprivateolawosuchoasoprivateocontracts,ointernalo ruleso noto affectingo theo publico ato largeo etc.,.o Therefore,o BCCIo cannoto beo saido too beo beyondo theo sweepo ofoarticleo 226oinoalloeventualitiesoforoallotimesotoocome.oThatoisotheo certificateothatoBCCIowantsofromothisocourt.oWeoareoafraid,o weocannotograntothat.oConsequently,othisopetitionocannotobeo throwno outo ono theo maintainabilityo issue.o Thiso doeso noto necessarilyomeanothatotheopetitionersowouldobeoentitledotoo theo orders,o directionso oro writso thato theyo seek.o Thato willo haveotoobeoexaminedoonomerits."o

25.oTheolearnedocounseloforotheopetitionersohadoreliedouponotheo followingoobservationsoinoFederaloBank'socaseo(supra)owhereo theoHon'bleoApexoCourtohadobroadlyolaidodownotheofollowingo principlesorelatingotoomaintainabilityoofowritopetition:-o "Ao writo petitiono underoArticleo 226oofo theo Constitutiono ofo Indiao mayo beo maintainableo againsto (i)o theo Stateo Government;o(ii)oanoauthority;o(iii)oaostatutoryobody;o

(iv)o ano instrumentalityo oro agencyo ofo theo State;o (v)o ao companyowhichoisofinancedoandoownedobyotheoState;o

(vi)oaoprivateobodyorunosubstantiallyoonoStateofunding;o

(vii)oaoprivateobodyodischargingoaopublicodutyooropositiveo obligationoofoaopubliconature;oando(viii)oaopersonooroaobodyo undero ao liabilityo too dischargeo anyo functiono undero anyo statute,otoocompeloitotooperformosuchostatutoryofunction.oIto CWP-7599-2020o(O&M).oo -99-o o 2023:PHHC:133251o o o

isonoodoubtotrueothatoaomandamusocanobeoissuedotooanyo personooroauthorityoperformingopublicoduty,oowingopositiveo obligationotootheoaffectedoparty."o Itowasofurtheronoticedoasounder:-o "27.o Sucho privateo companieso wouldo normallyo noto beo amenableotootheowritojurisdictionounderoArticleo226oofotheo Constitution.oButoinocertainocircumstancesoaowritomayoissueo toosuchoprivateobodiesooropersonsoasothereomayobeostatuteso whichoneedotoobeocompliedowithobyoalloconcernedoincludingo theo privateo companies.o Foro example,o thereo areo certaino legislationsolikeotheoIndustrialoDisputesoAct,otheoMinimumo Wageso Act,o theoFactorieso Actooro foro maintainingo propero environmentosayoAiro(PreventionoandoControloofoPollution)o Act,o1981ooroWatero(PreventionoandoControloofoPollution)o Act,o1974oetc.oorostatutesoofotheolikeonatureowhichofasteno certaino dutieso ando responsibilitieso statutorilyo upono sucho privateobodiesowhichotheyoareoboundotoocomplyowith.oIfotheyo violateosuchoaostatutoryoprovisionoaowritowouldocertainlyobeo issuedoforocomplianceoofothoseoprovisions.oForoinstance,oifo ao privateo employero dispenseo witho theo serviceo ofo itsoemployeeoinoviolationoofotheoprovisionsocontainedoundero theoIndustrialoDisputesoAct,oinoinnumerableocasesotheoHigho Courtointerferedoandohaveoissuedotheowritotootheoprivateo bodiesoandotheocompaniesoinothatoregard.oButotheodifficultyo inoissuingoaowritomayoariseowhereothereomayonotobeoanyo non-complianceooroviolationoofoanyostatutoryoprovisionobyo theoprivateobody.oInothatoeventoaowritomayonotobeoissuedoato all.oOtheroremedies,oasomayobeoavailable,omayohaveotoobeo resortedoto."o o o o Xxxo xxxo xxxo

28.oFromotheoabove,oitoisoconcludedothatoordinarilyonoowrito RAJ KUMAR ARORA wouldolieoagainstoaoprivateoBank.oHowever,owhereotheoBankoiso CWP-7599-2020o(O&M).oo -100-oo 2023:PHHC:133251o o o

aoScheduledoBankounderoReserveoBankoofoIndiaoAct,o1934oando iso governedo byo theo provisionso ofoBankingo Regulationo Act,o 1949,oitoshallobeoamenableotoowritojurisdictionoofothisoCourto whereotheoScheduledoBankotakesorecourseotootheoprovisionso ofoSARFAESIoAct."o o o o o AsofaroasotheojudgmentoofotheoPatnaoHighoCourtoinotheomattero ofo Dhananjayo Setho Vs.o Theo Uniono ofo Indiao ando otherso (supra)o iso concerned,o theo Patnao Higho Courto dido noto dealo witho theo issueo ofo maintainabilityoofotheowritopetitionoagainstotheoprivateofinancerooroaoprivateo bankoandoproceededotooexamineotheoissueoonotheoprecedentothatotheobankso haveotakenorecourseotootheoseizingopossessionoofotheovehiclesowithoutotakingo recourseo too theo procedureo enshrinedo undero theo SARFAESIo Act.o Theo directionso issuedo onlyo reiterateo theo positiono ofo lawo thato ao forcibleo dispossessionocannotobeoundertakenobyotheobanks/financeocompanies.oo o o SoofaroasotheojudgmentoofothisoCourtoinotheomatteroofoTaruno BhargavaoVs.oStateoofoHaryanao(supra)oisoconcerned,otheosaidocriminalo misco petitiono hado beeno filedo foro seekingo quashingo ofo theo FIRo alreadyo registered.ooTheoissueoofomaintainabilityoofoaowritopetitionowasothusonoto beforeothisoCourtoandotheomatterowasobeingoexaminedoinotheocontextoasotoo whetheroaocriminalocaseocouldobeoregisteredoagainstotheobankingoinstitutionso whereo theyo haveo takeno lawo intoo theiro owno hands.o Theo Courto furthero observedothatoinotheoeventotheopetitioneromakesoaostatementobeforeotheotrialo Courtothatoheowilloproceedoforoenforcingohisorightothroughotheoprocessoofo law,otheocriminaloproceedingsomayobeodropped.oSimilarly,otheomatteroofo NarinderoKumaroSinglaoVs.oStateoofoPunjaboandoanother,o(supra)oalsoo CWP-7599-2020o(O&M).oo -101-oo 2023:PHHC:133251o o o

aroseoonoaccountooforegistrationoofotheocriminalocaseoandosoughtoquashingo ofotheoorderograntingoSuperdarioofotheotruckoinofavouroofotheorespondento No.2o i.e.o theo Financeo Company.o Theo judgmento ino theo mattero ofo M/so SundramoFinanceoLimited,oChennaioVs.oRajoKumaroandoanothero(supra),o alsooexaminedotheolegalityoofocriminaloproceedingsothatohadobeenoinstitutedo byowayoofoaocriminalocomplaintoNo.37oofo9.8.2004otitledo'RajoKumaroando otherso Vs.o Sundramo Financeo Limited'o beforeo theo Ilaqao Magistrateo ato Ludhianaoandotheoconsequentialosummoningoofotheopetitioneronoticingotheo allegationsoleveledoincludingotheoforcibleodispossessionoofotheovehicleoando theorequirementoofoaoprimaofacieocase,onooillegalityowasonoticedoinotheoordero ofo summoningo ando theo sameo waso affirmed.o Theo caseo ofo o M/so Punjabo Kashmiro Financeo Limitedo Vs.o Theo Stateo ofo Haryanao ando another,o (supra)oalsooaroseoasoaoresultooforegistrationoofoaocriminalocaseoandoseekingo quashingothereof.oo oo o Theoaboveosaidojudgmentsoareothusonotorenderedoinocontextotoo theo controversyo raisedo beforeo thiso Courto ando theo questiono aso regardso maintainabilityo waso neithero examinedo noro answered.o Similarly,o theo proceedingso beforeo theo Hon'bleo Keralao Higho Courto ino theo mattero ofo BhahuleyanoVs.oStateoofoKeralaoandoothers,o(supra)ooalsooaroseofromotheo criminaloproceedingsoandotheoorderooforeleaseoonosuperdariopassedoinofavouro ofo registeredo ownero i.e.o theo financer.o Theo arrangement/releaseo ofo theo vehicleoinofavouroofotheoregisteredoownerowasoupheldosubjectotoocertaino additionalodirectionsosooissued.oo o o Foroaojudgmentotoohaveoaoprecedentialovalueoonoaopointoofolaw,o theosameoisorequiredotoodecideotheoissue.oTheopositionoofolawobasedoonotheo CWP-7599-2020o(O&M).oo -102-oo 2023:PHHC:133251o o o

judicialo precedentso citedo byo theo petitionerso iso thato ao persono whoo iso ino possessionoofoaopropertyoeitheroasoaohireopurchaserooroasoaoloanocannotobeo divestedoorodispossessedoexceptoinoaomanneroknownotoolaw.o oo o Ito iso thuso evidento thato theo judgmentso reliedo upono byo theo petitionerso doo noto ipsoo factoo ruleo ono maintainabilityo ofo ao writo petitiono againstoaoPrivateoBankoand/oroNon-BankingoFinanceocompany.oRather,otheo judgmentso reliedo upono ariseo ono accounto ofo theo proceedingso fromo theo NationaloCommissions,oSARFAESIoActoorofromotheocriminaloproceedingso thatowereoinitiatedoconsequentouponorecovery.oWhileoexaminingotheosaido issue,otheorespectiveoCourtsorecordedoanoobservationoagainstouseoofomuscleo powerowhichowasoanoillegalomodeooforecoveryoofovehicle,oandoemphasisothato theorecoveryooughtotootakeoplaceoinoaomanneroknownotoolaw.oTheoCourtso thusorefrainedofromointerferingoinotheomattersowhereoforcibleopossessionohado beenotakenoandocriminaloproceedingsoinitiated.oTheomereofactothatotheoHigho Courtohadoentertainedoaowritopetitionoinotheointerestoofosubstantiveojusticeo cannoto ipsoo factoo beo construedo aso ano adjudicationo ono theo issueo ofo maintainabilityo byo impliedo interference.o Ao judgmento cano beo citedo aso ao precedentowhenoitolaysodownoaoratio.oWhenosuchoaoratiooisonotolaidodown,oito isoatobestoaodecisionoonotheolisotootheoextentoofoissuesobroughtobeforeoitoforo determination.oDrawingostrengthofromotheosaidoordersoandotooadvanceoano argumentoasoregardsotheomaintainability,odespiteosaidoissueohavingonotobeeno raised,oargued,oexaminedoorodecidedowouldobeoanoimproperowayooforeadingo theojudgments.oTheojudgmentoinotheomatteroofoM/soA-OneoMegaoMartoPvt.o LimitedoandoothersoVs.oHDFCoBankoandoanothero(supra)oreliedobyotheo petitionersoratheroreiteratesoaofindingoagainstotheopetitionersoinosoofaroasotheo CWP-7599-2020o(O&M).oo -103-oo 2023:PHHC:133251o o o

maintainabilityo ofo ao writo petitiono againsto ao privateo bankingo institutionso and/orootheoNBFCoisoconcerned.o o o ItoisofurtheroevidentothatotheoHon'bleoSupremeoCourtoinotheo matteroofoM/soMagmaoFincorpoLtd.oVs.oRajeshoKumaroTiwario(supra),o whileodealingowithotheojudgmentsoofoCiticorp.oMarutioFinanceoLtd.;otheo ControlleroandotheoAuditoroGeneraloofoIndiaoGianoParkashoVs.oK.S.o Jagannatho ando M/so Sundramo Financeo Limited,o Chennaio Vs.o Rajo Kumaroandoanother,oheldothatotheoaboveojudgmentsoareonotorenderedoino contextoofodeterminingoaorightoofotheofinancerotootakeopossessionoofotheo vehicleo ando rathero reliedo upono theo judgmento ino theo matterso ofo Anupo SarmahoVs.oBholaoNathoSharmaoandootherso(2013)o1oSCCo400;oOrixo AutooFinanceo(India)oLrdoVs.oJagmanderoSinghoandoanothero(2006)o2o SCCo598;oK.A.oMathaioaliasoBabuoandoanotheroVs.oKoraoBibbikuttyoando anothero(1996)o7oSCCo212;oandoaocatenaoofootherojudgmentsotooconcludeo thatotheofinancerowouldoremainoowneroofotheovehicleoandowhenopossessiono ofosuchovehicleoisotakenoonodefaultobyotheohireroinopaymentoofoinstallments,o thereowouldobeonoolegaloimpedimentoinodoingoso.oSuchoanoactocannotobeosaido too beo oneo ofo commissionoofo theft.o Ito waso furthero heldothato eveno aoloano transaction,o securedo byo righto ofo seizureo ofo ao financedo vehicle,o conferso licenceotootheoFinancierotooseizeotheovehicle.oItoisoalsoospecificallyoheldothato whethero theo serviceo ofo ao noticeo ono theo hirero wouldo beo necessaryo foro repossessiono ofo ao vehicleo wouldo beo determinedo upono theo termso ando conditionso ofo theo hireo purchaseo agreemento someo ofo whicho mayo stando modifiedobyotheocourseoofoconductoofotheoparties.oTheorequirementoofonoticeo wouldobeomandatoryoifosuchoaoconditionoisocontainedoinotheoagreementoando CWP-7599-2020o(O&M).oo -104-oo 2023:PHHC:133251o o o

implicitoifoitoisoreflectedofromotheocourseoofoconductoofotheoparties.oWhethero thereo iso breacho committedo byo theo borrowero ono theo conditionso ofo theo agreementoandoaoprovisionoisocontainedoforoimmediateorepossessionoofotheo vehicleowithoutofurtheronotice,osuchorepossessionowouldonotobeovitiatedoforo wantoofonotice.oConsideringothatotheoagreementothereinostipulatedoserviceoofo noticeoandothatosuchonoticeowasonotosentotootheocorrectoaddress,oNon-serviceo ofonoticeowouldotantamountotoobreachoofotermsoandoconditionsogivingoriseotoo claimoforodamages,obasedoonotheoassessmentoofotheolossocaused,obeforeotheo competentoForum.oOrdersoofoconsumeroCourtowereothusosetoaside,ohowever,o aodamageowasoawardedoforodeficiencyoinoserviceoinofailingotoogiveonoticeo beforeotakingorepossessionoofotheovehicle.oo o o InosoofaroasotheojudgmentoinotheocaseoofoFedraloBankoLtd.oVs.o SagaroThomasoandoothers,oreportedoaso2003o(10)oSCCo733oisoconcerned,o theosaidojudgmentoalsooruledothatotheocontroloofotheoReserveoBankoofoIndiao onotheoprivateobanksorunningocommercialoactivitiesoisoonlyoforosomeolimitedo purposesoandonotoinotheirointernalomanagement.oAowritopetitionoagainstoao privateobankowouldonotobeomaintainableoforosuchopurposesoandoisorestrictedo onlyowhereoaostatutoryoobligationoisosoughtotoobeoenforced.oSuchobanksoareo notoanoinstrumentalityooroagencyoofoStateonorotheoStateohasoitsofinancialooro administrativeo controlo overothem.o Referenceo mayo beo madeo too followingo extractoofotheosaidojudgment:-o CompaniesoActoforotheo"25.oAocompanyoregisteredounderotheo purposesoofocarryingoonoanyotradeoorobusinessoisoaoprivateo enterpriseotooearnolivelihoodoandotoomakeoprofitsooutoofosucho activities.o Bankingo iso alsoo ao kindo ofo professiono ando ao commercialoactivity,otheoprimaryomotiveobehindoitocanowellobeo CWP-7599-2020o(O&M).oo -105-oo 2023:PHHC:133251o o o

saidotooearnoreturnsoandoprofits.oSinceotimeoimmemorial,osucho activitiesohaveobeenocarriedoonobyoindividualsogenerally.oItoisoao privateo affairo ofo theo companyo thougho caseo ofo nationalizedo bankso standso ono ao differento footing.o Thereo may,o wello beo companies,o ino whicho majorityo ofo theo shareo capitalo mayo beo contributedo outo ofo theo Stateo fundso ando ino thato viewo ofo theo mattero thereo mayo beo moreo participationo oro dominanto participationo ofo theo Stateo ino managingo theo affairso ofo theo company.oButoinotheopresentocaseoweoareoconcernedowithoao bankingo companyo whicho haso itso owno resourceso too raiseo itso fundsowithoutoanyocontributionooroshareholdingobyotheoState.oIto hasoitsoownoBoardoofoDirectorsoelectedobyoitsoshareholders.oIto worksolikeoanyootheroprivateocompanyoinotheobankingobusinesso havingonoomonopolyostatusoatoall.Anyocompanyocarryingoono bankingo businesso witho ao capitalo ofo fiveo lacso willo becomeo ao scheduledo bank.o Allo theo same,o bankingo activityo aso ao wholeo carriedoonobyovariousobanksoundoubtedlyohasoanoimpactoando effectoonotheoeconomyoofotheocountryoinogeneral.oMoneyoofotheo shareholderso ando theo depositorso iso witho sucho companies,o carryingoonobankingoactivity.oTheobanksofinanceotheoborrowerso ono anyo giveno rateo ofo interesto ato ao particularo time.o Theyo advanceoloansoasoagainstosecurities.oTherefore,oitoisoobviouslyo necessaryotoohaveoregulatoryocheckooverosuchoactivitiesoinotheo interestoofotheocompanyoitself,otheoshareholders,otheodepositorso asowelloasotoomaintainotheoproperofinancialoequilibriumoofotheo nationaloeconomy.oTheoBankingocompaniesohaveonotobeenoseto upoforotheopurposesoofobuildingoeconomyoofotheoStateoonotheo othero hando sucho privateo companieso haveo beeno voluntarilyo establishedo foro theiro owno purposeso ando interesto buto theiro activitiesoareokeptounderocheckosoothatotheiroactivitiesomayonoto goo waywardo ando harmo theo economyo ino general.o Ao privateo bankingocompanyowithoallofreedomothatoitohas,ohasotooactoinoao mannerothatoitomayonotobeoinoconflictowithooroagainstotheofiscalo RAJ KUMAR ARORA policieso ofo theo Stateo ando foro sucho purposes,o guidelineso areo CWP-7599-2020o(O&M).oo -106-oo 2023:PHHC:133251o o o

providedo byo theo Reserveo Banko soo thato ao propero fiscalo discipline,otooconductoitsoaffairsoinocarryingoonoitsobusiness,oiso maintained.o Soo aso too ensureo adherenceo too sucho fiscalo discipline,oifoneedobe,oatotimesoevenotheomanagementoofotheo companyocanobeotakenoover.oNonetheless,oasoobservedoearlier,o theseoareoalloregulatoryomeasuresotookeepoaocheckoandoprovideo guidelineoandonotoaoparticipatoryodominanceoorocontroloovero theoaffairsoofotheocompany.oForootherocompaniesoinogeneralo carryingoonootherobusinessoactivitiesomayobeomanufacturing,o othero industrieso oro anyo business,o sucho checkso areo providedo undero theo provisionso ofo theoCompanieso Act,o aso indicatedo earlier.o Thereo also,o theo maino considerationo iso thato theo companyo itselfo mayo noto sinko becauseo ofo itso owno mismanagementoorotheointerestoofotheoshareholdersooropeopleo generallyo mayo noto beo jeopardizedo foro thato reason.o Besideso takingocareoofosuchointerestoasoindicatedoabove,othereoisonoo othero interesto ofo theo State,o too controlo theo affairso ando managementoofotheoprivateocompanies.oTheocareoisotakenoino regardo too theo industrieso coveredo undero theo Industrieso (DevelopmentoandoRegulation)oAct,o1951othatotheiroproductiono whichoisoimportantoforotheoeconomyomayonotogoodownoyetotheo businesso activityo iso carriedo ono byo sucho companieso oro corporationso whicho onlyo remainso ao privateo activityo ofo theo entrepreneurs/companies.oo

26.oSuchoprivateocompaniesowouldonormallyonotobeoamenableo tootheowritojurisdictionounderoArticleo226oofotheoConstitution.o Butoinocertainocircumstancesoaowritomayoissueotoosuchoprivateo bodiesooropersonsoasothereomayobeostatutesowhichoneedotoobeo compliedo witho byo allo concernedo includingo theo privateo companies.o Foro example,o thereo areo certaino legislationso likeo theoIndustrialo Disputeso Act,o theoMinimumo Wageso Act,o theoFactoriesoActooroforomaintainingoproperoenvironmentosayo Airo(PreventionoandoControloofoPollution)oAct,o1981ooroWatero CWP-7599-2020o(O&M).oo -107-oo 2023:PHHC:133251o o o

(Preventiono andoControlo ofo Pollution)o Act,o 1974o etc.o oro statuteso ofo theo likeo natureo whicho fasteno certaino dutieso ando responsibilitieso statutorilyo upono sucho privateo bodieso whicho theyoareoboundotoocomplyowith.oIfotheyoviolateosuchoaostatutoryo provisionoaowritowouldocertainlyobeoissuedoforocomplianceoofo thoseoprovisions.oForoinstance,oifoaoprivateoemployerodispenseo withotheoserviceoofoitsoemployeeoinoviolationoofotheoprovisionso containedounderotheoIndustrialoDisputesoAct,oinoinnumerableo casesotheoHighoCourtointerferedoandohaveoissuedotheowritotoo theoprivateobodiesoandotheocompaniesoinothatoregard.oButotheo difficultyoinoissuingoaowritomayoariseowhereothereomayonotobeo anyonon-complianceooroviolationoofoanyostatutoryoprovisionobyo theoprivateobody.oInothatoeventoaowritomayonotobeoissuedoatoall.o Otheroremedies,oasomayobeoavailable,omayohaveotoobeoresortedo to.oTheosixofactorsowhichohaveobeenoenumeratedoinotheocaseoofo AjayoHasiao(supra)oandoapprovedoinotheolaterodecisionsoinotheo caseoofoRamanao(supra)oandotheosevenoJudgesoBenchoinotheo caseoofoPradeepoKumaroBiswaso(supra)omayobeoappliedotootheo factsoofotheopresentocaseoandoseeoasotoothoseotestsoapplyotootheo appellantobankooronot.oAsoindicatedoearlier,oshareocapitaloofo theoappellantobankoisonotoheldoatoallobyotheogovernmentonoro anyofinancialoassistanceoisoprovidedobyotheoState,onothingotoo sayo whicho mayo meeto almosto theo entireo expenditureo ofo theo company.o Theo thirdo factoro iso alsoo noto answeredo sinceo theo appellantobankodoesonotoenjoyoanyomonopolyostatusonoroitocano beosaidotoobeoanoinstitutionohavingoStateoprotection.oSoofaro controlooverotheoaffairsoofotheoappellantobankoisoconcerned,o theyoareomanagedobyotheoBoardoofoDirectorsoelectedobyoitso shareholders.oNoogovernmentaloagencyooroofficeroisoconnectedo withotheoaffairsoofotheoappellantobankonoroanyoneoofothemoisoao memberoofotheoBoardoofoDirectors.oInotheonormalofunctioningo ofotheoprivateobankingocompanyothereoisonooparticipationooro interferenceoofotheoStateooroitsoauthorities.oTheostatutesohaveo RAJ KUMAR ARORA beeno framedo regulatingo theo financialo ando commercialo CWP-7599-2020o(O&M).oo -108-oo 2023:PHHC:133251o o o

activitiesosoothatofiscaloequilibriumomayobeokeptomaintainedo ando noto geto disturbedo byo theo mal-functioningo ofo sucho companiesooroinstitutionsoinvolvedoinotheobusinessoofobanking.o Theseo areo regulatoryo measureso foro theo purposeso ofo maintainingotheohealthyoeconomicoatmosphereoinotheocountry.o Suchoregulatoryomeasuresoareoprovidedoforootherocompanieso alsooasowelloasoindustriesomanufacturingogoodsoofoimportance.o Otherwiseotheseoareopurelyoprivateocommercialoactivities.oIto deservesotoobeonotedothatoitohardlyomakesoanyodifferenceothato sucho supervisoryo vigilanceo iso kepto byo theo Reserveo Banko ofo IndiaounderoaoStatuteoorotheoCentraloGovernment.oEvenoifoito waso witho theo Centralo Governmento ino placeo ofo theo Reserveo Banko ofo Indiao ito wouldo noto haveo madeo anyo difference,o therefore,o theo argumento basedo ono theo decisiono ofo Allo Indiao Banko Employees'o Associationo (supra)o doeso noto advanceo theo caseoofotheorespondent.oItoisoonlyoinocaseoofomal-functioningoofo theocompanyothatooccasionotooexerciseosuchopowersoarisesotoo protecto theo interesto ofo theo depositors,o shareholderso oro theo companyoitselfoorotoohelpotheocompanyotoobeooutoofotheowoods.o Inotheotimesoofonormalofunctioningosuchooccasionsodoonotoariseo excepto foro routineo inspectionso etc.o witho ao viewo too seeo thato thingsoareomovedosmoothlyoinokeepingowithofiscalopoliciesoino general.oo

27.oo Thereoareoaonumberoofosuchocompaniesocarryingoonotheo professionoofobanking.oThereoisonothingowhichocanobeosaidotoo beocloseotootheogovernmentalofunctions.oItoisoanooldoprofessiono inooneoformoorotheootherocarriedoonobyoindividualsoorobyoao groupoofothem.oLossesoincurredoinotheobusinessoareotheirsoaso welloasotheoprofits.oAnyobusinessoorocommercialoactivity,omayo beobanking,omanufacturingounitsoororelatedotooanyootherokindo ofo businesso generatingo resources,o employment,o productiono andoresultingoinocirculationoofomoneyoareonoodoubt,oareosucho whicho doo haveo impacto ono theo economyo ofo theo countryo ino CWP-7599-2020o(O&M).oo -109-oo 2023:PHHC:133251o o o

general.oButosuchoactivitiesocannotobeoclassifiedooneofallingoino theocategoryoofodischargingoduties,ofunctionsoofopubliconature.o Thuso theo caseo doeso noto fallo ino theo fiftho categoryo ofo caseso enumeratedoinotheocaseoofoAjayoHasiao(supra).oAgainoweofindo thatotheoactivityowhichoisocarriedoonobyotheoappellantoisonotooneo whichomayohaveobeenoearlierocarriedoonobyotheogovernmento ando transferredo too theo appellanto company.o Foro theo sakeo ofo argumentoevenoifoitomayobeoassumedothatooneoorotheootherotesto aso providedo ino theo caseo ofo Ajayo Hasiao (supra)o mayo beo attractedothatobyoitselfowouldonotobeosufficientotooholdothatoitoiso anoagencyoofotheoStateooroaocompanyocarryingoonotheofunctionso ofopubliconature.oInothisoconnection,oobservationsomadeoinotheo caseoofoPradeepoKumaroBiswaso(supra)oquotedoearlierowouldo alsoobeorelevant.oo

28.oWeomayonowoconsiderotheotwoodecisionsoi.e.oAndioMuktao (supra)oandotheoU.P.oStateoCo-operativeoLandoDevelopmento BankoLtd.(supra)uponowhichomuchorelianceohasobeenoplacedo onobehalfoofotheorespondentsotooshowothatoaowritowouldolieo againstotheoappellantocompany.oSoofarotheodecisionoinotheocaseo ofo U.P.o Stateo Co-operativeo Lando Developmento Banko Ltd.(supra)o iso concerned,o ito standso entirelyo ono ao differento footingoandoweohaveoelaboratelyodiscussedoitoearlier.oo

29.oTheootherocaseowhichohasobeenoheavilyoreliedouponoisoAndio Muktao(supra).oItoisonoodoubtoheldothatoaoMandamusocanobeo issuedo too anyo persono oro authorityo performingo publico duty,o owingo positiveo obligationo too theo affectedo party.o Theo writo petitionowasoheldotoobeomaintainableosinceotheoteacherowhoseo servicesowereoterminatedobyotheoinstitutionowasoaffiliatedotoo theouniversityoandowasogovernedobyotheoOrdinances,ocastingo certainoobligationsowhichoitoowedotoothatopetitioner.oButoitoiso noto theo caseo here.o Ouro attentiono haso beeno drawno byo theo learnedocounseloforotheoappellantotooparagraphso12,o13oando21o CWP-7599-2020o(O&M).oo -110-oo 2023:PHHC:133251o o o

ofotheodecisiono(AndioMukta)otooindicateothatoevenoaccordingo toothisocaseonoowritowouldolieoagainstotheoprivateobodyoexcepto whereoitohasosomeoobligationotoodischargeowhichoisostatutoryo oroofopublicocharacter.o

30.o Merelyo becauseo theo Reserveo Banko ofo Indiao layso theo bankingopolicyoinotheointerestoofotheobankingosystemooroinotheo interesto ofo monetaryo stabilityo oro soundo economico growtho havingodueoregardotootheointerestsoofotheodepositorsoetc.oaso providedounderoSectiono5(c)(a)oofotheoBankingoRegulationoActo doeso noto meano thato theo privateo companieso carryingo ono theo businessoofoorocommercialoactivityoofobanking,odischargeoanyo publico functiono oro publico duty.o Theseo areo allo regulatoryo measuresoapplicableotoothoseocarryingoonocommercialoactivityo inobankingoandotheseocompaniesoareotooactoaccordingotootheseo provisionso failingo whicho certaino consequenceso followo aso indicatedoinotheoActoitself.oProvisionoregardingoacquisitionoofo aobankingocompanyobyotheoGovernment,oitomayobeopointedoouto thatoanyoprivateopropertyocanobeoacquiredobyotheoGovernmento ino publico interest.o Ito iso nowo judiciallyo acceptedo normo thato privateointeresto hasotoo giveo wayotootheopublico interest.o Ifoao privateo propertyo iso acquiredo ino publico interesto ito doeso noto meanothatotheopartyowhoseopropertyoisoacquiredoisoperformingo oro dischargingo anyo functiono oro dutyo ofo publico charactero thoughoitowouldobeosooforoacquiringoauthority.oo 31o Forotheodiscussionoheldoabove,oinoouroview,oaoprivateo companyocarryingoonobankingobusinessoasoaoscheduledobank,o cannotobeotermedoasoanoinstitutionoorocompanyocarryingoono anyostatutoryooropublicoduty.oAoprivateobodyooroaopersonomayo beoamenableotoowritojurisdictionoonlyowhereoitomayobecomeo necessaryotoocompelosuchobodyooroassociationotooenforceoanyo statutoryo obligationso oro sucho obligationso ofo publico natureo castingo positiveo obligationo upono it.o Weo don'to findo sucho CWP-7599-2020o(O&M).oo -111-oo 2023:PHHC:133251o o o

conditionso areo fulfilledo ino respecto ofo ao privateo companyo carryingo ono ao commercialo activityo ofo banking.o Merelyo regulatoryoprovisionsotooensureosuchoactivityocarriedoonobyo privateo bodieso worko withino ao discipline,o doo noto confero anyo suchostatusouponotheocompanyonoroputsoanyosuchoobligationo upono ito whicho mayo beo enforcedo througho issueo ofo ao writo underoArticleo 226oofo theo Constitution.o Presento iso ao caseo ofo disciplinaryoactionobeingotakenoagainstoitsoemployeeobyotheo appellanto Bank.o Respondent'so serviceo witho theo banko standso terminated.o Theo actiono ofo theo Banko waso challengedo byo theo respondentobyofilingoaowritopetitionounderoArticleo226oofotheo ConstitutionoofoIndia.oTheorespondentoisonototryingotooenforceo anyostatutoryodutyoonotheopartoofotheoBank.oThatobeingotheo position,otheoappealodeservesotoobeoallowed.o Ino theo result,o theo appealo iso allowedo ando theo judgmento ando ordero passedo byo theo Higho Courto iso seto asideo ando theo writo petitionoisoheldotoobeonotomaintainable.oThereowill,ohowever,o beonooorderoasotoocosts."oo o o o o Hence,otheoissueohasobeenodecidedoinotheoaffirmativeothatoao writoagainstoaonon-publicofunctionoorodutyodischargedobyoaoPrivateoentityo wouldonotobeomaintainableomerelyobecauseotheoReserveoBankoofoIndiaolayso downocertainoguidelinesoinotheointerestoofomonetaryostability.oTheoprivateo banks/companiesocarryingoonobusinessoofocommercialoactivityoofobankingo doonotonecessarilyodischargeoanyopublicofunctionooropublicoduties.oLayingo downo ofo regulatoryo measureso foro regulatingo theo commercialo activityo ino bankingowouldoentailoremediesothroughoordinaryoprivateolaworemedyoando notothroughotheopublicolawopetitions.oTheofunctionalityotestowasoalsooreliedo uponoinotheomatteroofoPragaoToolsoCorporationo(supra)oandoRamesho CWP-7599-2020o(O&M).oo -112-oo 2023:PHHC:133251o o o

Ahluwaliao (supra)o aso wello aso ino theo mattero ofo Phoenixo ARCo Privateo LimitedoVs.oVishwaoBharatioVidyaoMandiroandootherso(supra).oEveno thoughotheoissueoinvariablyoinotheoaboveosaidowritopetitionsowasoalsooino relationotooSARFAESIoAct,o2002,otheoHon'bleoSupremeoCourtoexaminedo theoissueoofomaintainabilityoofoaowritopetitionoinomattersoandoitowasoheldothato ao writopetitiono wouldo noto beoavailableotoo aodefaulteroasotheo Assetsoando Reconstructiono Companyo couldo noto beo construedo aso too performo publico functionsoexpectedotoobeoperformedobyotheoStateoAuthorities.oo o o AoDivisionoBenchoofothisoCourtohasoalreadyoinotheomatteroofo M/soFerminaoDevelopersoLtd.o(supra)oheldoagainstomaintainabilityoofoao writopetitionoagainstotheonon-bankingofinanceocompaniesoandoitowasoheldo thatonon-bankingofinanceocompaniesoareoengagedoinoaocommercialoactivityo witho theo primaryo objecto too earno returno ando profitso byo usingo itso owno resourcesotooraiseofunds.oSuchoNBFCsohadonotobeenosetoupoforotheopurposeso ofobuildingoeconomyoofotheoStateobutowereovoluntarilyoestablishedoforotheiro owno purposeso ando commercialo interests.o Theo respondent-NBFCo iso obligatedonototooactoinoconflictowithooroagainstotheofiscalopoliciesoofotheo Stateo foro maintainingo ao fiscalo discipline,o however,o theo sameo wouldo noto cloako theo privateo non-bankingo financeo companieso aso dischargingo publico functions.oo oo Similarly,otheoDivisionoBenchoofotheoAllahabadoHighoCourtoino theo matteroofo Dharmendrao Kumaro Yadavo Vs.o Managero Commercialo AutosoSaleso(Pvt.)oLtd.oAllahabad,o(supra)ohadoalsooheldothatowhereotheo consumero approacheso theo Courto levelingo allegationso ofo forcibleo repossession,otheopersonoaggrievedoisoentitledotootakeorecourseotoocriminalo CWP-7599-2020o(O&M).oo -113-oo 2023:PHHC:133251o o o

orociviloactionoasoisopermissibleounderolawoagainstotheobankoandothatoaowrito petitionowouldonotobeomaintainableoasotheomeansoofoseekingorestorationoofo theopossession.oTheoviewoagainstomaintainabilityoofotheowritopetitionowaso furthero acceptedo byo ao Divisiono Bencho ofo thiso Courto ino theo mattero ofo HarinderoFabricsoVs.oShriramoCityoUnionoFinanceoLtd,o(supra).oo o o Further,oaoDivisionoBenchoofoHon'bleoOrissaoHighoCourtoinotheo mattero ofo Anirudho Sahooo Vs.o Commissioner,o Stateo Transporto Authority,oOrissaoandoothersoreportedo2010o(110)oCutLTo92,oagainoheldo thatorespondentoNo.3owhichoisoMagmaoShrachioFinanceoLimitedoisoaoprivateo companyoandoremedyoforobreachoifoanyoofoanoagreementohasotoobeoavailedo byo resortingo too appropriateo proceedingso foro resolutiono ofo civilo dispute.oo Theoaboveosaidojudgmentoexaminedotheoscopeoofoactionoagainstobreachoofo obligationsobyoprivateoentities.oSignificantly,oallotheoaforesaidojudgmentso haveoruleoagainstotheomaintainabilityoofotheowritopetition.oTheojudgmentso reliedouponobyotheopetitioners,ohowever,oareonotoexactlyoonotheoquestionoofo maintainabilityoofoaowritopetitions.oResultantly,otheosaidojudgmentsohaveonoo bindingoprecedentialovalueoinosoofaroasotheoissueoofomaintainabilityoofoaowrito petitionoagainstoNBFCsoisoconcerned.oo o o Theoissueoinoquestionowasofurtherounderoconsiderationobeforeo theoHon'bleoSupremeoCourtoinotheomatteroofoSLPo(Civil)oNos.22021-22022o ofo 2022o titledo aso M/so Southo Indiano Banko Limitedo ando otherso Vs.o Naveeno Mathewo Philipo ando anothero decidedo video judgmento datedo

17.04.2023,owhereinotheoHon'bleoSupremeoCourtoobservedothatotheoHigho Courts'o oughto noto too exerciseo jurisdictiono undero Articleo 226o ofo theo Constitutionoofo Indiao whereo othero efficaciouso remedieso areo available.o Ao CWP-7599-2020o(O&M).oo -114-oo 2023:PHHC:133251o o o

remedyoofoaowritoisonotoexpectedotoobeoaopanaceaoagainstoalloviolations.oIto comeso intoo operationo onlyo wheno ao Stateo Agencyo againsto whicho theo allegationsoareobeingoleveledodoesonotocomeotooitsorescue.oIssuanceoofotheo prerogativeowritoofomandamusoinotheoabsenceoofoanyoestablishedolegalorighto cannotolayofoundationoforoexercisingoofotheopower.oAogreaterointrospectiono isorequiredoinoaofinancialotransaction,omoreoparticularlyowhenooneoofotheo partiesodoesonotocomeounderotheopurviewoofoArticleo226oofotheoConstitutiono ofoIndia.oTheoattemptoofotheoCourtowhileoexercisingoitsopoweroofojudicialo reviewoshouldonotobeoanoattemptoofocircumventingotheodueoprocessoofolawo andotoouseotheoextraoordinaryoconstitutionaloremedyoasotheoprimaryoandotheo onlyoremedy.o o oo oo Advertingotootheosubmissionsoofotheopetitionersopertainingotoo hardshipsofacedobyothemoonoaccountoofotheoArbitrationoClauseoandotheiro inabilityotoopursueotheosame,oitoisoobservedothatoarbitrationoawardsohaveo beenopassedoinoaonumberoofocasesoandothatoevenotheonoticesohadobeenosento preoandopostorecoveryoandoevenobeforeocarryingooutotheoauctionoproceedingso ofotheorepossessedovehicle.oHowever,otheoborrowersopreferredotoowaitoforo theoentireodurationowhenosuchoproceedingsowereobeingoinitiated.oThereoisonoo satisfactoryoexplanationoasotoowhyotheoborrowerochoseonototootakeorecourseo tootheoremediesoavailableoinolawoandoasoagreedotoobetweenotheopartiesoundero theocontract.oHavingooptedonototoopursueotheoremediesoorofileoobjectionso againstotheosameodespiteohavingobeenoagreedoupon,otheoborrowerocannotobeo givenoaopremiumotooviolateotheoagreedotermsoandoconditionsoonoaopleaoofo hardshiporaisedoatothisostageoespeciallyowhenotheoagreementsohaveoremainedo inoforceoforovariedodurations.oTheoparties'oautonomyohasobeenotheohallmarko CWP-7599-2020o(O&M).oo -115-oo 2023:PHHC:133251o o o

ofocontractualorelationshipoamongstotheopartiesowhichohaveoagreedotootheo Forumoofoarbitrationoforosettlementoofodisputes.oSoofaroasoanyoapprehensionso withorespectotootheofairnessoandoimpartialityoofoanoarbitratoroisoconcerned,o adequateo safeguardso haveo beeno prescribedo undero theo Arbitrationo ando ConciliationoAct,o1996oasoamended.oHence,oanyoapprehensiononourishedobyo ao borrowero ando whichoisonotoborneooutoofotheo relationshipo betweenotheo borrowero ando theo lendero cannoto beo theo soleo groundo too impeacho theo impartialityoandointegrityoofoanoarbitratorooroanyootheroalternativeoforumoaso mayohaveobeenoagreedouponobetweenotheoparties.oAnyosuchoapprehensionoiso thenorequiredotoobeoaddressedoasoperotheomechanismoenshrinedounderotheo Statute.oTheowritojurisdictionounderoArticleo226oofotheoConstitutionoofoIndiao cannotobeodevisedoasoaoprimaryomechanismooroasoaomeansotoobye-passotheo contractualoobligationsoorostatute.oo o o Itoisoalsooevidentothatoevenothoughotheowritopetitionsoareobeingo filedoallegingonon-complianceoofoRBIoguidelinesotheyoessentiallyoremaino directedo againsto Privateo Banks/NBFCo ando moreo ino theo natureo ofo mandatory/prohibitoryoinjunction.o oo Theoundisputedofactsowhichohaveoemergedofromoaoperusaloofo theopresentowritopetitionsoareoasounder:-o

(1)ktheo lendero companieso areo knowno aso non-bankingo companies/privateosectorofinancialoinstitutions;o

(2)kothato theo borrowerso areo undisputedlyo ino defaulto ofo theo installments/overdueointerest/penalochargesoinodefault/delayedo paymentoofoinstallmentsoetc.;o CWP-7599-2020o(O&M).oo -116-oo 2023:PHHC:133251o o o

(3)kTheo re-possessiono ofo theo vehicleo haso beeno beyondo theo territorialojurisdictionoofothisoCourtoinoaolargeonumberoofocases;o

(4)kThereo iso noo contemporaneouso evidenceo too establisho thato repossessionoofotheovehicleowasobyoanyoillegalomeansoorobyo exerciseo ofo undueo forceo oro byo wayo ofo commissiono ofo anyo criminalooffenceootherothanoaoself-servingostatementowhichoiso notocorroboratedobyoanyocontemporaneousoevidence.oo

(5)kThatoasoisoevidentofromotheoillustrativeotableoextractedoabove,o thereo haveo beeno awards;o orderso byo theo civilo Courts;o orderso underoSectionso9ooro17oofotheoArbitrationoandoConciliationoAct,o 1996oasowelloasopreoandopostorepossessiononoticesoincludingo noticesobyotheosaleoofotheorecoveredosecurityointerestotootheo borrower.oEvenothoughothereoisoaodenialobyotheoborroweroofo receiptoofoanyosuchonotices,ohowever,oaodispatchoatotheoaddresso givenobyotheoborrowerohimselfoisoprimaofacieoreflectiveoofodueo intimation.oHowever,osuchoaspectoisorequiredotoobeoestablishedo byotheoprivateopartyoassertingoabsenceoofointimation.oo

(6)kThatoinovariousosuchocases,otheoarbitratorohasopassedoanoawardo oroisoatoadvanceostageoofotheoarbitrationoproceedingsoandotheo borrowero haso choseno noto too participateo ino theo arbitrationo proceedingsoorofailedotoochallengeotheosame.oo

(7)kHavingooptedotooaodisputeoresolutionomechanismoofoarbitration,o theoborrowerohadoanoappropriateoremedyobeforeotheocompetento authorityo foro seekingo redressalo ofo hiso grievances.o Havingo choseno noto too pursueo hiso remedieso aso pero theo Statute,o theo CWP-7599-2020o(O&M).oo -117-oo 2023:PHHC:133251o o o

borrowero cannoto opto too wriggleo outo ofo hiso contractualo obligationsobyoallegingotheoconditionsotoobeoonerousooronotoino favouroofotheoborroweroasoaovalidoexcuse.oo

(8)kAowritojurisdictionowouldonotoordinarilyobeoextendedounlesso thereoisoaoglaringoviolationoofotheolawoororightsoofoanoindividualo byoanoagencyodischargingopublicofunctionsooropublicoduty.oo

(9)kThereo cano beo noo presumptiono thato theo alternativeo disputeo redressalo mechanismo providedo undero theo commono lawo foro redressaloofogrievances,oareonon-effectiveooroexpeditious.oSucho ao presumptiono iso likelyo too defeato theo entireo hierarchyo ofo judicialo systemo ando too depleteo theo objectiveo ofo providingo expeditiousoandocostoeffectiveoremedyoatodoorstep.oTheosameo mayoalsoorenderoaogullibleoborrowerotoopartoawayowithohisohardo earnedo moneyo ando alsoo loseo valuableo timeo ino pursuingo ao remedyowhichoisoordinarilyonototheoappropriateoremedy.oTheo perceptiono ofo ao writo courto beingo theo soleo panaceao foro allo agenciesocannotobeotheogroundotoobye-passotheocommonolawo remediesoprovidedothroughovariousoregulatoryochannels.oo o o o o Foro theo foregoingo reasonso ando ino viewo ofo theo judicialo precedentso ofo theo Hon'bleo Supremeo Courto aso wello aso ofo theo Hon'bleo Divisiono ofo thiso Courto aso regardso theo non-maintainabilityo ofo theo writo petitionoagainstoprivateoinstitutions/non-bankingofinanceocompanies,oIoamo ofotheoopinionothatotheopresentowritopetitionsoseekingoissuanceoofowritoofo mandamusorestrainingotheorespondentoPrivateoBanks/NBFCofromoseekingo CWP-7599-2020o(O&M).oo -118-oo 2023:PHHC:133251o o o

repossessionoofotheovehicleoandotooseekorestorationoofotheopossessionoofotheo vehiclesoareonotomaintainable.oo oo Whileoupholdingotheorightoofotheofinancialoinstitutionsotooseeko repossessionoofotheosecurityointerestoinotermsoofotheocontract,oitoisoincumbento thatoasoperotheolawolaidodownobyotheoHon'bleoSupremeoCourtoasowelloasothiso Courtoinojudicialoprecedents,osuchorepossessionoisotoobeodoneoinotheomannero knownotoolaw.oHowever,otheoaboveosaidoconceptoofo"manneroknownotoolaw"o cannoto beo assignedo ao meaningo aso wouldo rendero recoveryo ofo theo loans/advanceo impermissible.o Theo recourseo too theo processo agreedo upono betweenotheopartiesoatotheotimeoofosigningoofocontractowouldobeodeemedotoo beoaosufficientocompliance.oInotheoeventosuchocomplianceoisoestablished,otheo consequentoactionowouldonotoexofacieobeoillegal.ooo o ooo Theopresentowritopetitionsoareohenceonotomaintainableoforotheo aboveosaidoreasonsoandotheosameoareoaccordinglyodisposedoof.oCOCP-1114-2020oandoCOCP-1116-2020oareoaccordinglyodismissed.oo oo Sinceo thiso Courto haso disposedo ofo theseo petitionso ono theo issue/aspectoofomaintainability,oitowouldonotobeoappropriateoforothisoCourtotoo commentoonotheoindividualomeritsoofoeachocaseolestoitoshouldoprejudiceotheo rightsoofotheorespectiveopartiesoinotheoeventoofotheiropursuingoalternativeo remedies.oTheopartiesomayoifosooadvisedopursueotheiroalternativeoremedieso asoperolawoforoseekingoredressaloofotheirogrievances.oo oo Theo periodo duringo whicho theo presento writo petitionso haveo remainedopendingobeforeothisoCourtoshallobeotakenointooconsiderationobyotheo forumowhichotheopetitioner(s)omayooptoforoseekingoredressaloofohis/theiro CWP-7599-2020o(O&M).oo -119-oo 2023:PHHC:133251o o o

oo Anyointerimoprotectionothatomayohaveobeenograntedobyothiso Courto video interimo orderso shallo enureo ino favouro ofo theo respectiveo petitioner(s)oforoaoperiodoofooneomonthofromotheoreceiptoofoaocertifiedocopyo ofothisoorderotooenableotheopetitionerotooapproachotheocompetentoforumoforo redressaloofohisogrievance.oo o Pendingomisc.oapplication(s),oifoany,oinotheopresentobatchoofo writopetitionsoshalloalsoostand(s)odisposedoofoaccordingly.ooo o Ao photocopyo ofo theo ordero beo placedo ono theo fileo ofo eacho connectedocase.oo o Octobero06,o2023o o o oooooooooo(VINODoS.oBHARDWAJ)o rajoarorao o o o oooooo o ooooooJUDGEo o o o Whetherospeaking/reasonedoo :oYes/Noo Whetheroreportableoo o :oYes/Noo