Dismissed

Ravi Singh v. State of U.P. and 3 Others

Allahabad HC4 Jan 2021WRIC/20867/2020

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition filed by a borrower seeking to quash a notice and restrain recovery proceedings initiated by H.D.B. Financial Service Limited. The Court held that the private bank is not an instrumentality of the State under Article 12, making the writ petition non-maintainable. The dispute between private parties cannot be adjudicated via writ jurisdiction. (Patna High Co

What did the court decide?

Writ petition dismissed for want of maintainability as the respondent is a private bank, not a State agency.

Ravi Singh Vs State of U.P. and 3 Others — Service and Employment | Allahabad HC (2021)

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Court No. - 39

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Case :- WRIT - C No. - 20867 of 2020

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Petitioner :- Ravi Singh Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Vinod Kumar Shukla,Akansha Shukla Counsel for Respondent :- C.S.C.

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Hon'ble Naheed Ara Moonis,J. Hon'ble Dinesh Pathak,J.

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Heard learned counsel for the petitioner, the learned Standing counsel for the respondent nos. 1, 2 and 3.

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The instant writ petition has been filed seeking following relief:

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"(i) Issue a writ order or direction in the nature of certiorari quashing the notice dated 22.09.2020 issued by respondent no. 4.

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(ii) Issue a writ order or direction in the nature of mandamus directing the respondent authorities to restrain the recovery proceeding initiated against the petitioner.

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(iii) Issue a writ order or direction in the nature of mandamus directing the respondent no. 4 to pay the amount of the petitioner in easy instalment.

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(iv) Award the cost of this petition in favour of the petitioner."

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The petitioner had taken a vehicle after being financed by H.D.B. Financial Service Limited, which is a private bank. It is an admitted case of the petitioner that an agreement was executed between the petitioner and the bank. The petitioner defaulted in payment of instalments and as such the vehicle has been seized by the bank.

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The respondent no. 4 is a private bank and not an instrumentality of the State within the meaning of Article 12 of the Constitution of India. The dispute evidently is between two private parties, namely, the petitioner, who is the borrower, and the respondent no. 4, who is the Bank. The writ petition is not maintainable to enforce a contract between two private entities nor can any direction be issued for quashing the consequential proceedings as well as order dated 22.09.2020 passed by the respondent no. 4, in exercise of writ jurisdiction in the facts of the present case.

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In the case of Federal Bank Ltd. v. Sagar Thomas and others, (2003) 10 SCC 733 : AIR 2003 SC 4325, the Hon'ble Supreme Court has held as under:

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"28. ...As indicated earlier, share capital of the appellant bank is not held at all by the Government nor is any financial assistance provided by the State, nothing to say which may meet almost the entire expenditure of the company. The third factor is also not answered

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since the appellant bank does not enjoy any monopoly status nor can it be said to be an institution having State protection. So far as control over the affairs of the appellant bank is concerned, they are managed by the Board of Directors elected by its shareholders. No governmental agency or officer is connected with the affairs of the appellant bank nor is anyone of them a member of the Board of Directors. In the normal functioning of the private banking company there is no participation or interference of the State or its authorities. The statutes have been framed regulating the financial and commercial activities so that fiscal equilibrium may be kept maintained and not get disturbed by the malfunctioning of such companies or institutions involved in the business of banking. These are regulatory measures for the purposes of maintaining a healthy economic atmosphere in the country.

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29. ..... Any business or commercial activity, may be banking, manufacturing units or related to any other kind of business generating resources, employment, production and resulting in circulation of money are no doubt, such which do have impact on the economy of the country in general. But such activities cannot be classified as one falling in the category of discharging duties or functions of a public nature. Thus the case does not fall in the fifth category of cases enumerated in the case of Ajay Hasia [Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722]. Again we find that the activity which is carried on by the appellant is not one which may have been earlier carried on by the Government and transferred to the appellant company."

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Following the law laid down by the Hon'ble Supreme Court in the above decision that the private financial institutions, carrying of business or commercial activity, may be performing public duties, but cannot be considered to be covered under the definition of "State" under Article 12 of the Constitution of India, the writ petition against such entity is not maintainable before the High Court.

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Accordingly, the writ petition is hereby dismissed.

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Order Date :- 4.1.2021 Shahnawaz

Ravi Singh v. State of U.P. and 3 Others

Case brief

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Ravi Singh v. State of U.P. and 3 Others

Case brief

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