Dismissed

M/S Kosi Road Lines v. Hindujja Leyland Finance Company

Allahabad HC13 Jan 2021WRIC/23719/2020

Case brief

AI extract

What is this about?

The court dismissed a writ petition filed by a petitioner challenging recovery notices and seeking release of seized vehicles after loan default. Relying on Federal Bank, the court held that the private respondent is not a 'State' under Article 12, making the petition non-maintainable.

What did the court decide?

The writ petition was dismissed on the ground of non-maintainability as the respondent is not a 'State' under Article 12.

M/S Kosi Road Lines Vs Hindujja… — Constitutional and Fundamental Rights | Allahabad HC (2021)

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Court No. - 39 Case :- WRIT - C No. - 23719 of 2020 Petitioner :- M/S Kosi Road Lines Respondent :- Hindujja Leyland Finance Company Counsel for Petitioner :- Sunil Kumar Singh

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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 and learned counsel for the respondent.

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The instant petition has been filed seeking following reliefs :

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"(i) Issue a writ, order or direction in the nature of certiorari quashing the impugned recovery notices dated NIL (Annexure Nos. 2, 3 and 4 to the writ petition);

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(ii) Issue a writ, order or direction in the nature of Mandamus directing the respondent company to release the vehicles of petitioner's firm forthwith bearing Vehicle No.UP-85AT-3122, UP85Z-9363 and UP-85AB-9167,

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(iii) Issue a writ, order or direction in the nature of Mandamus directing the respondent company to pay compensation occurred from the date of taken away the vehicles up till now."

¶8

The petitioner had taken loan for three vehicles after being financed by respondent Hindujja Leyland Finance Company which is a private institution. It is an admitted case of the petitioner that an agreement was executed between the petitioner and the respondent company. The petitioner defaulted in payment of installments and as such vehicles were seized by the respondent. The respondent is a private financial company and not an instrumentality of the 'State' under Article 12 of the Constitution of India hence, the writ petition is not maintainable to enforce a contract between two private entities nor can direction be issued for quashing the consequential proceeding in exercise of writ jurisdiction in the facts of the present case.

¶9

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 any financial assistance is provided by the State, nothing to say which may meet almost the entire expenditure of the company. The third factor is also not answered since the appellant bank does not enjoy any monopoly status nor it can be said to be an institution having State protection.

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

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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, are such which do have impact on the economy of the country in general. But such activities cannot be classified one falling in the category of discharging duties, functions of a public nature. Thus the case does not fall in the fifth category of cases enumerated in the case of Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722 . Again we find that the activity which is carried on by the appellant is not one which may have been earlier carried on by the Government and transferred to the appellant company."

¶13

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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Hence, in view of the settled principle of law the present writ petition is not maintainable. That apart, since disputed question of facts are involved, we decline to exercise our extraordinary jurisdiction under Article 226 of the Constitution of India on this ground also.

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Accordingly, the writ petition is hereby dismissed . Order Date :- 13.1.2021 VR/

M/S Kosi Road Lines v. Hindujja Leyland Finance Company

Case brief

What is this about?

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M/S Kosi Road Lines v. Hindujja Leyland Finance Company

Case brief

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