Court dismissed a writ petition challenging a private bank's refusal to release a truck and issue a fresh bank statement, holding that the private bank is not a State entity under Article 12 and the petition was not maintainable.
The writ petition was dismissed as not maintainable against a private financial institution.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Court No. - 39
Case :- WRIT - C No. - 24077 of 2020
Petitioner :- Rakesh Yadav Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Ram Janam Singh Counsel for Respondent :- C.S.C.
Hon'ble Naheed Ara Moonis,J. Hon'ble Dinesh Pathak,J.
Heard learned counsel for the petitioner and learned Standing Counsel for the State-respondent nos.1 and 2.
The instant petition has been filed seeking following reliefs:
"(i) Issue a writ, order or direction in the nature of mandamus commanding the respondent Bank to release the Truck No.UP 71 AT/1746 Tata 3718 to the petitioner accordance with law.
(ii) Issue a writ, order or direction in the nature of mandamus directing the respondent Bank to issue a fresh Bank statement to the petitioner after deducting deposited amount.
(iii) Issue a writ, order or direction in the nature of mandamus directing the respondents to consider and decide the representation dated 21.8.2020 of the petitioner accordance with law.”
It appears that respondent no.3 i.e. Indusland Bank is a private financial institution and not an instrumentality of the 'State' under Article 12 of the Constitution of India. The writ petition is not maintainable to enforce a contract between two entities.
In the case of Federal Bank Ltd. v. Sagar Thomas and others, (2003) 10 SCC 733 : AIR 2003 SC 4325 , the Hon'ble Supreme Court has held as under:
"28. ...As indicated earlier, share capital of the appellant bank is not held at all by the Government nor any financial assistance is provided by the State, nothing to say which may meet almost the entire expenditure of the company. The third factor is also not answered since the appellant bank does not enjoy any monopoly status nor it can be said to be an institution having State protection. So far as control over the affairs of the appellant bank is concerned, they are managed by the Board of Directors elected by its shareholders. No
governmental agency or officer is connected with the affairs of the appellant bank nor is anyone of them is a member of the Board of Directors. In the normal functioning of the private banking company there is no participation or interference of the State or its authorities. The statutes have been framed regulating the financial and commercial activities so that fiscal equilibrium may be kept maintained and not get disturbed by the mal-functioning of such companies or institutions involved in the business of banking. These are regulatory measures for the purposes of maintaining the healthy economic atmosphere in the country.
29. ..... Any business or commercial activity, may be banking, manufacturing units or related to any other kind of business generating resources, employment, production and resulting in circulation of money are no doubt, are such which do have impact on the economy of the country in general. But such activities cannot be classified one falling in the category of discharging duties, functions of a public nature. Thus the case does not fall in the fifth category of cases enumerated in the case of Ajay Hasiav. Khalid Mujib Sehravardi, (1981) 1 SCC 722. Again we find that the activity which is carried on by the appellant is not one which may have been earlier carried on by the Government and transferred to the appellant company."
Following the law laid down by the Hon'ble Supreme Court in the above decision that the private financial institutions, carrying of business or commercial activity, may be performing public duties, but cannot be considered to be covered under the definition of "State" under Article 12 of the Constitution of India, the writ petition against such entity is not maintainable before the High Court.
Hence, in view of the settled principle of law the present writ petition is not maintainable. That apart, since disputed question of facts are involved, we decline to exercise our extraordinary jurisdiction under Article 226 of the Constitution of India on this ground also.
Accordingly, the writ petition is hereby dismissed.
Order Date :- 8.1.2021 Manish Himwan
2 issues framed by the court
Whether a writ petition is maintainable against a private financial institution not covered under Article 12 of the Constitution.
Whether the High Court can exercise jurisdiction under Article 226 to enforce a commercial contract between private parties.
Colour shows how this judgement treated each authority
Federal Bank Ltd. v. Sagar Thomas and othersFollowed¶11
(2003) 10 SCC 733 : AIR 2003 SC 4325 · Who else cites this
Ajay Hasiav. Khalid Mujib SehravardiReferred¶14
(1981) 1 SCC 722 · Who else cites this
Rakesh Yadav
State Of U.P.
2 Others
Naheed Ara Moonis
Dinesh Pathak
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
