Anil Agarwal and Anr. Vs Reserve Bank of India and Ors. — Calcutta HC (2024) — LawSathi Research

Anil Agarwal and Anr. Vs Reserve Bank of India and Ors. — Calcutta HC (2024) — LawSathi Research

What the court decided

AI extract

Outcome

The bank is to issue an intimation to the petitioner clarifying the reason why the petitioner's account could not be treated as a normal closure account.

Issue for consideration

Whether the writ Court can entertain the petitioner's prayer for a mandamus directing the bank to treat the petitioner, whose account was settled and written off, at par with customers who paid off the bank dues and interest on time. +1 more

Court's answer

The prayer for a mandamus directing the bank to treat the petitioner at par with customers who paid off the dues and interest on time cannot be entertained; the petitioner was a defaulter seeking full closure of an account which had become NPA.

Ratio / Principle

The bank's treatment of the closure as settlement/written-off rather than normal closure is its own policy, used to rate a customer's credibility and to assess the customer's financial health before any further transaction.

Key takeaways

A writ Court cannot direct the bank to change its policy of rating its customers; such matter is within the exclusive jurisdiction of the bank.ratio¶12

Detailed headnote1 paragraphs

Writ petition (High Court at Calcutta, Original Side, WPO/717/2024) disposed of by Justice Shampa Sarkar on 1 August 2024. Petitioners, defaulters whose account had become NPA and who had entered into a one-time settlement with the bank (remaining dues written off), sought a mandamus that the bank treat them at par with customers who paid off dues and interest on time and accord full/normal closure to the account. Held: the prayer cannot be entertained; the bank's classification of the closure as 'settlement/written off' rather than a normal closure is the bank's own rating policy, used to rate a customer's credibility and to assess financial health before further transactions, and a writ Court cannot direct the bank to change that policy, the matter being within the exclusive jurisdiction of the bank. Petition disposed of, with the bank directed to intimate to the petitioner the reasons why the account could not be treated as a normal closure account.

OD-11 ORDER SHEET IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction ORIGINAL SIDE

WPO/717/2024

ANIL AGARWAL AND ANR VS RESERVE BANK OF INDIA AND ORS

BEFORE:

The Hon'ble JUSTICE SHAMPA SARKAR Date : 1^st August, 2024

Appearance : Ms. Arunima Lala, Adv. Mr. Subhamoy Patra, Adv. Mr. Jetinder Das, Adv. … for the petitioner.

Mr. Dipanjan Datta, Adv. … for respondent no.2-4.

The Court: Affidavit-of-service filed be taken on record.

The prayer in the writ petition for a mandamus upon the bank to treat the petitioner as a customer at par with other customers who paid off the bank dues and interest on time, cannot be entertained by this Court. The petitioner wants full closure of the account which had become NPA. The petitioner was a defaulter.

The petitioner entered into one time settlement with the bank. The bank agreed on a particular amount. The remaining amount payable by the petitioner was written off. While giving the rating to the petitioner, the bank did not treat the account as a foreclosed account and did not treat the closure as a normal closure but as a settlement/written off. This decision of the bank is a policy which the bank follows to rate its

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customers. It is used to rate the credibility of a customer of the bank, to assess the financial health of a customer before the bank or any financial institution may embark into any further transaction with such customer. A writ Court cannot direct the bank to change its policy of rating its customers. Such matter is within the exclusive jurisdiction of the bank.

Under such circumstances, the writ petition is disposed of.

The bank will issue intimation to the petitioner clarifying the reason as to why the petitioner’s account could not be treated as a normal closure account.

(SHAMPA SARKAR, J.)

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