Allowed

Branch Manager Bazar Branch State Bank of India Jamtara through Sri Abdul Razaque Ali v. Deb Kumar Shaw

Jharkhand HC4 Sept 2019WPC/3424/2012

Case brief

AI extract

What is this about?

The High Court allowed the writ petition and quashed the order of Permanent Lok Adalat which waived 50% interest. Holding that banking services are not public utility services, the Court decided the Lok Adalat lacked jurisdiction.

What did the court decide?

The writ application was allowed and the impugned order dated 25.04.2012 passed by Permanent Lok Adalat was quashed and set aside.

Branch Manager Bazar Branch State Bank of India… — Banking and Recovery | Jharkhand HC (2019)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 3424 of 2012 Branch Manager, Bazar Branch, State Bank of India, Jamtara though Sri Abdul Razaque Ali

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.... Petitioner Versus Deb Kumar Shaw … Respondent

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Versus ---

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CORAM : HON’BLE MR. JUSTICE RONGON MUKHOPADHYAY

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--For the Petitioner : Mr. Kaushik Sarkhel, Advocate For the Respondent : None ---

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Order No. 07 Dated 04^th September, 2019

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Heard Mr. Kaushik Sarkhel, learned counsel for petitioner. None appears for the respondent.

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The petitioner in this writ petition is aggrieved by the order dated 25.04.2012 passed by Permanent Lok Adalat, Jamtara in P.L.A. Case No. 12 of 2012 by which the application preferred by the respondent for settling the loan amount without interest was allowed and 50% of the loan amount was waived.

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It has been stated by learned counsel for the petitioner that the petitioner State Bank of India (S.B.I.) does not come within the public utility service in terms of Section 22A(b) of the Legal Services Authority Act, 1987. It has further been stated that the banking services do not come within Section 22A(b) Legal Services Authority Act, 1987 and although the petitioner raised this preliminary objection but no consideration was made by Permanent Lok Adalat while deciding the issue in favour of the applicant.

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The factual aspect of the case reveals that the respondent had purchased a Tata Sumo Victa vehicle bearing registration No. JH-21E-3282 after taking vehicle loan to the tune of Rs. 4,30,000/- from the petitioner on 08.01.2011. The vehicle was subsequently stolen for which an F.I.R. was also instituted. It appears that the loan which was taken by the respondent was Rs. 4,30,000/- and on the date of theft of the vehicle the interest accrued was Rs. 15,514/- and the total amount due on 16.02.2011 was Rs. 4,45,515/- and the respondent had made payment of Rs. 80,798 to the petitioner and thus the total amount due was to the tune of Rs. 3,64,716/-. An application was preferred by the respondent before the Permanent Lok Adalat praying for One Time Settlement and it was also prayed that the respondent is inclined

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to pay the principal amount towards the one time settlement. On such application the matter was conciliated upon but the petitioner bank had agreed to the proposal of the respondent at which the Permanent Lok Adalat considered the case on merits and taking a lenient view had waived 50% of the interest to be paid by the petitioner.

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It is not in dispute that the petitioner is not included in the public utility service in terms of Section 22A(b) of the Legal Services Authority Act, 1987. The question whether the banking services falls within the definition of public utility services under Section 22A of the Legal Services Authority Act, 1987 has been considered by this Court in Citicorp Finance (India) Ltd. v. Dhrub Shanker Thakur and another reported in [2013(1) JCR 55 (Jhr)] wherein it was held as follows:-

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“7. Under section 22A(b) (i) to (vi), the definition of Public Utility Service do not include the banking services or any financial institution of such nature within the purview of the Public Utility Services. Therefore, the Permanent Lok Adalat had no jurisdiction to entertain the dispute in relation to the claim made by the respondent no. 1 arising out of hire purchase agreement/ Hypothecation agreement by which it had entered into hire-purchase agreement for the vehicle in question with the petitioner-company. It further appears that the Permanent Lok Adalat failed to follow the procedure prescribed under Section 22(4) to (7) of the Act by making an attempt to conciliate and/or frame terms of settlement offered to the rival parties to arrive at compromise on the same before adjudicating the dispute on merit.

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8. Be that as it may, since the aforesaid services of providing loan under hire-purchase agreement/ Hypothecation agreement by the petitioner does not fall under the public utility service under Section 22A of the Act, the impugned order and the award passed by the Permanent Lok Adalat is wholly without jurisdiction. The Permanent Lok Adalat has proceeded assuming jurisdiction over a subject when the said services does not fall within the public utility service. In the circumstances, wrong for which the respondent no. 1 has invoked the forum of Permanent Lok Adalat, cannot be remedied by the said forum, even though the respondent no. 1 may have remedy elsewhere.”

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The Permanent Lok Adalat therefore could not have entertained the said application since the petitioner did not come within the definition of public utility services under Section 22A(b) of the Legal Services Authority Act, 1987.

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In view of the aforesaid therefore this writ application stands allowed and the impugned order dated 25.04.2012 passed by Permanent Lok Adalat, Jamtara in P.L.A. Case No. 12 of 2012 is hereby quashed and set aside.

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(RONGON MUKHOPADHYAY, J.)

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Branch Manager Bazar Branch State Bank of India Jamtara through Sri Abdul Razaque Ali v. Deb Kumar Shaw

Case brief

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Branch Manager Bazar Branch State Bank of India Jamtara through Sri Abdul Razaque Ali v. Deb Kumar Shaw

Case brief

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