2020 Supreme(Kar) 584

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ, J.
Velankani Information Systems Limited – Petitioner
Versus
Secretary, Ministry of Home Affairs, New Delhi – Respondent
Writ Petition No. 6775 of 2020
Decided On : 08-07-2020

Headnote:

Disaster Management Act, 2005 - Industrial Disputes Act - Minimum Wages Act - Factories Act - Banking Regulation Act - Section 5(c)(a) - Reserve Bank of India Act, 1934 - Section 3 - Constitution of India, 1950 - Article 226 - Writ jurisdiction – Employment and service – Tenants - Payment of all term loan installments falling due - Whether facility is extended across Board to all borrowers - Whether acts of a private sector Bank relating to recruitment to its clerical cadre amount to discharges any public duty or public function and therefore can be subjected to challenge under Article 226 of Constitution - Whether a Private Sector Bank carrying on Banking activity can be said discharge public duties - Whether a Writ of mandamus can be issued against a private bank to implement Circular issued by RBI - Whether grant of a moratorium is at discretion of Bank or as a corollary would it be a right to be exercised by borrower - Whether a writ of mandamus can be issued against a private bank to implement the circular issued by RBI - In order to service aforesaid loan there is an agreement arrived at between lenders Respondent Nos. 5 to 7 that revenue from lease rentals of Technology Park would be credited into Escrow Account and revenue from Petitioner’s hotel business would be credited into Escrow Account - Respondent Nos. 5 and 6 were entitled to appropriate Equated Monthly Installment payable on loans due to them from Escrow Account where lease rentals were deposited excess rental was to be released from Escrow Account to current account of Petitioner for utilization by Petitioner to meet its expenses – Similarly revenue arising out of hotel business was to be deposited in Escrow Account relating to hotel business from and out of which Petitioner was entitled to draw monies to its current account on a daily basis for use in connection with its hotel business and from balance make payment of equated monthly installment on loan borrowed on account of hotel business to Respondent No. 7 on due date that of every month – Held, Learned Senior Counsel that Respondent No. 5 is seeking to kill golden goose to get all eggs at one go also deserves consideration - Towards this learned Senior Counsel has countered by stating that Respondent No. 5 is only taking away eggs already laid and not taking any action against goose viz. Petitioner herein – However impact of it is what is to be considered in sense that once all eggs are taken away by Respondents No. 5 and 6 default as regards loan to Respondent No. 7 would automatically result in classification of loan account of Petitioner with Respondent No. 7 as an NPA thus in effect killing of golden goose – Thus cause and effect of such action by Respondent No. 7 being attributable to Respondents No. 5 and 6 they cannot take up such a technical ground in this regard - Respondents 5 to 7 are required to ensure survival and continuance of Petitioner and its business – Thus court of considered opinion that one Bank cannot deny extension of a moratorium when another or others are willing to extend benefit of a moratorium - Learned Additional Solicitor General of India appearing for Respondent 1 and 2 has submitted that RBI is an autonomous and independent entity Respondent No. 1 and 2 cannot issue any direction to Respondent No. 4 thus there can be no directions issued to Respondent No. 1 and 2 to in turn issue directions to Respondent No. 4-RBI - This submission is in consonance with RBI Act, RBI being vested with several obligations and duties in respect of banking as also economic requirements of country is always required to be independent and autonomous - Most of policies formulated guidelines as also circulars issued by RBI have long term impact being predicated both on macro as also microeconomic factors - This would equally apply to Respondent No. 3-State Government hence no direction can be issued to state government for very same reasons - Present situation is on account of aspects beyond control of petitioner namely initiation of lockdown social distancing reduction in number of people working in an establishment etc. though necessary have had an adverse impact on Petitioner’s business - There is no default on part of Petitioner by itself - RBI cannot in circumstances contend that discretion is left to lender to either grant or refuse grant of a moratorium and in same breath contend that it is for Bank to establish as to why Petitioner did not qualify for benefit of Moratorium without stating as to before whom such establishment is to be made - Admittedly there is no mechanism which is created for redressed of grievance on account of improper implementation or non-implementation of recovery package or Circular there is no forum which has been created for Petitioner to complain of as regards any of actions of Bank or a forum created for Bank to establish as to how Petitioner’s request has been property rejected - Pending creation of such a forum this court would have to intervene to provide for a remedy to aggrieved Petitioner to give effect to principle - It is held that no directions could be issued to Respondent 1 and 2-Union of India or Respondent No. 3-State of Karnataka to in turn issue directions to Respondent No. 4-RBI for implementation of Circular - Contentions of RBI that dispute is between Petitioner and Respondents No. 5 to 7 is not acceptable since dispute arises out of implementation or not of a Circular issued by RBI - RBI is therefore directed to monitor implementation of Circular including verification of whether there are Board-approved policies formulated by each of lenders direct all banks to submit Board-approved policies for approval to RBI to approve such board-approved policy verify if such a board-approved policy contains objective criteria set up a proper and effective grievance redressed forum for any aggrieved borrower to approach on account of improper or non-implementation of Policy and/or Circular etc - Writ petition is accordingly disposed of