The court emphasized that it is not within its jurisdiction to direct a banker to grant or continue with a credit facility and that no law obliges a banker to provide a pre-decisional hearing to a borrower regarding the reduction of credit facilities.

1. The petitioners assail a decision of the State Bank of Bikaner and Jaipur to reduce the limit of a credit facility granted to the first petitioner. The petitioner also seeks a direction for consideration of a one time settlement made by the petitioner to the State Bank of India.

2. Learned senior advocate for the petitioner refers to the impugned communication dated December 28, 2016 issued by State Bank of Bikaner & Jaipur (SBBJ) and submits that, SBBJ has not given any reason as to why the credit limit has been reduced. He submits that, the State Bank of India should consider the one time settlement in accordance with law. He draws the attention of the Court to the fact that the first petitioner is enjoying credit facilities with various bankers under a consortium agreement. The first petitioner has proposed a debt restructuring. Subsequently thereto, the SBBJ has reduced the credit limit. Such action of SBBJ is wrong. He relies upon (2016) 6 Supreme Court Cases 635 (Andhra Pradesh State Council of Higher Education Vs. Union of India & Ors.) in support of his contention.

3. Learned counsel for the State Bank of India submits that, it is the lead banker of the consortium. The account of the first petitioner has become a non performing asset. State Bank of India has initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002). He refers to a writing dated February 18, 2017 and submits that, the proposal for one time settlement has been rejected by the State Bank of India and that such rejection has since been communicated to the first petitioner.

4. Learned advocate for the SBBJ submits that, the credit has been reduced in view of business exigencies and as directed by State Bank of India, who is the lead banker of the consortium.

5. Learned advocate appearing for the State Bank of Hyderabad submits that, the account of the first petitioner has become a non-performing asset. He appears for Punjab National Bank also and submits that, such account has not been declared as a non-performing asset yet.

6. Learned advocate for the Bank of Baroda submits that, there is a claim in excess of Rs.6 crores against the first petitioner and that the bank has not been paid since August 2016.

7. I have considered the rival contentions of the parties and the materials made available on record.

8. SBBJ has reduced the credit limit by the impugned writing dated December 28, 2016. SBBJ claims that it has done so under the directions of State Bank of India, who is the lead banker of the consortium. It is an admitted fact that, the credit facilities were obtained by the first petitioner from the respondent bank in a consortium in which the State Bank of India is the lead banker. The decision to reduce the credit limit is for a banker to take. It is not for the Writ Court to interject and direct a banker to grant the credit facility or continue with such credit facility. No law has been placed to suggest that a borrower is entitled to a pre-decisional hearing in respect of a decision to reduce the credit limit taken by a banker in its usual course of business.

9. Andhra Pradesh State Council of Higher Education (supra) relates to an action taken by an authority under the provisions of the Andhra Pradesh Reorganisation Act, 2014. Such a decision cannot be read to mean that a bank is obliged to give pre-decisional hearing in respect of reduction of credit facilities to its constituent.

10. The next prayer of the petitioners is that, the one time settlement made to State Bank of India should be directed to be considered.

11. Learned advocate for the SBI has relied upon a writing dated February 18, 2017 by which the SBI has considered the proposal for one time settlement and has rejected the same. A dispute is raised that the letter dated February 18, 2017 was not received by the petitioners. In order to obviate further disputes a copy of such letter has been