Courts cannot direct private banks to accept restructuring proposals and issue directions to RBI without a vested right in favor of the petitioner.

JUDGMENT

Purushaindra Kumar Kaurav, J. (Oral)

1. The petitioner in the instant petition prayed for the following reliefs.

"In view of the facts and circumstances of the present case, it is most respectfully prayed that this Hon'ble Court may be pleased to:

1. Issue appropriate writ, order or direction, in the nature of Mandamus, directing the Respondent no.2 Bank fairly/duly consider restructuring proposal/representation dated 17.01.2022 of the Petitioner in terms of RBI circulars and resolution framework for Covid-19 related stress, and restructuring of advances for MSMEs.

2. Issue appropriate writ, order or direction, in the nature of mandamus directing the Respondent no.2 Bank to allow the petitioner to retire or reduce the outstanding loan amount by way of sale of the properties mortgaged against the loan facility availed by the petitioner from the Respondent no. 2 Bank.

3. Issue appropriate writ, order or direction, in the nature of mandamus directing the Respondent No.1 (RBI) to implement the circulars and notifications dated 06.08.2020 and 05.05.2021 in its true spirit and essence by ways such as issuing clarifications/directions for banks such as respondent No. 2 in this regard.

4. Pass any other order which this Hon'ble Court deem fit in the interest of Justice."

2. Learned counsel appearing on behalf of the petitioner states that in the year 2017-2018, the petitioner availed some credit facilities from respondent no.2-Bank. According to him, the petitioner has dutifully serviced all loans availed from the respondent and is regularly paying the instalments. He submits that in March 2020 on account of Covid-19 Pandemic, the entire sector was adversely affected which required appropriate remedial measures and therefore, the RBI issued various circulars. According to him, respondent no.2-Bank also extended benefit with respect to the Guaranteed Emergency Credit Line (GECL) and a Funded Interest Term Loan (FITL) facility by way of a "Memorandum Recording Past Transactions of Creation of Mortgage by Delivery of Title Deeds."

3. The petitioner with a view to take the advantage of the circulars also availed the benefit of FITL facility. He states that because of certain reasons even the benefit under the FITL facility could not be completely availed by the petitioner and, therefore, he applied for restructuring of the entire loan facility. The representation in that respect was made to the respondent no.2-Bank on 17.01.2022. He therefore, states that under the facts of the present case, the petitioner is entitled for the relief as prayed for.

4. Learned counsel appearing on behalf of the respondent no.2-Bank has opposed the prayer and while referring to his counter affidavit, he states that the petition is not maintainable against the respondent no.2- Bank as the respondent no.2-Bank is not discharging any public duty and, it functions as a commercial venture.

5. According to respondent no.2-Bank, the petitioner in order to avail the loan facility, has mortgaged various properties by creating equitable mortgage by deposit of the original title deeds thereto. The details of the properties have been mentioned in paragraph no.3 of the reply. It is also stated that the application submitted by the petitioner dated 17.01.2022, does not require any consideration as the petitioner had already availed the benefit of FITL, which was sanctioned vide letter dated 12.04.2021. He therefore, states that according to the applicable RBI circular, once the borrower avails the benefit of FITL, restructuring is not permissible. He further states that in terms of communication dated 25.01.2022, the prayer of the petitioner has been rejected by the respondent no.2-Bank, therefore, no mandamus can be issued against the respondent no.2-Bank.

6. I have heard learned counsel appearing on behalf of the parties and perused the record.

7. If the communication dated 25.01.2022, is perused, the same indicates that respondent no.2-Bank had communicated