IMPORTANT POINT
The business of banking does not fall within the expression “public duty”. As the activity of the Respondent of conducting the selection process for appointment to the banks is voluntary in nature, it cannot be said that there is any public function discharged by the Respondent. There is no positive obligation, either statutory or otherwise on the Respondent to conduct the recruitment tests.

JUDGMENT :

Brief facts leading to this appeal are that the appellant is an Engineering Contractor and duly registered as a MSME service provider. The appellant is also a partnership firm. The appellant in his individual capacity is engaged in carrying out contract works for Public Works and Irrigation Departments, in the States of Kerala and Tamil Nadu.

2. Brief facts involved in this case are as follows:

The appellant was granted a credit facility to Rs.100 lakhs and the partnership firm was granted a credit facility of Rs.150 lakhs. The partnership firm, in which the appellant was a partner was classified as NPA, on account of some error in the communications made between the appellant and the respondent bank. The said partnership firm approached this court vide W.P.(C) No.26060/2019 challenging the entire proceedings initiated by the respondent bank, consequent to the classification of the appellant's account as NPA. While the above writ petition was pending consideration, the said partnership firm entered into a settlement with the respondent bank assuring them payment of a minimum of Rs.100 lakhs before the end of November, 2019 and further undertook to close the account before 31st March, 2020. The said writ petition was therefore withdrawn, based on the said agreement between the parties vide Ext.P2 judgment. In accordance with the undertakings made, the appellant made a payment of Rs.100 lakhs to the account of the partnership firm. The appellant also sought renewal of cash credit limits and complete waiver of the overdues/penal interest, as well as the reduction of interest in the accounts.

3. The respondent bank, however, failed to reply to Ext.P3 letter despite several reminders send by the appellant. In the meanwhile, the mandatory renewal of license of all government works contractors were to be made prior to 31.3.2020, as per G.O.(MS)No.22/2020/PWD issued by the State Government. The appellant therefore, requested the respondent bank to issue a Solvency Certificate of 100 lakhs for complying with the mandate for renewal of his license. The license was to be renewed as per the Rules and conditions for registration of contractors issued by the Public Works Department. The appellant sent a email enclosing the application forms for issuance of Solvency Certificate. The appellant, on the very same day submitted all the requisite documents, as demanded by the respondent bank. Vide G.O. (Rt)No.402/2020/PWD dated 7.4.2020, the time limit for renewal of the license was subsequently revised upto 15.4.2020 and thereafter, upto 30.6.2020 vide G.O.(Rt)No.510/2020/PWD dated 8.6.2020, due to the lockdown imposed by Central Government, in order to combat COVID 19 pandemic.

4. However, despite repeated requests made by the appellant, the respondent bank though initially agreed to issue the Solvency Certificate, later issued Ext.P6 letter, declining to issue the Solvency Certificate, alleging that the appellant's account was classified as NPA. It is submitted by the appellant that the respondent bank has acted in an arbitrary manner and without any application of mind, refused to issue the solvency certificate, despite incurring no liability by the appellant.

5. It is submitted that the appellant being a Government works contractor is entitled to his livelihood, which could be secured only through renewal of his license, as mandated by the State Government. Non issue of the Solvency Certificate is clearly, a means to stifle the very livelihood of the appellant and hundreds of employees working under him. A Solvency Certificate in the financial world is a proof of solvency, which only means that the person's assets are more than his liabilities. A bank may issue Solvency Certificate to the individuals, stating that the total assets held by an individual, especially, when the assets of the said person are duly mortgaged/hypothecated with the bank. In the instant case, a Power of Attorney in several receivables have also been executed in f