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2025 Supreme(Ker) 1763
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Anil K. Narendran, Muralee Krishna S., JJ.
M/s Noorul Islam Trust – Petitioner
Versus
State Bank Of India, Represented By Its Assistant General Manager and Ors. – Respondents
WA NO. 1266 of 2025
Decided On : 07-07-2025
Advocate Appeared:
For the Petitioner: Sri.P.M.Saneer, Shri.Tony George Kannanthanam, Shri.Gison Aliyas, Shri.Ajith George Koola
For the Respondent: Sri.Amal George, Adv.Jithesh Menon, SC
IMPORTANT POINT
The court ruled that internal bank policies for compromise settlements need not be published, affirming the learned Single Judge's dismissal of the writ petition.
Headnote:
(A) Kerala High Court Act, 1958 - Article 226 - Banking Regulation Act, 1949 - Sections 21 and 35A - Writ appeal challenging dismissal of writ petition for mandamus to formulate and publish compromise settlement policy. The learned Single Judge held that the policy under Ext.P14 Circular is for internal guidance of the bank and does not require public disclosure. (Paras 2 , 10 , 11 )
(B) Writ Jurisdiction - High Court's jurisdiction under Article 226 is limited in cases involving recovery proceedings under the SARFAESI Act, allowing intervention only in exceptional circumstances. (Paras 12 )
Facts of the case:
The appellant, a Charitable Trust, defaulted on a Rs.23 Crore loan from State Bank of India. After failed settlements, it sought judicial intervention to compel the bank to publish its compromise settlement policy, which was dismissed by the learned Single Judge.
Findings of Court:
The court upheld the learned Single Judge's finding that there is no legal necessity to publish the compromise settlement policy.
Issues: Whether the compromise settlement policy must be published by the bank as per the Circular.
Ratio Decidendi: The court concluded that the policy serves as internal guidance and does not require public dissemination, affirming the learned Single Judge's dismissal of the writ petition.
Result: Writ appeal dismissed.
| Table of Content |
|---|
| 1. writ appeal regarding compromise settlement policy. (Para 1 , 2 , 3) |
| 2. legal arguments regarding the necessity of policy publication. (Para 6 , 7) |
| 3. final decision on the writ appeal. (Para 8 , 9 , 9) |
| 4. court's findings on publication requirements. (Para 10 , 11) |
| 5. court's reasoning on jurisdictional limits. (Para 12) |
JUDGMENT :
Muralee Krishna, J.
The petitioner in W.P.(C)No.27856 of 2024 has filed this writ appeal under Section 5(i) of Kerala High Court Act, 1958, challenging the judgment dated 10.03.2025, passed by the learned Single Judge dismissing the writ petition filed by him under Article 226 of the Constitution of India, seeking a writ of mandamus commanding the 3rd respondent Reserve Bank of India to issue appropriate directions to the 1st respondent State Bank of India and the 2nd respondent Authorized Officer, compelling them to formulate a board approved policy as envisaged in Ext.P14 Circular dated 08.06.2023 issued by the 3rd respondent Reserve Bank of India and publish the same in the public domain forthwith. The appellant had also sought for a writ of certiorari to quash Ext.P8 letter dated 19.03.2022 issued by the 1st respondent bank to the extent of appointing recovery agent to recoup the amount due from the appellant; a writ of mandamus commanding respondents 1 and 2 to permit the appellant to settle the loan accounts in question as per Ext.P2 notice dated 30.11.2020 issued by the 1st respondent for One Time Settlement Scheme, 2020, and in tune with the policy framed in pursuance to Ext.P14 Circular/directions issued by the 3rd respondent Reserve Bank of India or in the alternative direct the 3rd respondent to intervene in the matter and to issue necessary directions to respondents 1 and 2 to consider the request for settlement from the appellant in tune with Ext.P14 Circular/directions and also direct the 3rd respondent to take up Exts.P15 and P16 representations dated 26.07.2024 and 01.08.2024 submitted by the appellant and to consider and take effective steps thereon to enable the appellant to close the loan accounts under settlement, within a time frame fixed by this Court.
2. By the impugned judgment, the learned Single Judge found that by Ext.P14 Circular dated 08.06.2023 issued by the 3rd respondent Reserve Bank of India, it is apparent that the policy is intended to lay down the procedure to be followed by the officers of the bank while giving effect to the compromise settlements and technical write-offs. Ext.P14 does not contain any stipulation that the compromise settlement policy should be published. A reading of Ext.R1(D), particularly the last sentence extracted in the judgment, leaves no room for doubt that it is meant as guidelines for the bank officials. The learned Single Judge dismissed the writ petition, rejecting the contention of the appellant that the compromise settlement policy should have been published and failure to do so has prejudiced the appellant.
3. According to the appellant, it is a registered Charitable Trust running various educational institutions. The appellant availed a term loan of Rs.23 Crores from the 1st respondent Bank on 21.03.2013. The loan fell in default and the bank proceeded with the recovery measures and initiated steps for taking over the possession of secured assets by issuing a demand notice under Section 13(2) of the SARFAESI Act on 30.11.2017, demanding an amount of Rs.28,78,76.208/-. At that stage, the appellant approached the Debt Recovery Tribunal by filing S.A.No.247of 2018. The bank also filed a suit before the tribunal as O.A.No.4 of 2018. During the pendency of the proceedings before the tribunal, the bank offered settlement of the loan account for Rs.20 Crores and agreed that the appellant to make such payments in various instalments. This was agreed by both parties, and accordingly, on the basis of the compromise entered into between them, the tribunal passed Ext.P1 order dated 22.10.2019 in O.A.No.4 of 2018. However, the repaym
