Writ jurisdiction is not applicable for disputes arising from private loans, emphasizing that private financial institutions do not act as public authorities and contractual agreements cannot invoke public law remedies.

JUDGMENT :

Sanjeeb K. Panigrahi, J.

1. The present writ proceedings arise from an alleged threat issued to the present Petitioner in the guise of the Opposite Party No.1’s notice dated 22.5.2025 for invocation of arbitration proceedings.

I. FACTUAL MATRIX OF THE CASE :

2. The Petitioner, approached Mahindra & Mahindra Financial Services Limited for financial assistance to purchase a commercial truck. Upon acceptance of his proposal, a loan of Rs.17,21,153/- along with finance charges of Rs.3,91,584/- was sanctioned, bringing the total agreement value to Rs.21,12,737/-. The petitioner purchased the truck, which was hypothecated in favour of the lender, and agreed to repay the loan in 43 monthly instalments of Rs.35,000/-.

3. The petitioner maintains that he consistently and regularly paid instalments over several years and had cleared 40 out of the 43 instalments. He claims to have repaid Rs.19,55,520/- out of the total amount due, leaving only a small outstanding balance of approximately Rs.1,80,972/-, inclusive of penal charges. According to him, the brief default occurred solely due to the sudden illness of his mother, which temporarily affected his ability to make the final payments. He asserts that he had approached the lender seeking a short extension to clear the remaining dues.

4. Despite this substantial repayment history, the petitioner unexpectedly received a notice issued by the lender invoking arbitration proceedings dated 22.5.2025 and calling upon him to indicate his willingness to participate within seven days as well as suggest the name of an arbitrator for adjudication of the dispute.

5. The Petitioner has approached this Court in fear of the risk of repossession of his vehicle, and therefore, he seeks restraint against further coercive action, protection of his rights over the vehicle, and reasonable time to clear whatever amount may be legitimately outstanding. He asserts that the lender’s conduct has been arbitrary,unjust, and violative of principles governing fair contractual dealings.

6. Now that the facts leading up to the instant Petition has been laid down, this Court shall endeavour to summarise the contentions of the Parties and the broad grounds that have been raised.

II. PETITIONER’S SUBMISSIONS

7. The Ld. Counsel for the petitioner asserts that at no point prior to the notice dated 22.5.2025 was he served with any warning of possible seizure of the vehicle. He contends that the brief delay in repayment despite his exemplary track record merited some consideration and the notice dated 22.5.2025 has been issued without adherence to lawful procedure, regulatory guidelines, or fair-practice norms governing lending institutions. According to him, the lender is attempting to use coercive methods, causing him financial distress and threatening to deprive him of his only means of livelihood.

III. OPPOSITE PARTYS’ SUBMISSIONS:

8. Per contra, the Ld. Counsel for the Opposite Party Company would, at the outset, raise a preliminary objection regarding the maintainability of the writ petition under Articles 226 and 227 of the Constitution. It is contended that the dispute arises purely from a contractual relationship embodied in the Loan Agreement dated 28.10.2023, and that the respondent is a private, non-State entity, not falling within the definition of “State” or “authority” under Article 12. It is argued that the writ jurisdiction cannot be invoked to challenge actions of a private lender arising out of private contract