A writ petition is maintainable against a private bank for the enforcement of RBI Circulars issued to protect and preserve the economy of the country on account of the Covid-19 Pandemic.

ORDER :

Heard Mr.Md.Sharfuddin, learned Counsel for the petitioner, Mr.G.Praveen Kumar, learned Deputy Solicitor General of India, for Respondent No.1, Mr.K.Rathanga Pani Reddy, learned counsel for Respondent No.2 and learned Senior Counsel Mr.Prabhakar, appearing on behalf of Mr.Vivek Jain, learned counsel for Respondent No.3.

2. This Writ Petition is filed praying to issue a Writ of Mandamus to direct the 2nd respondent to initiate instructions and guidelines to 3rd Respondent to adhere to the notification dated 27.03.2020 RBI/2019-20/186 DOR No. BP.BC 47/21.04.048/2019-20 and 3rd respondent be directed to abide by circular dated 27.03.2020, circular dated 17.04.2020 and circular dated 05.05.2021 and subsequently direct the 1st and 2nd respondent to initiate instructions and guidelines for the implementation if the Emergency Credit Line Guarantee Scheme (ECLGS) Operational Guidelines updated as on October 06, 2022 and issue of Directions/guidelines to the 2nd respondent to direct and cease the illegal activity of 3rd respondent of realizing the default amounts from the secured assets through action etc. and to prevent the 3rd respondent from persistently threatening the petitioner for the recovery of defaulted amounts and also direct the Respondents 2 and 3 to grant ex gratia compensation of Rupees fifty crore amount to the petitioner for not implementing the Moratorium circulars dated 27.03.2020 and 17.04.2020, 05.05.2021 and ECGLS guidelines and schemes in letter and spirit and causing damage to the reputation and business of the petitioner by turning its Account NPA illegally.

3. The case of the Petitioner as per the averments made by the petitioner in the affidavit filed by the petitioner in support of the present Writ Petition in brief, are as follows:

a) The petitioner herein is a Director of Bitstreet Technologies Pvt. Limited which is operating its business since 2015 from Hyderabad & Mumbai. However, all the work orders of about 75 Crores got cancelled due to Covid and booked a loss of about 10 Crores due to shut down of offices in Mumbai & Hyderabad during Covid due to nonsupport of bank credit line on time. Thereafter, the RBI Circular dated 27.03.2020providing moratorium to all commercial borrowers under the light ofCOVID-19 came as relief to such entities as it would have become a huge financial burden for the borrowers to pay the EMIs regularly in this period. However, that facility was denied to the petitioner.

b) Furthermore, the RBI Circular vide No. RBI/2019-20/186 DOR. No.BP. BC.47/21.04. 048/2019-20 of 27.03.2020 under the COVID-19 relief package which came as a relief for the business entities provided for the initiation of loan moratorium period wherein the customers of the financial institutions can defer the EMIs under the light of COVID-19 circumstances and therefore during such moratorium there will be no pressure on the borrowers to comply with the payment of the installments. Further, notification dated 17.04.2020 was brought by the RBI which restricted to declare any account NPA as per the guidelines issued.

c) Subsequently, the 3rd respondent on 30.04.2020 turned the account of the petitioner into NPA without any prior information, which was contrary to the circular issued by the RBI dated 27.3.2020 as covid19 relief package. During the moratorium period no relief was provided by the 3rd Respondent rather during such window the account was declared NPA. Moratorium relief is applicable to all those commercial loans which were in default on 01.03.2020 and yet the petitioner’s loan account was declared NPA and this period of moratorium was taken into consideration for the computation of 90 days for declaration of NPA.

d) Moreover, the Notification in simple sense portrays the fact all those accounts which were granted as standard account on or before 29.02.2020, and such account’s cannot be converted into Non-Performing Assets further, in later stage after this notification is brought in. The Statement pe