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2023 Supreme(Online)(Kar) 34199
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF JUNE, 2023 BEFORE THE HON’BLE MRS. JUSTICE K.S. HEMALEKHA WRIT PETITION NO.49211 OF 2012 (GM-ML/PB)
BETWEEN:
SRI KRISHNAPPA S/O. BOMMAIAH @ DADIYAPPA AGE 28 YEARS, R/O. KURUPETE, KANAKAPURA TOWN, RAMANAGARA DISTRICT. ... PETITIONER (BY SRI H.N. BASAVARAJU, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA, BY ITS CHIEF SECRETARY VIDHANA SOUDHA BANGALORE – 01.
Digitally signed by MAHALAKSHMI B M 2. THE STATE OF KARNATAKA Location: HIGH BY ITS SECRETARY COURT OF DEPARTMENT OF FINANCE AND TAXES, KARNATAKA VIDHANA SOUDHA, BANGALORE – 01.
3. THE GOVERNOR RESERVE BANK OF INDIA RESERVE BANK BUILDING, NEW DELHI.
4. THE REGISTRAR, CO-OPERATIVE SOCIETIES, ALI ASKAR ROAD, BANGALORE.
5. THE REGISTRAR AND MONEY LENDER, RAMANAGAR DISTRICT, RAMANAGARA.
6. THE CHAIRMAN, MANAPPURAM FINANCES, MANAPPURAM HOUSE, VALAPAD: THRIRISSUR, KERALA.
7. THE MANAPPURAM FINANCE LTD., BY ITS BRANCH MANAGER KANAKAPURA RAMANAGARA DISTRICT. ... RESPONDENTS (BY SMT. ANITHA N., HCGP FOR R-1 TO R-5;
SRI B. RAVISHANKAR, ADVOCATE FOR R-6 AND R-7)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENTS TO INITIATE NECESSARY ACTION IN LAW AGAINST THE RESPONDENT NOS.6 AND 7 PARTICULARLY UNDER THE PROVISIONS OF KARNATAKA PROHIBITION OF CHARGING EXORBITANT INTEREST, AS INSTRUCTED BY THE RESPONDENT NO.4 DATED 17.08.2011 AS PER ANNEXURE-J; AND DIRECT THE 3RD RESPONDENT GOVERNOR OF RESERVE BANK OF INDIA, TO CANCEL THE LICENSE/PERMISSION ACCORDED IN FAVOUR OF RESPONDENT NO.6 FOR VIOLATIONS OF LAW AND DIRECTIONS, CIRCULAR ETC., THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioner in this writ petition is seeking a writ of mandamus directing the respondents to initiate necessary action against respondent Nos.6 and 7 particularly, under the provisions of Karnataka Prohibition of Charging Exorbitant Interest, Act 2002 and a writ of mandamus directing respondent No.3 to cancel the licence/permission accorded in favour of respondent No.6 for violation of law and directions, circular.
2. Heard the learned counsel for the petitioner and the learned counsel for the respondents.
3. Learned counsel for respondent Nos.6 and 7 would contend that the matter is squarely covered by the dictum of the Apex Court in the case of Nedumpilli Finance Company Limited Vs. State of Kerala and Others in Civil Appeal No.5233/2012 [Nedumpilli Finance]. The Co-Ordinate Bench of this Court in W.P. No.18597/2012 and connected matters placing the reliance on the question of law raised by the Apex Court in Nedumpilli Finance stated supra, has held that Non- Banking Financial Companies registered under the Reserve Bank of India, Act 1934, cannot be regulated by the State Government in terms of Chapter III-B of the Reserve Bank of India Act. Following the dictum of the Apex Court in Nedumpilli Finance (stated supra), the writ petition has been allowed and at paragraph No.6 held as under:
“6. Following the dictum of the Hon’ble Apex Court in NEDUMPILLI FINANCE COMPANY LIMITED (supra), writ petitions are allowed and it is declared that State Enactments i.e., Karnataka Money-Lenders Act, 1961 and the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, are not applicable to the petitioners/NBFCs registered under the 1934 Act and regulated by Reserve Bank of India.”
5. Learned counsel for the petitioner does not dispute the above said proposition and its application to the present facts of the petition.
6. In view of the law declared by the Apex Court in the case of Needumpilli Finance (stated supra), State Enactments, i.e., Karnataka Money-Lenders Act, 1961 and the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 are not applicable to the respondents/Non- Banking Financial Company registered under the Reserve Bank of India Act, 1934 and regulated by the RBI, the present writ petition in present form against respondents is not maintainable.
7. For the reasons stated supra, the writ petition is dismissed as devoid of merits.
