The court ruled that a Writ Petition against a private bank, addressing contractual obligations, is not maintainable under Article 226 of the Constitution.

JUDGMENT

1. The petitioner has filed this Writ Petition challenging Exts.P5 to P8 notices issued by the respondent Bank proposing to sell gold ornaments which were pledged by the petitioner, his wife, and his daughter.

2. The respondent Bank has filed a statement opposing the prayers in the Writ Petition.

3. I heard the learned counsel for the petitioner, Sri. Thomas Abraham, and the learned counsel for the respondent – Bank, Sri. C.K. Karunakaran.

4. The contention of the learned counsel for the petitioner is that the period for which the gold was pledged has not expired, and before that, the bank has no right to sell the gold ornaments pledged with the bank. The liability under the gold loan is around Rs.1 Crore, whereas the gold pledged is having a value of more than Rs.3 Crores. The petitioner and his wife are in jail. The petitioner is the managing director of an NBFC by the name M/s. Melker Finance & Leasing Pvt. Ltd. When the net worth of the said NBFC is considered, it is more than Rs.1,000 Crores, and the petitioner can easily settle the gold loans and other loans availed by the petitioner, his wife, and the company, if a breathing time is given. The learned counsel invited my attention to Ext.P4 Agreement to convince the resources for money. Since the petitioner has been remaining in jail, the petitioner is not in a position to settle all the loans with the respondent bank immediately. It is in the interest of justice to give a reasonable time to the petitioner to settle all the loans availed by the petitioner, his wife, his daughter, and the company from the respondent Bank.

5. On the other hand, the learned counsel for the respondent –

bank at the outset objected to the maintainability of the Writ Petition stating that the Writ Petition is not maintainable against the respondent – bank, which is a private bank. The learned counsel relied on a decision of the Hon’ble Supreme Court inShobha S. v. Muthoot Finance Ltd. [2025 (2) KHC 229] and the decision of this Court in theAuthorized Officer v. Sheela Francis Parakkal [2025 KHC OnLine 2356] in support of his contentions. That apart, the learned counsel invited my attention to paragraph Nos.7 & 8 of the Statement in which the two clauses of the Gold Loan Agreement are extracted, which would authorize the bank to recall the gold loan at any time before the expiry of 12 months or before the expiry of the period for which the loan is allowed, when the interest of the bank is in jeopardy, and the decision of the bank in this regard shall be final and binding on the borrower, and that the gold can be taken as security for all the debts from the borrower. The learned counsel further contended that even though the other loans are taken by the company, the petitioner and his wife are the guarantors to the said loans, and their liability is coextensive with that of the principal borrower company.

6. I have considered the rival contentions.

7. When the respondent bank has raised a preliminary objection regarding the maintainability of the Writ Petition, this Court has to consider the same in the light of the decisions cited by the learned counsel for the respondents. The respondents being a private bank, this Writ Petition is not maintainable against the respondent Bank. There is no element of public duty involved in the matter. The dispute arises from contractual obligations between the parties, which could not be adjudicated in a Writ Petition in light of the aforesaid decisions cited by the learned counsel for the respondent bank. That apart, on merits also, prima facie, it appears that the bank has a right to recall the loan even b