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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 31.05.2016
+ LPA 370/2016
RESERVE BANK OF INDIA ..... Appellant
versus
ONICRA CREDIT INFORMATION CO LTD ..... Respondent
Advocates who appeared in this case:
For the Appellant : Mr Suhail Dutt, Sr Advocate with Mr H.S. Parihar and
Mr Azhar Alam, Advocates.
For the Respondent : Mr Rajeeve Mehra, Sr Advocate with Mr Amish Tandon,
Ms Shruti Aggarwal and Ms Lipika Mahajan, Advocates.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SANJEEV SACHDEVA
JUDGMENT
BADAR DURREZ AHMED, J (ORAL) CM No.21835/2016 (exemption) Exemption is allowed subject to all just exceptions. CAV 478/2016 The learned counsel for the respondent/Caveator is present. The caveat stands discharged.
LPA 370/2016 & CM No.21834/2016 (stay)
1. This appeal is directed against the judgment dated 21.04.2016, LPA No.370/2016 Page 1 of 5 passed by a learned Single Judge in WP(C) 6775/2011, challenging an order dated 17.07.2009, passed by the appellant (RBI) under Section 5(2) of the Credit Information Companies (Regulations) Act, 2005 (hereinafter referred to as „the said Act‟) rejecting the application of the respondent for a Certificate of Registration as a Credit Information Company. The respondent filed the writ petition also challenging the order dated 01.06.2011 passed by the Appellate Authority under Section 7 of the said Act whereby the appeal preferred by the respondent against the order dated 17.07.2009 had been dismissed.
2. The learned Single Judge, by virtue of the impugned judgment, after hearing counsel for the parties, disposed of the petition in the following manner:-
"20. Accordingly, the petition is disposed of with the following directions:-
(i) The petitioner to on or before 28th April, 2016 make a fresh application to the respondent RBI for registration in terms of Section 4 of the Credit Information Companies (Regulations) Act, 2006.
(ii) The respondent RBI to on or before 20th August, 2016 as requested, consider and communicate its decision on the said application to the petitioner.
(iii) The aforesaid consideration and decision shall be uninfluenced by the rejection of the earlier application of LPA No.370/2016 Page 2 of 5 the petitioner and dismissal of the appeal preferred by the petitioner thereagainst.
(iv) The respondent RBI independently of the aforesaid, if so deems necessary would be entitled to invite applications from others and to also initiate the process of determination under Section 5(3) of the Act."
3. According to the learned counsel for the appellant, the impugned judgment is contrary to the statutory provisions of the said Act. In particular, the grievance is that the direction given to the appellant to consider the application of the respondent without there being any determination under Section 5(3) of the said Act and without using the same as a ground for rejecting the said application, is contrary to the scheme of the Act. According to the learned counsel for the appellant, the appellant is required to first determine the total number of Credit Information Companies which may be granted Certificates of Registration under Section 5(3) of the said Act and it is only thereafter that the application of the respondent can be considered.
4. This argument was also raised before the learned Single Judge and, in our view, the learned Single Judge has rightly repelled the same. This is so because there is no mandate under Section 5(3) requiring the Reserve Bank of India to prescribe the total number of Credit Information LPA No.370/2016 Page 3 of 5 Companies. That is a discretion which has been given to the Reserve Bank of India and the same is evidenced by the use of the word "may". The use of the word "may" is not always determinative of whether a provision is mandatory or discretionary. But, in the present context, we read Section 5(3) as a discretion which has been vested in the Reserve Bank of India.
5. The point that is to be considered is whether an application can be moved by a prospective registrant under Section 4(1) and the same has to be considered by the Reserve Bank of India on the principles stipulated in Section 5(1) and Section 5(2) thereof? As long as there is no maximum number of Credit Information Companies stipulated and there do not exist that number of companies, any prospective Credit Information Company can move an application under Section 4(1) of the said Act and the same has to be disposed of in accordance with law. However, there is also no bar on the Reserve Bank of India in simultaneously considering the application and also determining the total number of Credit Information Companies which may be granted a certificate under Section 5(3) when an application by a prospective Credit Information Company is moved under Section 4(1) of the said Act.
LPA No.370/2016 Page 4 of 5
6. In view of this interpretation to the said provision, we feel that the impugned directions given in paragraph 20 of the impugned judgment only needs to be tweaked. The only change that would be necessary, in our view, would be a change in direction No.(iv). Instead of the existing
(iv), the following (iv) be substituted:-
"(iv) The respondent RBI can simultaneously while considering the application of the respondent, if it so deems necessary, also enter upon a determination under Section 5(3) of the said Act."
7. The appeal is partly allowed to the aforesaid extent. The pending applications also stands disposed of.
BADAR DURREZ AHMED, J
MAY 31, 2016 SANJEEV SACHDEVA, J
st
LPA No.370/2016 Page 5 of 5