Putchala Nagaraju, vs Hero Fincorp Ltd,
2021 Latest Caselaw 946 AP

       HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO

            WRIT PETITION No.19693 of 2020

ORDER:

The petitioner, who is appearing as a party in-

person is a practising Advocate at Visakhapatnam. He had

obtained a car loan from the 2nd respondent which is a privately

owned corporation for a sum of Rs.13,20,768/- on 16.05.2019.

It may also be noted that respondent Nos.1 and 2 are essentially

one and the same. The said loan has to be repaid in 60 monthly

installments. The petitioner had purchased a Maruthi Ciaz

(petrol) top end model with registration bearing No.AP-31-EJ-

8632 with the Regional Transport Office, Visakhapatnam. He

states that he commenced payment of EMIs till the onset of the

Covid-19 Pandemic. He submits that his EMI cheque for an

amount of Rs.32,199/- was presented by the 2nd respondent

despite the moratorium announced by the Reserve Bank of India

and the said cheque was dishonoured on the ground of

insufficient funds. He submits that on account of the

restrictions placed due to Covid-19 Pandemic, he was unable to

continue in his profession due to which, he did not have

sufficient funds for paying the EMIs. He submits that

respondent Nos.1 and 2 sought to repossess the vehicle without

following due course of legal process and without providing an

opportunity to make payment of part of interest. He submits

that the present value of vehicle is about Rs.8,00,000/- and the

respondents would seek to auction the car at a very low price 2 RRR,J W.P.No.19693 of 2020

which would impact his CIBIL score and he would be

permanently identified as a defaulter. On the basis of these

grounds, he seeks a writ in the nature of a writ of mandamus

directing the 1st respondent to provide him minimum 12 months

breathing time to pay the EMI and accept the component

interest on the remaining balance from the principal pending on

his car loan by considering his representation through an Email

to the customer care department given on 09.10.2020 with a

further direction to the respondents not to dispossess the

petitioner from his car and not to affect his CIBIL score on

account of his default.

2. At the stage of admission, this Court had called

upon the petitioner to show how this writ petition is

maintainable as the 1st respondent is a private corporation.

3. Sri Nagaraju Putchala, the petitioner herein

submitted that since the 1st respondent operates under the

control and direction of the Reserve Bank of India, it is

undertaking a public duty which would categorize the said

organization as part of the "State" under the Article 12 of the

Constitution of India. He relies upon two Judgments of the

Hon'ble Supreme Court namely Som Prakash Rekhi vs. Union

of India & others1 and Zee Telefilms Limited & another vs.

Union of India & others2. In the case of Som Prakash Rakhi

(cited 1 supra) the Hon'ble Supreme Court was looking at a case

AIR 1981 SC 212

AIR (2005) SC 2677 3 RRR,J W.P.No.19693 of 2020

whether Bharat Petroleum which is owned and controlled by the

Central Government would be "State" under Article 12 of the

Constitution of India. In the present case the 1st respondent is a

privately owned commercial organization and there are no facts

which would require the 1st respondent to be treated as part of

the state.

4. In Zee Telefilms Limited's case (cited 2 supra), the

Hon'ble Supreme Court had held that the Board of Cricket

Control of India could be treated as a state as it discharges

public duties and has an effective monopoly over the sport of

cricket. In the present case, the 1st respondent is a private non

banking financial company which gives out loans on interest

and undertakes activities purely on a commercial basis. The

fact that the directions of the Reserve Bank of India are binding

on the 1st respondent does not bring the 1st respondent within

the ambit of the "State".

5. In these circumstances, the present writ petition is

not maintainable before this Court as the 1st respondent is not a

State within the meaning of Article of 12.

6. Accordingly, the writ petition is dismissed. There

shall be no order as to costs.

As a sequel, pending miscellaneous petitions, if any,

shall stand closed.

____________________________ R. RAGHUNANDAN RAO, J.

18.02.2021 sdp