Reserve Bank Of India vs Onicra Credit Information Co Ltd
2016 Latest Caselaw 4182 Del

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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,

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

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

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.

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
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