Pny Sabha Finance Ltd vs The Union Of India
2021 Latest Caselaw 14794 Ker

              IN THE HIGH COURT OF KERALA AT ERNAKULAM
                              PRESENT
                THE HONOURABLE MR. JUSTICE T.R.RAVI
   THURSDAY, THE 15TH DAY OF JULY 2021 / 24TH ASHADHA, 1943
                      WP(C) NO. 14082 OF 2021


PETITIONER:

          PNY SABHA FINANCE LTD.
          (N.B.F.C. REGISTERED UNDER RESERVE BANK OF INDIA)
          REGISTERED OFFICE AT 7/276A -
          PERINGOTTUKARA NAMBOOTHIRI YOGAKSHEMA SABHA
          BUILDING, ANTHIKAD, THRISSUR, PIN - 680 641
          REPRESENTED BY ITS MANAGING DIRECTOR
          MR.M.S.PREDEEP, S/O.SANKARAN NAMBOOTHIRI,
          AGED 59, MANKORE MANA, KANJANI P.O., THRISSUR.
          BY ADVS.
          N.M.MADHU
          C.S.RAJANI


RESPONDENTS:

    1     THE UNION OF INDIA
          REPRESENTED BY THE SECRETARY,
          MINISTRY OF FINANCE, NEW DELHI - 110 001.
    2     THE RESERVE BANK OF INDIA
          REPRESENTED BY THE CHIEF GENERAL MANAGER-IN-CHARGE,
          CENTRAL OFFICE BUILDING, SHAHID BHAGAT SINGH MARG,
          MUMBAI - 400 001.
    3     THE GENERAL MANAGER
          DEPARTMENT OF SUPERVISION (NBFC),
          RESERVE BANK OF INDIA, BAKERY JUNCTION,
          THIRUVANANTHAPURAM - 695033.
    4     THE SOUTH INDIAN BANK LTD.
          REPRESENTED BY ITS CHAIRMAN,
          T.B.ROAD, MISSION QUARTERS,
          THRISSUR, KERALA - 680 001.
    5     THE DHANALEXMI BANK LTD.
          REPRESENTED BY ITS CHAIRMAN,
 WP(C) NO. 14082 OF 2021           2



          DHANALEXMI BUILDINGS, NAICKANAL,
          THRISSUR, KERALA - 680001.
    6     THE FEDERAL BANK
          REPRESENTED BY ITS CHAIRMAN,
          P.B.NO.103, FEDERAL TOWERS,
          ALUVA, KERALA - 683 101.
    7     THE HDFC, REPRESENTED BY ITS CHAIRMAN
          1ST FLOOR, C.S.NO.6/242,
          SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI - 400 013.
    8     THE PUNJAB NATIONAL BANK
          REPRESENTED BY ITS CHAIRMAN,
          PLOT NO.4, SECTOR-10,
          DWARAKA NEW DELHI - 110 075.
    9     THE SERVICE CO-OPERATIVE BANK
          REPRESENTED BY ITS SECRETARY,
          THE KERALA STATE CO-OPERATIVE BANK LTD.,
          PB NO.6515, COBANK TOWERS, PALAYAM,
          THIRUVANANTHAPURAM, KERALA, PIN - 695 033.
          *(CORRECTED)
          SREEKRISHNAPURAM SERVICE CO-OPERATIVE BANK LTD.
          NO.F1213, SREEKRISHNAPURAM P.O.,
          PALAKKAD 679 513 (* ADDRESS OF 9TH RESPONDENT
          CORRECTED AS PER ORDER DT.15.7.2021 IN WPC
          14082/2021)
    10    THE UNION BANK OF INDIA
          REPRESENTED BY ITS CHAIRMAN,
          239, VIDHAN BHAVAN MARG,
          NARIMAN POINT, MUMBAI - 400 021.
    11    THE URBAN CO-OP. BANK LTD.
          REPRESENTED BY ITS SECRETARY, PB NO.10,
          URBAN BANK, BUILDINGS, PATTAMBI ROAD,
          PERINTHALMANNA P.O., MALAPPURAM DT.,
          KERALA, PIN- 679 322.
    12    THE BANK OF BARODA
          REPRESENTED BY ITS CHAIRMAN,
          BARODA CORPORATE CENTRE, PLOT NO.C-26,
          BLOCK G, BANDRA KURLA COMPLEX,
          BANDRA (EAST), MUMBAI - 400 051.
    13    THE BANK OF INDIA
          REPRESENTED BY ITS CHAIRMAN,
          STARHOUSE, C-5, G BLOCK, BANDRA KURLA COMPLEX,
          BANDRA (EAST), MUMBAI - 400 051.
 WP(C) NO. 14082 OF 2021                3



     14      THE CATHOLIC SYRIAN BANK LTD
             REPRESENTED BY ITS CHAIRMAN,
             CSB BHAVAN, HEAD OFFICE, P.B.NO.502,
             ST.MARYS COLLEGE ROAD, THRISSUR - 680020.
             R14 BY ADV. SRI.MADHU RADHAKRISHNAN
             R5 BY ADV. C.K.KARUNAKARAN
             R7 BY ADV. M.PREMCHAND
             R8 BY ADV. SANDEEP ANKANATH
             R10 BY ADV. A.S.P.KURUP
             R12 BY ADV. R.REMA
             R4 BY ADV. SUNIL SANKAR

      THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON   15.07.2021,   THE   COURT   ON   THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
 WP(C) NO. 14082 OF 2021                 4



                      WP(C)No.14082 of 2021

              (Dated this the 15th day of July, 2021)

                              JUDGMENT

The petitioner, which is a Non-Banking Financial Company

registered under the Reserve Bank of India Act, 1934, has filed this

Writ petition, being aggrieved by Exhibits P4, P5 and P8 circulars

issued by the 2nd Respondent. The grievance projected is regarding the

restriction imposed on the banks to open current accounts, for

customers who have availed credit facility facilities in the form of cash

credit/overdraft, and the requirement that all transactions should be

routed through the cash credit/overdraft account.

2. Heard Sri N.M.Madhu on behalf of the petitioner, Sri Sunil

Sankar on behalf of the 4 th respondent, Sri C.K.Karunakaran on behalf

of the 5th respondent, Sri M.Premchand on behalf of the 7 th respondent,

Sri Sandeep Ankarath on behalf of the 8 th respondent, Sri A.S.P.Kurup

on behalf of the 10th respondent, Smt R.Rema on behalf of the 12 th

respondent and Sri Madhu Balakrishnan on behalf of the 14 th

respondent. Since the issue involved in the case is already covered by

judgments in similar cases, it is not necessary to issue notice to the

remaining respondents.

3. A learned Single Judge of this Court had considered a batch

of Writ petitions involving the very same issues and has by judgment

dated 9.4.2021 in W.P.(C)No.22768 of 2020 and connected cases held

in paragraph 5 as follows:

"5. After hearing the Standing Counsel for the Reserve Bank of India and the State Bank of India, and the learned counsel appearing for the petitioners, this Court is of the opinion that the issues pointed out by the petitioners should be dealt with in an appropriate manner protecting the interest of the petitioners and at the same time recognising the spirit of the circulars of the Reserve Bank of India. In that view of the matter, the petitioners and their Banks may sit together and try to arrive at a workable solution in the matter. In case issues are not resolved or any issue remains, the constituent Banks may approach the Reserve Bank of India for a workable resolution of the issue. Till such time the issues are resolved as stated above by mutual consultation or till such time the Reserve Bank of India passes orders on the specific issues raised by the petitioners, the status quo as regards the accounts of the petitioners as on the date of filing of the Writ petitions shall be maintained."

4. I am of the view that the same directions can be issued in

this case also. The Writ petition is hence disposed of in terms of

paragraph 5 of the judgment in W.P. ( C ) No.22768 of 2020, extracted

above.

Sd/-

T.R.RAVI, JUDGE dsn

APPENDIX OF WP(C) 14082/2021

PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE FRESH CERTIFICATE OF INCORPORATION OF THE PETITIONER DATED 05/10/2011 ISSUED BY THE REGISTRAR OF COMPANIES KERALA AND LAKSHADWEEP.

Exhibit P2 TRUE COPY OF THE PETITIONER'S CERTIFICATE OF REGISTRATION AS NBFC ISSUED BY THE RBI. Exhibit P3 TRUE COPY OF THE LIST OF THE BRANCHES OF VARIOUS BANKS WHERE THE VARIOUS BRANCHES OF THE PETITIONER MAINTAIN THE CURRENT ACCOUNTS.

Exhibit P4 TRUE COPY OF THE CIRCULAR NO.RBI/2020-

21/20 DOR NO.BP.BC/7/21.04.048/2020-21 DATED 06/8/2020 ISSUED BY THE SECOND RESPONDENT.

Exhibit P5 TRUE COPY OF THE CIRCULAR NO.RBI/2020-

21/62 DOR.NO.BP.BC.27/21.04.048/2020-21 DATED 02/11/2020 ISSUED BY THE SECOND RESPONDENT.

Exhibit P6 TRUE COPY OF THE LETTER DATED 01/07/2021 ISSUED BY THE STATE BANK OF INDIA.

Exhibit P6A TRUE COPY OF THE LETTER DATED 08/07/2021 ISSUED BY THE BANK OF BARODA.

Exhibit P6B         NIL.
Exhibit P6C         TRUE COPY OF THE LETTER DATED 06/07/2021
                    ISSUED BY THE DHANLAXMI BANK.
Exhibit P7          TRUE COPY OF THE REPRESENTATION DATED

09/07/2021 SUBMITTED BY THE PETITIONER TO THE THIRD RESPONDENT.

Exhibit P8 TRUE COPY OF THE CIRCULAR NO.RBI/202021/79 DOR.NO.BP.BC.30/21.04.048/2020-21 DATED 14/12/2020 ISSUED BY THE SECOND RESPONDENT.

Exhibit P9 TRUE COPY OF THE ORDER DATED 22/12/2020 IN WP(C) NO.28999/2020.