Madras High Court
S.Rajagopalan vs The Housing Development Finance on 5 January, 2022
W.P.No.15797 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 05.01.2022
CORAM
THE HONOURABLE MR.JUSTICE G.K.ILANTHIRAIYAN
W.P. No.15797 of 2021
S.Rajagopalan ... Petitioner
-Vs-
1. The Housing Development Finance
Corporation Ltd., (HDFC)
Rep. by its Legal Head CFO,
Ramon House, HT Parekh Marg,
No.169, Backbay Reclamation,
Churchgate, Mumbai – 400 020.
2. The Deputy General Manager,
HDFC Bank Limited,
HOD – Credit Risk Management,
ITC Centre, II nd Floor,
No.760, Anna Salai,
Chennai – 600 002. ... Respondents
Prayer :- Writ Petition filed under Article 226 of the Constitution of India
praying for the issuance of a Writ of Mandamus, to direct the respondents to
dispose the petitioner representation dated 03.05.2021. The extent to be one
time settlement offer and the two, 1. Maraimalai Nagar property survey
No.393/3, patta No.689 new survey No.393/3A1 H2. 2. Mohan Ram Nagar,
Mogapair Village, survey No.256, old survey No.256/1A1A, and split the
property Mohan Ram Nagar, Mogapair Village, in accordance with law.
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W.P.No.15797 of 2021
For Petitioner : Mr.G.Radha Krishnan
for Mr.P.Asai Thambi
For Respondents : Mr.K.J.Parthasarathy
ORDER
The Writ Petition has been filed to direct the respondents to
dispose the petitioner representation dated 03.05.2021. The extent to be one
time settlement offer and the two, 1. Maraimalai Nagar property survey
No.393/3, patta No.689 new survey No.393/3A1 H2. 2. Mohan Ram Nagar,
Mogapair Village, survey No.256, old survey No.256/1A1A, and split the
property Mohan Ram Nagar, Mogapair Village, in accordance with law.
2. The petitioner filed this Writ Petition to direct respondents to
dispose his representation dated 03.05.2021. On perusal of the representation
dated 03.05.2021, the petitioner extended one time settlement with regard to
two properties, comprised in survey No.393/3, new survey No.393/3A1 H2
situated at Maraimalai Nagar, under patta No.689 and another land comprised
in survey No.256, old survey No.256/1A1A, situated at Mohan Ram Nagar,
Mogapair Village. The petitioner and his brother obtained home loan from the
respondents bank by mortgaging the above two properties. Due to loss in his
business, the petitioner is not able to maintain the financial difficulties and one
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W.P.No.15797 of 2021
of the creditors filed petition before the National Company Law Tribunal and
appointed Resolution Professional by an order dated 21.10.2019 and the
company was also closed. Thereafter, the petitioner was not able to repay the
loan amount. Therefore, the petitioner requested the respondents to settle the
loan amount by one time settlement. On his request, the respondents issued
letter dated 27.08.2019, thereby offering one time settlement to the petitioner.
Accordingly, the petitioner has to settle the loan amount of Rs.2,25,00,000/-
on or before 12.09.2019. Since the petitioner could not able to make one time
settlement and he made request on 03.05.2021 requesting to extend one time
settlement offer and to split up two properties into two parts and offer new
settlement.
3. The respondents raised preliminary objection on two floods. The
first one is that the Writ Petition itself is not maintainable and another one is
that the representation of the petitioner dated 03.05.2021 was rejected.
4. Heard Mr.G.Radha Krishnan, learned counsel appearing for the
petitioner and Mr.K.J.Parthasarathy,learned counsel appearing for the
respondents.
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W.P.No.15797 of 2021
5. Admittedly, the respondents/bank is a company registered under
the provisions of the Companies Act and not an instrumentality of state under
Article 12 of the Constitution of India. In this regard, the learned counsel
appearing for the respondents relying upon the judgment reported in 2003 (10)
SCC 733 in the case of Federal Bank Ltd., Vs. Sugar Thomas as follows :-
“26. A company registered under the
Companies Act for the purposes of carrying on
any trade or business is a private enterprise to
earn livelihood and to make profits out of such
activities. Banking is also a kind of profession and
a commercial activity, the primary motive behind
it can well be said to earn returns and profits.
Since time immemorial, such activities have been
carried on by individuals generally. It is a private
affair of the company though case of nationalized
banks stands on a different footing. There may,
well be companies, in which majority of the share
capital may be contributed out of the State funds
and in that view of the matter there may be more
participation or dominant participation of the
State in managing the affairs of the company. But
in the present case we are concerned with a
banking company which has its own resources to
raise its funds without any contribution or
shareholding by the State. It has its own Board of
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W.P.No.15797 of 2021
Directors elected by its shareholders. It works like
any other private company in the banking
business having no monopoly status at all.Any
company carrying on banking business with a
capital of five lacs will become a scheduled bank.
All the same, banking activity as a whole carried
on by various banks undoubtedly has an impact
and effect on the economy of the country in
general. Money of the shareholders and the
depositors is with such companies, carrying on
banking activity. The banks finance the borrowers
on any given rate of interest at a particular time.
They advance loans as against securities.
Therefore, it is obviously necessary to have
regulatory check over such activities in the
interest of the company itself, the shareholders,
the depositors as well as to maintain the proper
financial equilibrium of the national economy.
The Banking companies have not been set up for
the purposes of building economy of the State on
the other hand such private companies have been
voluntarily established for their own purposes and
interest but their activities are kept under check
so that their activities may not go wayward and
harm the economy in general. A private banking
company with all freedom that it has, has to act in
a manner that it may not be in conflict with or
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W.P.No.15797 of 2021
against the fiscal policies of the State and for such
purposes, guidelines are provided by the Reserve
Bank so that a proper fiscal discipline, to conduct
its affairs in carrying on its business, is
maintained. So as to ensure adherence to such
fiscal discipline, if need be, at times even the
management of the company can be taken over.
Nonetheless, as observed earlier, these are all
regulatory measures to keep a check and provide
guideline and not a participatory dominance or
control over the affairs of the company. For other
companies in general carrying on other business
activities may be manufacturing, other industries
or any business, such checks are provided under
the provisions of the Companies Act, as indicated
earlier. There also, the main consideration is that
the company itself may not sink because of its own
mismanagement or the interest of the
shareholders or people generally may not be
jeopardized for that reason. Besides taking care
of such interest as indicated above, there is no
other interest of the State, to control the affairs
and management of the private companies. The
care is taken in regard to the industries covered
under the Industries (Development and
Regulation) Act, 1951 that their production which
is important for the economy may not go down yet
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W.P.No.15797 of 2021
the business activity is carried on by such
companies or corporations which only remains a
private activity of the entrepreneurs/companies.”
The Hon'ble Supreme Court of India held that the Writ Petition is not
maintainable against the private complaint. The Reserve Bank of India lays the
banking policy in the interest of the banking system or in the interest of
monetary stability and it does not mean that the private companies carrying on
the business of or commercial activity of banking, discharge any public
function or public duty. Therefore, the Writ Petition is not maintainable and is
liable to be dismissed.
6. That apart, the Writ Petition is also become infructuous, since the
representation of the petitioner dated 03.05.2021 and follow up E-mails dated
03.06.2021 & 10.06.2021 have been replied by the respondents, thereby
rejecting the petitioner representation dated 03.05.2021. On merits also, the
one time settlement offer dated 27.08.2019, is self working as the proposal was
valid on or before 12.01.2019 with a specific clause that further extension of
time shall not be entertained. Admittedly, the petitioner failed to pay the
amount on or before 12.01.2019. After the period of two years, the petitioner
submitted his representation on 03.05.2021, seeking to review the one time
settlement offer and the same has also been rejected by the respondents.
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W.P.No.15797 of 2021
7. That apart, such direction sought for in this Writ Petition cannot
be issued, since it is ultimately for the respondents to take a conscious decision
in its own interest and to secure/recover the outstanding debts. No bank can be
compelled to accept a lesser amount under the one time settlement scheme
despite the fact that the bank is able to recover the entire loan amount by
auctioning the secured property. When the loan is disbursed by the bank and
the outstanding amount is due and payable to the bank, it will always take a
conscious decision in the interest of the bank and in its commercial wisdom.
Therefore, the Writ Petition is not maintainable and is liable to be dismissed.
8. Accordingly, the Writ Petition stands dismissed. There shall be no
order as to costs.
05.01.2022
Internet : Yes
Index : Yes/No
Speaking order/Non-speaking order
rts
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W.P.No.15797 of 2021
To
1. The Legal Head CFO,
Housing Development Finance
Corporation Ltd., (HDFC)
Ramon House, HT Parekh Marg,
No.169, Backbay Reclamation,
Churchgate, Mumbai – 400 020.
2. The Deputy General Manager,
HDFC Bank Limited,
HOD – Credit Risk Management,
ITC Centre, II nd Floor,
No.760, Anna Salai,
Chennai – 600 002.
https://www.mhc.tn.gov.in/judis
W.P.No.15797 of 2021
G.K.ILANTHIRAIYAN, J.
rts
W.P. No.15797 of 2021
05.01.2022
https://www.mhc.tn.gov.in/judis
