Orissa High Court
Constitution Of India vs The Chief General Manager on 25 April, 2025
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 05-May-2025 19:35:07
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 12295 of 2024
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Rabindra Kumar Patnaik .... Petitioner(s)
-versus-
The Chief General Manager, .... Opposite Party (s)
State Bank of India, Khurda &
Ors.
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr.Bidyadhar Pradhan, Adv.
For Opposite Party (s) : Mr.Dillip Kumar Mohapatra
(for O.P.2)
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-20.02.2025
DATE OF JUDGMENT:-25.04.2025
Dr. S.K. Panigrahi, J.
1. In this Writ Petition, the Petitioner seeks a direction from this Court to
compel the State Bank of India to disburse the entire sanctioned loan
amount of ₹50,00,000/- as a lump sum under the Reverse Mortgage
Loan Scheme, alleging arbitrary denial despite contractual sanction
and personal financial hardship.
I. FACTUAL MATRIX OF THE CASE:
2. The brief facts of the case are as follows:
Location: ORISSA HIGH COURT, CUTTACK
(i) The petitioner is a senior citizen and a retired employee of the State
Bank of India (SBI), currently residing in Bhubaneswar, Odisha. He is
also a pensioner of the bank, holding P.F. Index No. 0914045.
(ii) On 22.02.2023, the petitioner applied for a loan amounting to
₹50,00,000/- under the Reverse Mortgage Loan (RML) Scheme of the
State Bank of India, which is designed to provide financial support to
senior citizens by allowing them to mortgage self-acquired property
in exchange for periodic or lump sum payments. The intended use of
the loan was to repay personal debts and carry out renovations to the
petitioner's residential property.
(iii) The loan application was submitted through SBI's Forest Park Branch
and was forwarded to the Retail Assets Central Processing Centre
(RACPC), Unit-1, Bhubaneswar, for processing and approval. Based
on the bank's assessment, the application was sanctioned on
29.04.2023.
(iv) The property offered as security was valued at approximately ₹2.28
crores according to the petitioner. However, internal assessments and
Net Present Value (NPV) calculations were undertaken by the bank in
accordance with its lending norms and circulars.
(v) On 02.05.2023, the petitioner entered into a loan arrangement letter
and loan agreement with the bank, setting out the terms of
disbursement. According to these documents, a portion of the loan
was to be disbursed as a lump sum and the remaining balance was to
be released in periodic (quarterly) instalments.
Location: ORISSA HIGH COURT, CUTTACK
(vi) The petitioner contends that he was entitled to a full lump sum
disbursal of ₹50,00,000/- based on the valuation of his property and
the guidelines of the Reverse Mortgage Scheme. He claims that the
bank's NPV calculation was flawed and that the scheme allows such
full lump sum disbursement.
(vii) The bank, on the other hand, states that the Reverse Mortgage
Scheme, as per its official policy, limits lump sum disbursement to the
lower of 50% of the NPV or ₹15,00,000/-. It asserts that the petitioner
contractually agreed to these terms, which were clearly recorded in
the arrangement letter and agreement.
(viii) On 06.05.2023, an amount of ₹15,00,000/- was disbursed to the
petitioner as a lump sum. The petitioner claims this was insufficient
and continues to seek the release of the remaining sanctioned amount
in one go, i.e., ₹35,00,000/-.
(ix) The petitioner made multiple requests to the concerned SBI officials,
including a formal appeal under the bank's "SamadhanPakhwada"
grievance mechanism on 12.05.2023. SBI responded on 15.09.2023,
reiterating that the lump sum disbursement limit had been complied
with as per policy.
(x) Dissatisfied with the bank's response, the petitioner approached the
Banking Ombudsman of the Reserve Bank of India on 16.10.2023. The
Ombudsman dismissed the complaint on 12.01.2024, stating that the
grievance involved a commercial judgment of the bank, which falls
outside the Ombudsman's jurisdiction.
Location: ORISSA HIGH COURT, CUTTACK
(xi) The petitioner contends that the non-disbursement of the full loan
amount has caused him significant hardship, especially in view of his
age and the purpose for which the loan was sought. He alleges that
SBI has acted in violation of the spirit and intent of the RML Scheme,
which is aimed at senior citizen welfare.
(xii) SBI maintains that it has complied fully with both the terms of the
contract and the policy norms of the RML Scheme, and that any
further lump sum disbursal would be inconsistent with the agreed-
upon loan documentation and bank guidelines.
(xiii) The petitioner, asserting that he has no other efficacious legal remedy,
has approached this Court under Articles 226 and 227 of the
Constitution of India, seeking a writ directing the SBI to disburse the
entire sanctioned loan amount of ₹50,00,000/- as a lump sum.
II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
3. Learned counsel for the Petitioner earnestly made the following
submissions in support of his contentions:
(i) The petitioner contends that the sanctioned loan amount of Rs.
50,00,000/- was not disbursed in full, and only Rs. 15,00,000/- was
provided on 06.05.2023. Despite multiple efforts, the remaining Rs.
35,00,000/- has not been disbursed by the bank.
(ii) The petitioner claims that the bank's calculation of the Net Present
Value (NPV) was incorrect, leading to the wrong sanctioned loan
amount. The petitioner argues that the qualifying loan amount should
have been Rs. 75,00,000/- as per the bank's own guidelines.
Location: ORISSA HIGH COURT, CUTTACK
(iii) The petitioner asserts that despite repeated appeals to various
authorities within the bank, including the Assistant General Manager,
the bank has failed to disburse the full loan amount.
(iv) The petitioner has raised the issue with the Banking Ombudsman, but
the complaint was closed without due consideration of the petitioner's
grievance, violating the norms of the Reverse Mortgage Loan Scheme.
(v) The petitioner argues that the Reverse Mortgage Loan Scheme is
intended to provide senior citizens with funds for personal loans and
home renovations. The non-disbursement of the full sanctioned
amount goes against the objectives of the scheme.
(vi) The petitioner has no other legal recourse and has invoked the writ
jurisdiction of this Hon'ble Court to seek redressal of the grievance
and to ensure the disbursement of the full loan amount as per the
terms of the sanctioned loan.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:
4. The Learned Counsel for the Opposite Parties earnestly made the
following submissions in support of his contentions:
(i) The petitioner voluntarily entered into a loan arrangement and
agreement, both dated 02.05.2023, wherein it was clearly stated that
the lump sum disbursal would be Rs. 8,74,504/-, and the rest would be
paid periodically. Despite this, the bank disbursed a higher lump sum
of Rs. 15,00,000/- as a gesture of flexibility.
(ii) The demand for disbursal of the remaining Rs. 35,00,000/- as a single
payment is in direct violation of the agreed terms and the official SBI
Reverse Mortgage Loan Scheme. Such a demand is unreasonable,
Location: ORISSA HIGH COURT, CUTTACK
contrary to bank policy, and outside the scope of permissible
disbursement.
(iii) The petitioner's repeated claims that the bank has failed to act or that
it has ignored his grievances are false. The bank has responded
appropriately to all complaints, both under the "SamadhanPakhwada"
mechanism and via the official reply provided by the Ombudsman
process.
(iv) The petitioner's calculations or interpretations of loan eligibility and
NPV are self-derived and do not align with the official guidelines or
the contractual terms signed by him. The petitioner is estopped from
raising these claims after voluntarily accepting and benefiting from
the loan disbursement under the agreed terms.
(v) The petitioner is not entitled to claim further lump sum disbursement
beyond Rs. 15,00,000/- and the bank is obligated to disburse the
remaining amount only through quarterly payments, subject to
request and in line with the terms of the arrangement letter and loan
agreement.
IV. COURT'S REASONING AND ANALYSIS:
5. Heard Learned Counsel for parties and perused the documents placed
before this Court.
6. The dispute primarily concerns a reverse mortgage loan availed by
the petitioner from the SBI, where the petitioner seeks full lump sum
disbursement of ₹50,00,000/- despite having entered into a loan
agreement specifying different disbursal terms.
Location: ORISSA HIGH COURT, CUTTACK
7. It is not in dispute that the petitioner voluntarily executed a loan
arrangement letter and agreement dated 02.05.2023, wherein the
agreed mode of disbursement comprised a partial lump sum amount
and the remainder in periodic installments. Notwithstanding this
agreement, the petitioner seeks judicial intervention under Article 226
to direct the bank to release the entire sanctioned amount as a lump
sum, alleging hardship and deviation from the intended spirit of the
RML scheme.
8. The petitioner has heavily relied upon the objective of the Reverse
Mortgage Loan Scheme, which is indeed welfare-oriented and
intended to support senior citizens in financial need. However, this
Court is of the opinion that policy objectives cannot override the
specific contractual terms freely agreed upon by the parties,
particularly when the policy itself caps lump sum disbursal limits.
9. It is now a well-established principle of law that disputes arising out
of lending contracts and loan terms are matters quintessentially suited
to the domain of civil adjudication, unless there is a clear
demonstration of mala fide intent or a breach of statutory obligation.
Even when a public sector entity is involved, what governs judicial
scrutiny is not merely the status of the body but the nature of the
function it performs. The determinative test lies in whether the act in
question bears the hallmark of a public duty or is merely a
commercial transaction cloaked in administrative form.
Location: ORISSA HIGH COURT, CUTTACK
10. In this regard, the Supreme Court, while substantiating on this stance,
in the case of LIC of India v. Escorts Ltd.1 held as follows:
"The question must be decided in each case with reference to
the particular action, the activity in which the State or the
instrumentality of the State is engaged when performing the
action, the public law or private law character of then action
and a host of other relevant circumstances."
11. This stance was reiterated by the Supreme Court in the recent case of
S. Shobha v. Muthoot Finance Ltd.2wherein it was held as follows:
"7. Applying the above test, the respondent herein cannot be
called a public body. It has no duty towards the public. It's
duty is towards its account holders, which may include the
borrowers having availed of the loan facility. It has no power
to take any action, or pass any order affecting the rights of
the members of the public. The binding nature of its orders
and actions is confined to its account holders and borrowers
and to its employees. Its functions are also not akin to
Governmental functions.
8. A body, public or private, should not be categorized as
"amenable" or "not amenable" to writ jurisdiction. The
most important and vital consideration should be the
"function" test as regards the maintainability of a writ
application. If a public duty or public function is involved,
any body, public or private, concerned or connection with
that duty or function, and limited to that, would be subject
to judicial scrutiny under the extraordinary writ
jurisdiction of Article 226 of the Constitution of India."
12. Applying the abovementioned judicial precedents to the case in hand,
it becomes abundantly clear that the petitioner's grievance arises not
AIR 1986 SC 1370
2025 INSC 117.
Location: ORISSA HIGH COURT, CUTTACK
from a breach of statutory duty but from a contractual disagreement
over the mode and quantum of disbursement, a matter governed
entirely by the terms of the Reverse Mortgage Loan agreement
voluntarily executed between the parties.
13. The petitioner, though a senior citizen and entitled to protection
under welfare schemes, cannot seek equitable relief from a writ court
to rewrite commercial terms that are neither demonstrably unlawful
nor arbitrary. What the petitioner perceives as unfair stems from
commercial expectations, not from any violation of a public law duty.
The function exercised by the State Bank of India in this context,
evaluating loan eligibility, determining Net Present Value, and
disbursing funds, is purely financial and internal in nature, not one
imbued with any statutory or public character that would invite
intervention under writ jurisdiction.
14. Indeed, the bank's decision to disburse ₹1500000 as a lump sum,
despite the agreement indicating ₹874504, reflects a degree of
administrative accommodation rather than rigidity. The petitioner's
continued insistence on a complete lump sum disbursement of
₹5000000 lacks both contractual basis and legal sustainability.
15. This Court is conscious of the formidable reach of Article 226 of the
Constitution. It stands as a sentinel against public wrongs and a
guardian of constitutional values. Yet, it is not an avenue to recast
private contracts or to substitute judicial discretion for commercial
judgment enshrined within the domain of regulated financial policy.
The power vested in this Court is not to be invoked for altering the
Location: ORISSA HIGH COURT, CUTTACK
contours of an agreement merely because one party, post facto, finds
the outcome inconvenient or inequitable.
16. If courts were to intervene in structured lending arrangements,
especially in welfare oriented financial schemes such as the Reverse
Mortgage Loan, they risk upsetting the careful balance between
protecting senior citizens and maintaining the financial discipline
these schemes require. The purpose of such programs is not defeated
by the enforcement of reasonable safeguards or limitations,
particularly when those conditions have been accepted voluntarily.
The role of the Court is not to supervise commercial contracts or to
second guess banking policies in the absence of any breach of public
duty. Where parties have acted with awareness and mutual consent,
the Court must be cautious not to intrude into what is essentially a
private regulated transaction.
17. A word of caution must be noted for the petitioner and, by extension,
for those who have advised and represented him. The remedies
available under the Constitution are not intended to be applied to
every dispute that arises out of a commercial transaction. The writ
jurisdiction of this Court is an exceptional remedy, not a replacement
for appropriate legal avenues or a means to revisit commercial
decisions made within the bounds of law. Those who come before this
Court, especially with the guidance of legal counsel, are expected to
do so with thoughtfulness and respect for the limited and serious
nature of this jurisdiction.
Location: ORISSA HIGH COURT, CUTTACK
V. CONCLUSION:
18. In summation, no violation of law, statutory duty, or fundamental
rights has been demonstrated. What is at stake is a disagreement over
expectations, not a breach of constitutional guarantees. The Petitioner,
having accepted the terms and benefited from partial disbursement,
cannot now approbate and reprobate the agreement.
19. Accordingly, this Court finds no merit in the present petition. The
Writ Petition stands dismissed.
20. Interim order, if any, passed earlier stands vacated.
(Dr.S.K. Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 25th April, 2025/
