UNIMONI FINANCIAL SERVICES LTD Vs. IDBI BANK LIMITED

JUDGEMENT

(1.) The Writ Petition is filed seeking the following reliefs:

(2.) The respondents have raised a preliminary objection with respect to the maintainability of the Writ Petition. According to the respondents, IDBI is not a State or an instrumentality of State or a body which falls within the purview of Article 12 of the Constitution of India. It is stated that the respondent bank does not perform any public or statutory or sovereign function and it does not enjoy any monopoly in the banking and its function is confined to commercial activities like any other commercial bank. It is stated that though the respondent bank was registered as a banking company under the provisions of the Banking Regulation Act, 1949 and was categorised as Other Public Sector Bank by Reserve Bank of India as per letter dt.15.04.2005, after the majority of its shareholding was divested from the Central Government, it is now recategorised as a private sector bank w.e.f 21.01.2019 for regulatory purpose. It is stated that the Industrial Development Bank of India Act, 1964 provided for establishment of a development bank as contemplated in Section 2(b) r/w Section 3 of the Act. The shareholding of the said development bank was with the Central Government. Under Section 5 of the 1964 Act, the management and control of the development bank was to be exercised by the Board of Directors. Thereafter the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003 was enacted providing for transfer and vesting of the business of the development bank with the respondent bank in view of the need for giving the respondent bank sufficient autonomy to compete at par with other banks. It is stated that the Central Government does not have any deep or pervasive control over the functioning of the respondent bank and the policy decisions of functioning of the bank as well as its administrative decisions are done by the Board of Directors as in the case of any other private sector company. No ratification or approval or even reference is required from the Central Government. In the absence of any administrative or functional control by the Central Government, it is stated that it cannot be said that the respondent bank is a State or an instrumentality of State and therefore not amenable to the writ jurisdiction of this Court.

(3.) Relying on the judgment of this Court in K.K.Saxena v. International Commission on Irrigation and Drainage and Ors. [2015 (4) SCC 670], Federal Bank Ltd. v. Sagar Thomas and Ors. [2003 (10) SCC 733], the judgment in W.P(c).No.8736(W) of 2009 of Calcutta High Court, State of U.P. v. Bridge and Roof Co. (India) Ltd. [1996 KHC 950] and Bareilly Development Authority v. Ajai Pal Singh [1989 KHC 270] it is stated that there is no element of public duty involved in the matter and no writ will lie in respect of commercial transaction. The judgement in Rajbir Surajbhan Singh v. The Chairman, Institute of Banking Personnel Selection, Mumbai [2019 (14) SCC 189] was also relied on in support of the contention that the Writ Petition is not maintainable.