MAHASEMAM TRUST Vs. UNION OF INDIA

JUDGEMENT

(1.) The writ petitioner is a registered public trust. Its activities include micro-financing women Self Help Groups. It is a Non-Banking Finance Company (NBFC). The petitioner is a client of the third respondent which is a credit rating agency. The rating agency has downgraded the petitioner's bank loans' rating to 'IND BB+' from 'IND BBB-'. The petitioner has been availing term loans from various banks and has fixed ambitious targets for the coming year. The petitioner's track record of repayment is claimed to be very good. Following Covid-19 pandemic outbreak, the Reserve Bank of India has announced moratorium for the period upto 31st May, 2020 vide Circular dated 27.03.2020. Pursuant thereto, the petitioner has also granted the benefit of moratorium to all the joint liability Self Help Groups, in order to enable them to tide over the economic fallout arising out of the pandemic disruption.

(2.) Securities and Exchange Board of India (SEBI) has also issued policy Circular dated 30.03.2020 setting out relaxation norms. According to the petitioner, the third respondent has downgraded the petitioner's rating disregarding the said Circular. Since this will have direct bearing on the capacity of the petitioner to raise loans from the banking institutions, this writ petition came to be filed.

(3.) The third respondent whose communication is under challenge has filed its counter affidavit contesting the very maintainability of this writ petition. The third respondent would point out that the writ petition has to be dismissed as infructuous. What has been questioned is only the e-mail communication. The rating has been subsequently published in the website of the third respondent on 21.04.2020. Therefore, nothing survives for further adjudication. The third respondent cannot be considered as a State within the meaning of Article 12 of the Constitution of India. Hence it is not amenable to writ jurisdiction. The relationship between the petitioner and the third respondent is purely contractual in nature. The agreement between the parties is known as rating agreement. A dispute arising out of rating agreement cannot be resolved in writ proceedings. The petitioner is also having effective alternative remedies both under the contract as well as under the statute.