GURPREET SINGH Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS order shall dispose of the aforementioned two writ petitions filed in public interest objecting to the advertisement and the process of financing the application money by the Banks. The petitioner has sought that the Reserve Bank of India be directed to restrain all the Banks from financing money for allotment of plots/flats in CWP No.22548 of 2010, whereas, in CWP No.14001 of 2010, the petitioner has sought additional directions i.e. to provide residential accommodation to the citizens at reasonable price; not to propose master plans/urban scheme without first collecting data for actual requirement or necessities for such urban schemes in extension of cities; not to issue conversion of land use from agriculture land into urban colonies without first carrying out external development of the proposed urban area and; not to issue any license to developers or colonizers for development of urban area without getting detailed zoning and outlay plan of the areas.

(2.) THE petitioner in CWP No.22548 of 2010 claims to be a riot victim and is aggrieved against the advertisement (Annexure P-1), whereby the Banks have proposed to finance the application money required for applying for a plot/ flat on payment of the amount of interest. The petitioner alleges that such process of financing the application money is, in fact, a process of gambling inasmuch as the persons, who do not have any capacity to pay even 10% of the proposed costs, are sending applications by paying interest in advance to the Banks on the application money. Therefore, such process is a gambling, as the property dealers submit applications in speculation of allotment of plots/flats.

(3.) IN the written statement filed on behalf of respondent No.3, it has been, inter alia, averred that the Reserve Bank of India exercises control over the volume of credit, the rate of interest chargeable on loans and advances and deposits in order to ensure economic stability. It exercises various powers and discharges various statutory functions under Foreign Exchange Management Act, 1999; Banking Regulation Act, 1949 & Reserve Bank of India Act, 1934 etc. under the Banking Regulation Act, 1949. The Bank has issued a master circular on 01.07.2011 in respect of banking finance to the housing sector. Such circular is a statutory direction in terms of Section 21 and 35-A of the Banking Regulation Act, 1949. It is averred that the decision relating to loan sanctioning activities in a Bank is an internal management function and each Bank is authorized to frame suitable policies and that the instructions of the Reserve Bank of India do not come in the way of Banks sanctioning loan as referred to in the petition.