Case Note & Summary
The Reserve Bank of India (RBI) filed a writ appeal challenging an order of a Single Judge of the High Court of Karnataka, Kalaburagi Bench, dated 22.03.2024 in W.P.No.208494 of 2017. The Single Judge had allowed the writ petition filed by Shri Sanjukumar @ Sanjeevkumar, directing the RBI to consider his representations (Annexures-F, G) for one-time settlement of a loan. The RBI argued that the writ petition was not maintainable as there was no statutory duty on the RBI to consider such representations, and the circulars on one-time settlement were merely guidelines. The Division Bench, comprising Justice S. Sunil Dutt Yadav and Justice Ramachandra D. Huddar, allowed the appeal, setting aside the Single Judge's order. The court held that a writ of mandamus cannot be issued to compel a statutory authority to exercise a discretionary power in a particular manner. The RBI's circulars on one-time settlement do not create a vested right in the borrower, and the RBI has no statutory duty to entertain such representations. The court emphasized that the RBI's power under Section 35A of the Reserve Bank of India Act, 1934 is discretionary. The appeal was allowed, and the writ petition was dismissed.
Headnote
A) Constitutional Law - Writ of Mandamus - Discretionary Power - A writ of mandamus cannot be issued to compel a statutory authority to exercise a discretionary power in a particular manner. The court held that the RBI's circulars on one-time settlement are guidelines and do not create a vested right in the borrower to seek settlement. (Paras 5-8)
B) Banking Law - Reserve Bank of India Act, 1934 - Sections 35A, 35AB - One-Time Settlement - The RBI's power to issue directions under Section 35A is discretionary and not mandatory. The court held that the RBI cannot be directed to consider a representation for one-time settlement as it has no statutory duty to do so. (Paras 5-8)
Issue of Consideration
Whether the High Court could issue a writ of mandamus directing the Reserve Bank of India to consider the petitioner's representation for one-time settlement of a loan, and whether the RBI has a statutory duty to entertain such representations.
Final Decision
The writ appeal is allowed. The order dated 22.03.2024 passed by the Single Judge in W.P.No.208494 of 2017 is set aside. The writ petition stands dismissed.
Law Points
- Writ of mandamus cannot be issued to compel a statutory authority to exercise a discretionary power in a particular manner
- RBI's circulars on one-time settlement are guidelines and not mandatory
- no vested right to seek loan settlement
Case Details
2024 LawText (KAR) (09) 5
WA No.200185 of 2024 (GM-RES)
Justice S. Sunil Dutt Yadav, Justice Ramachandra D. Huddar
Sri B.C.Thiruvengadam, Senior Advocate for Sri Manik B.T. and Sri Ajay Jawali, Advocates for appellants; Sri Sudhir Singh R. Vijapur, DSGI for R2; Sri Ashok B. Mulage, Advocate for R1
Reserve Bank of India, Through its General Manager, Central Office Building, Mumbai and Regional Director for Karnataka, Bangalore
Shri Sanjukumar @ Sanjeevkumar S/o Shri Revansiddappa Kod and Union of India
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Nature of Litigation
Writ appeal against order directing RBI to consider representation for one-time settlement of loan
Remedy Sought
Setting aside the order of the Single Judge dated 22.03.2024 in W.P.No.208494 of 2017
Filing Reason
The Single Judge allowed the writ petition and directed RBI to consider the petitioner's representations for one-time settlement
Previous Decisions
Single Judge order dated 22.03.2024 in W.P.No.208494 of 2017 allowing the writ petition
Issues
Whether a writ of mandamus can be issued to direct RBI to consider a representation for one-time settlement of a loan?
Whether RBI has a statutory duty to entertain such representations under the Reserve Bank of India Act, 1934?
Submissions/Arguments
Appellant (RBI): The writ petition was not maintainable as there is no statutory duty on RBI to consider representations for one-time settlement; circulars are guidelines and not mandatory.
Respondent (Petitioner): The RBI should consider the representation as per its own circulars on one-time settlement.
Ratio Decidendi
A writ of mandamus cannot be issued to compel a statutory authority to exercise a discretionary power in a particular manner. The RBI's circulars on one-time settlement are guidelines and do not create a vested right in the borrower. The RBI has no statutory duty to entertain representations for one-time settlement under the Reserve Bank of India Act, 1934.
Judgment Excerpts
A writ of mandamus cannot be issued to compel a statutory authority to exercise a discretionary power in a particular manner.
The RBI's circulars on one-time settlement are guidelines and do not create a vested right in the borrower.
Procedural History
The respondent filed W.P.No.208494 of 2017 before the High Court of Karnataka, Kalaburagi Bench, seeking direction to RBI to consider his representations for one-time settlement. The Single Judge allowed the writ petition on 22.03.2024. The RBI filed the present writ appeal under Section 4 of the Karnataka High Court Act, 1961 challenging that order.
Acts & Sections
- Reserve Bank of India Act, 1934: 35A, 35AB
- Karnataka High Court Act, 1961: 4
