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Nikhil Mathew Vs. State Bank of India and Ors. - (High Court of Kerala) (22 May 2018)

Bank is precluded from declining benefits of Scheme as same is non-discretionary and non-discriminatory



In facts of present case, Petitioner availed a career loan from State Bank of India (the Bank) during 2007 for pursuing pilot training course. The father of the Petitioner who is an officer of the Bank was the co-applicant of the loan. It is stated by the Petitioner that, he could not secure a suitable job on completion of the course and could not therefore liquidate the loan liability as agreed. Nevertheless, it is stated by the Petitioner that he has paid during the last 10 years about Rs. 26 lakhs in the loan account.

While so, the Bank has issued communication to the Petitioner informing him that, it has brought into force a One Time Settlement Scheme called 'Rinn Samadhan-II Scheme' (the Scheme); that, the Scheme offers significant reliefs to the borrowers and that the Petitioner is free to avail the benefits of the Scheme for the purpose of settling his loan liability. On receipt of Exhibit P6, the Petitioner though sent a communication to the Bank expressing willingness to settle the liability in terms of the Scheme, the request made by the Petitioner in this regard was turned down by the Bank in terms of Exhibit P7 communication stating that, the loan being a staff loan, it cannot be settled in terms of the Scheme. The Petitioner is aggrieved by the said decision of the Bank and hence, present writ petition. The short question falls for consideration therefore is whether the Bank is justified in declining the benefit of the Scheme to the petitioner for the reason that his father, who is the co-applicant of the loan, is an officer of the Bank.

There is no dispute to the fact that, the loan liability of the Petitioner satisfies all the eligibility criteria in terms of the Scheme, otherwise, the Petitioner would not have been issued Exhibit P6 communication by the Bank. The Bank has no case that, said liability falls within any of the exclusions made in terms of the Scheme. The Scheme does not also contain any reservation as regards the loans of which the officers/employees of the Bank are co-applicants.

It is stated in the Scheme itself that, it is a non-discretionary and non-discriminatory one. Discretion being one's own judgment as to what is best in a given case, as opposed to a rule governing all cases of a certain kind, it is clear that, by making the Scheme as a non-discretionary, the bank has proclaimed that it will not have the right to decline a request for benefits of the Scheme, if the case would otherwise fall within the parameters of the Scheme. Further, by making the Scheme non-discriminatory also, the Bank has reinforced its stand that the borrowers who are satisfying the parameters of the Scheme will not be denied the benefits of the Scheme on any ground whatsoever. A similar issue came up for consideration before the Apex Court in Sardar Associates and others v. Punjab and Sind Bank and others. It was also a case dealing with a non-discretionary and non-discriminatory one time settlement scheme. The Apex Court held in the said case that, the bank was not justified in declining the benefits of the scheme to the party involved in the said case.

The learned counsel for the Bank also contended that, in order to claim a writ of mandamus in proceedings under Article 226 of the Constitution, there must be a legal right with the party asking for the writ to compel the performance of some statutory duty cast upon the authorities. The power of present Court under Article 226 of the Constitution has been succinctly stated in the Comptroller and Auditor General of India, Gain Prakash, New Delhi and another vs. K.S. Jagannathan and another [MANU/SC/0066/1986 : AIR 1987 SC 537]. It was observed that, "there is thus no doubt that, the High Courts in India exercising their jurisdiction under Article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the Government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the Government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the Court may itself pass an order or give directions which the Government or the public authority should have passed or given had it properly and lawfully exercised its discretion." In the light of the judgment, the contention of the Bank is rejected. Accordingly, the writ petition is allowed and the Respondents are directed to permit the Petitioner to settle his liability under the Scheme. The Petitioner shall effect the payments due under the Scheme within one month from the date of receipt of a copy of present judgment.

Relevant : Sardar Associates and others v. Punjab and Sind Bank and others [MANU/SC/1351/2009 MANU/SC/1351/2009, Comptroller and Auditor General of India, Gain Prakash, New Delhi and another vs. K.S. Jagannathan


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