Charanjeet Singh vs State Of Uttarakhand And Others

Sharad Kumar Sharma, J

The petitioner is facing recovery of an amount of Rs.8,68,616 i.e. principal amount alongwith an interest which has fallen due till date, though as

against the recovery citation, no writ petition is maintainable, except subject to condition that where the bank agrees to accept the amount sought to be

recovered in accepting the same in installments. The writ court cannot interfere in fixing the installments for the reason being that extension of

financial benefits since being governed under the provisions or terms of the agreement of the loan. The High Court while exercising its extra ordinary

jurisdiction under Article 226 of the Constitution of India cannot fix the installment as the ratio which has been laid down by the Division Bench of

Hon’ble Allahabad High Court in the case of ‘Ram Kripal vs. Collector, Banda & Another’ reported in 2002 (2) UPLBEC1371 held in its

paragraph 1, which is quoted hereunder:

“1. The petitioner took a loan from respondent No. 2. Khadt Evam Gramodyog Board for running carpentary business and did not repay the same,

hence the Impugned recovery has been Issued. The petitioner has prayed for fixing easy Installments. We have held in several decisions that the High

Court cannot fix installments under Article 226 of the Constitution of India. The High Court can only Interfere in the matter where there is error of

law apparent on the face of the record. Fixing of installments is re-scheduling the impugned recovery and that cannot be done by the High Court. The

petitioner' may approach the respondent No. 2 for this purpose.â€​

It has held that in recovery proceedings the court has got no power to pray for rescheduling of the impugned recovery, which cannot be done as it is

regulated by the terms of the agreement for loan.

An identical view has been taken by the High Court of Uttarakhand at Ranchi in the case of ‘Pradip Rubber Industries vs. Bihar State Financial

Corporation and Others’, wherein, it has been held that the writ courts in Article 226 of the Constitution of India to enforce a purely contractual

matters and a prayer made by way of mandamus for refixation of the loan as granted under the terms of the contract or under OTS scheme or

rescheduling of the loan, which would really amount to be a modification of the contract, which can only be gone by mutual consent of the parties as

contemplated under Section 62 of the Contract Act. Paragraphs 19, 20, 21, 22 & 23 are quoted hereinbelow:

“19. Again in Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh : [1978]1SCR37 5(vide para-15) the Hon'ble Supreme

Court observed:

There is abundant authority in favour of the proposition that a writ of mandamus can be granted only in a case where there is a statutory duty

imposed upon the officer concerned and there is a failure on the part of that officer to discharge the statutory obligation. The chief function of a writ is

to compel performance of public duties prescribed by statute and to keep subordinate Tribunals and officers exercising public functions within the limit

of their jurisdiction. It follows, therefore, that in order that mandamus may issue to compel the authorities to do something, it must be shown that there

is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance [See Lekhraj Satramdas

Lalvani v. Deputy Custodian-cum-Managing Officer : [1966]1SCR120, Dr. Rai Shivendra Bahadur v. The Governing Body of theN alanda College :

(1962)ILLJ247SC and Dr. Umakant Saran v. State of Bihar : (1972)IILLJ580SC ]. In the instant case, it has not been shown by respondent No. 1

that there is any statute or rule having the force of law which casts a duty on respondents 2 to 4 which they failed to perform. All that is sought to be

enforced is an obligation flowing from a contract which, as already indicated, is also not binding and enforceable. Accordingly, we are clearly of the

opinion that respondent No. 1 was not entitled to apply for grant of a writ of mandamus under Article 226 of the Constitution and the High Court was

not competent to issue the same.

A Division Bench of Hon'ble Madras High Court in an identical case 'Tamil Nadu Industrial Investment Corporation Ltd. v. Millennium Business

Solutions Pvt. Limited and Anr.' as reported in II (2005) BC 79 (DB), presided over by Hon'ble Mr. Justice Markandey Katju (C.J.), as he then was,

while relying upon the aforesaid judgments held that the writ of mandamus under Article 226 of the Constitution of India in absence of any violation of

law is not maintainable, since a loan is granted in terms of a contract and grant of one time settlement can only be done by mutual consent of the

parties.

Thus, unless there is an accrued, vested, legal or statutory right and a violation thereto, a writ of mandamus under Article 226 of the Constitution of

India is not maintainable. The same is confined to enforcement of a legal and/or a statutory right and/or a public duty and not otherwise.

On consideration of the rival contentions it appears that the dispute is purely contractual and is dependant upon mutual consent of borrower and

lender. Apart from it, the same involves disputed question of facts and calculation of principal and interest component from the date of default for

repayment of loan.

In the aforesaid background and in view of the aforesaid settled law the present writ petition to enforce a purely contractual matter with a prayer

to issue a writ of mandamus under Article 226 of the Constitution of India is not at all maintainable. The loan is granted in terms of the contract and

grant of relief under OTS Scheme or rescheduling the loan amount is really a modification of the contract, which can only be done by mutual consent

of the parties vide Section 62 of the Contract Act, 1872. This Court cannot alter the terms of contract.â€​

The Madras High Court in the case of ‘Tamil Nadu Industrial Investment Coporation Ltd. Chennai vs. Millenium Business Solutions Pvt. Ltd. &

Another’ reported in AIR 2005 Madras 232 has also endorsed the view as expressed above that once it is an extension of a financial benefit

under a contract, it is only the bank or the financial institution, which can reschedule the loan or fix one time settlement or grant installments as it is a

modification of contract which can be done by mutual consent of the parties, court cannot alter the terms of the contract. Paragraph 7 of the judgment

is quoted hereinbelow:

“7. In our considered opinion it is not proper for the Court to interfere in such matters relating to recovery of loans. Such matters are contractual in

nature and writ jurisdiction is not the proper remedy for this. A writ lies when there is an error of law apparent on the face of the record, or there is

violation of law. No writ lies merely for directing one time settlement or for directing re-scheduling of the loan or for fixing instalments in connection

with the loan. It is only the bank or the financial institution which granted the loan which can re-schedule it or fix one time settlement or grant

instalments. The Court has no right under Article 226 of the Constitution to direct grant of one time settlement or for re-scheduling of the loan, or to fix

installments.â€​

In the case at hand when the matter was taken up on the previous occasion, a direction was issued to Standing Counsel to seek an instruction as to

whether actually the tractor bearing No.UK 06K 4258 and motorcycle bearing registration No.UK 06P 7408, have been ceased by the revenue

authority while resorting to the process of recovery of amount as determined under the citation. On receipt of instructions, the Standing Counsel has

made a statement that whenever revenue authorities approached the petitioner for recovering the amount he absconded due to which they were

constrained to cease motorcycle and tractor of the petitioner in question. Whereas on the other hand the instructions which has been received by

respondent-Bank, they referred the recovery proceedings and contends that the bank is in agreement to accept the installments to be fixed by this

Court subject to the condition that the petitioner pays 50% of total amount initially in the first installment then only motor cycle and tractor will be

released to him and the balance amount would be paid by him in two equal two monthly installments.

Accordingly, this writ petition stands disposed of with the following directions:-

i. The tractor and motor cycle as ceased by respondent No.2 would be released to the petitioner subject to the condition, if the petitioner pays 50% of

the total amount sought to be recovered by citation dated 15.11.2018, within a period of three months from the date of receipt of certified copy of this

order.

ii. In case, if 50% amount is deposited before the expiry of three months period as fixed by this Court for 1st Installment, the vehicles would be

released immediately and thereafter the balance amount would be paid by him in two equal two monthly installments.

iii. In case if there is any default in remittance of any of the installment as directed above, it would be open for the respondent-bank to recover the

entire amount sought to be recovered by enforcing the citation dated 15.11.2018.

Subject to above observations, the writ petition stands disposed of.