Synopsis: Justices Naheed Ara Moonis and Vivek Varma also pointed out that the question of facts involved in the case before them were contested.
The Allahabad High Court recently clarified that under Article 12 of the Constitution of India, private financial institutions which may perform public duties are not protected by the concept of ‘State’.
The High Court, gave such a ruling in a writ petition against such an individual is not maintainable.
Justices Naheed Ara Moonis and Vivek Varma also pointed out that the evidence involved in the case before him were challenged. This acted as an additional factor for the Court to refuse to exercise its authority in compliance with Article 226 of the Indian Constitution.
In this case, the petitioner took out a commercial loan from a private bank and defaulted on the payment of the instalments. In the light of the COVID-19 pandemic, the petitioner urged the Court to order the bank to accept the balance of the loan sum in compliance with the circular released by the Reserve Bank of India.
Furthermore, it was demanded that the due date for payment of the instalments be extended by 6 months and that interest be exempted for that time, and that no punitive measures action be taken against the petitioner.
However, the Court noted that the Supreme Court had already ruled that private financial institutions conducting business or commercial activities may perform public duties, but may not be treated as protected by the definition of ‘State’ in accordance with Article 12 of the Constitution of India.
The Bench relied on the decision in Federal Bank Ltd. V. Sagar Thomas and others in which the Supreme Court held that while any business or commercial activity, including banking, would certainly have an impact on the economy, it was not possible to identify such activity as a public feature.
Hence, the writ petition was dismissed.