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TMI Blog2003 (4) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Mr. M.B. Kotak, the learned Counsel for the petitioner strenuously and vehemently argued before us that the social welfare is the constitutional duty of the State. In India no welfare work is done for ageds except retiring them from work and making them dependent upon others. There is no social security system. Old aged is refuge of variety of illnesses. Forty per cent of the ageds in India live under poverty line. The medical care for aged is almost negligible. The number of senior citizens in India exceeds 7.5 crore. In this background, it is the constitutional duty and obligation of the regulatory authority like R.B.I. and policy makers to ensure that reasonable rate of interest is given by the banks on the deposits. It is also contended by Mr. M.B. Kotak, the learned Counsel for the petitioner that by not giving adequate and reasonable interest on the deposits, the banks are virtually exploiting the depositors. He would urge that the bank must not be allowed to penalise the account holders if their balance falls below minimum balance which is arbitrarily fixed by them. 3. Mr. M.B. Kotak placed reliance on State of Haryana v. Darshana Devi 1979 ACJ 205 in support of his su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present saving deposit rate is fixed marginally higher than the average inflation rate of 3.34 per cent for 2002-2003. Giving the details of select international interest rates, it is submitted by the R.B.I. that Indian economy to be globally competitive, it is desirable that interest rates in India are comparable to interest rates in other major low inflation countries. The R.B.I. submitted that one of the objectives of monetary policy in India is to impart greater flexibility to the interest rate structure in the medium term. In line with monetary easing measures and also the declining trend of inflation rate world wide, nominal interest rates has fallen in India. It is submitted that Government of India has reduced the small savings rates during the recent years. These rates are currently linked to the average yields of the Government securities of corresponding maturities that are traded in the secondary market. It is submitted by the R.B.I. that one of the reasons for relatively modest decline in short term deposit rate relate to the implicit floor-set by the savings deposit rate. Most of the bankers in the regular meetings with the R.B.I. felt that saving deposit rate should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulator and it forms banking policy. Such banking policy is specified by R.B.I. from time to time in the interest of banking system or monetary stability or sound economic growth. While formulating banking policy, R.B.I. gives due regard to the interest of deposits and other resources of the bank and need for equitable allotment and efficient use of these deposits and resources. The 'banking policy' as the definition itself suggests is in the nature of policy. It is formulated by the Reserve Bank keeping in view: (i) interest of depositors, (ii) volume of depositors, (iii) other resources of the bank, (iv) need for equitable allocation, (v) efficient use of these deposits and resources. We are afraid while sitting in the writ jurisdiction under Article 226 this Court would not examine the merits of policy to find out that there could have been better policy and interfere with such policy. Banking policy requires economic and fiscal expertise. The experts who are qualified to address the issue relating to interest rate on bank deposits take into consideration the norms and parameters suggested in section 5(ca). On matters affecting policy and those requiring expertise, the Court sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed thus:- "What we said in that case in regard to legislation relating to economic matters must apply equally in regard to executive action in the field of economic activities, though the executive decision may not be placed on as high a pedestal as legislative judgment in so far as judicial deference is concerned. We must not forget that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call 'trial and error method' and, therefore, its validity cannot be tested on any rigid 'a priori' considerations, or on the application of any strait jacket formula. The court must while adjudging the constitutional validity of an executive decision relating to economic matters grant a certain measure of freedom or 'play' in the 'joints' to the executive. 'The problem of Government' as pointed out by the Supreme Court of the United States in Metropolis Theatre Co. v. State of Chicago 1912 57 Led 730 'are practical ones and may justify, if they do not require, rough accommodations, illogical, it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not discernible, the wisdom of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suffered substantially, but this problem has to be addressed by policy makers and early it is down, better it is. We fervently hope that the concerned authorities shall address this issue for welfare of large number of ageds and senior citizens in the country. 11. We do not find it necessary to refer to the judgments cited by the learned Counsel for the petitioners individually as in our considered view none of those judgments has direct relevance or bearing on the questions raised in this writ petition. We remind ourselves of the classic statement of the Privy Council in Quinn v. Leathem 1901 AC 495 that a case is only an authority for what it actually decides and not what seems to logically follow from it. The judgments referred to, relied upon and cited by the learned Counsel for the petitioners relate to controversy raised therein concerning interest in claim cases and has nothing to do with the interest rate fixed by monetary regulator. 12. We may also observe that while hearing the writ petition, we have taken into consideration the amendments proposed by the petitioner in the civil application treating it as part of the writ petition. With the aforesaid observations, we d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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