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TMI Blog2023 (3) TMI 1533X X X X Extracts X X X X X X X X Extracts X X X X ..... hat date. The petitioners also seek setting aside of the order passed by the District Magistrate of 18.4.2022 under section 14 of the SARFAESI Act, 2002. 2. A prayer for an ad-interim protection was refused by this Court by the order dated 22.8.2022. The petitioners were directed to avail of the remedies available to the petitioners under the SARFAESI Act, 2002. The petitioners have filed appropriate applications before the Debts Recovery Tribunal for that part of the petitioners' claim. 3. Therefore, the only question which is before the Court is whether the petitioners are entitled to grant of the benefit of the ECLGS and whether the respondent no. 3 (R3) which is a private Financial Institution comes within the jurisdiction of a Writ Court for issue of a writ of Mandamus against the respondent no. 3. 4. The first question which should be dealt with is whether the R3 is amenable to writ jurisdiction under Article 226 of the Constitution of India. 5. The argument is that the respondent no. 3 Financial Institution (FI) is a private entity who does not fall within the definition of "state" under Article 12 or "person or authority" under Article 226 of the Constitution and would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Scheme on behalf of the Government of India and the respondent is discharging its duty and acting as a nodal agency of the State in extending the benefit of the Scheme to its eligible borrowers. 8. It may also be stated that RBI circulars have statutory force and are binding on the constituent Banks and FIs who are under a statutory obligation to comply with the mandates of the circular, refer: Central Bank of India vs. Ravindra; (2002) 1 SCC 376 where the Supreme Court held that the power conferred by sections 21 and 35-A of the Banking Regulation Act, 1949 is coupled with a duty to act and that the Reserve Bank of India, as the prime banking institute of the country, is entrusted with a supervisory role and is empowered to issue binding directions having statutory force in the interest of public. 9. Moreover, the Supreme Court has held in several decisions that a body which performs public or statutory duties for the benefit of the public would fall within the scope of Article 226. In Federal Bank Ltd. Vs. Sagar Thomas: (2003) 10 SCC 733, the Supreme Court also made an exception for a private company or a person where such an entity may be amenable to writ jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Learned counsel appearing for the R3 Financial Institution submits that the writ petition was filed primarily for setting aside the order passed by the District Magistrate on 18.4.2022 under section 14 of the SARFAESI Act, 2002. Counsel submits that the eligibility criteria under the Scheme is subject to the DPD (Days Past Dues) and the classification of the account as SMA-1 and SMA-2. Counsel submits that the petitioners had every option to apply under the Scheme but chose not to. Counsel submits that the petitioner no. 1 maintains the two loan accounts with the R3 and that the petitioners exceeded the DPD by 60 days and also submits that the petitioners failed to make payments after 26.12.2019. Further, the petitioners made continuous default in the payment of instalments which rendered the petitioners ineligible for any benefit under the Scheme. Counsel submits that the ECLGS on 23.5.2020 was modified on 26.11.2020 which incorporated an opt-in facility which means that the person must make an application for obtaining the benefit of the Scheme 15. The objection taken on behalf of the R3 with regard to the primary relief claimed in the writ petition has become academic sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total credit outstanding as on 29.2.2020 was Rs. 3 crores the petitioner was entitled to receive 40% of the 3 crores i.e. Rs. 1.20 crores. The petitioners were otherwise entitled to 20% of Rs. 3 crores under ECLGS 1.0 which is 60 lakhs. It must also be noted that since the credit facility required to be granted under the Scheme is by way of a pre- approved loan, 100% of which was guaranteed by the National Credit Guarantee Trustee Company Limited (Ministry of Finance, Government of India), every eligible borrower was statutorily entitled to additional credit facility approved under the Scheme. 19. Moreover, contrary to the allegation made on behalf of the FI, the Scheme does not require an eligible borrower to apply for the approved credit facility under the Scheme. The relevant part of the Scheme shows that lending institutions shall ensure that the benefit of the Scheme is extended to borrowers having stress on account of Covid-19. This would appear from the Resolution Framework issued by the RBI for Covid-19 related stress on 6.8.2020. There is nothing in the Resolution Framework issued by RBI to require a borrower to apply for the benefit of the Scheme. 20. Moreover, FAQ 11 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Olive Tree Retail Private Limited vs. South Indian Bank Limited; 2023 SCC OnLine Cal 143 with reference to the ECLGS. The material shown to this Court by the respondent does not persuade this Court to come to a different view in the present facts. 24. WPA 12769 of 2022 is accordingly allowed by directing the R3 Financial Institution to consider grant of benefit of the ECLGS to the petitioners in terms of the Resolution Framework/s circulated by the RBI and the Guidelines published by the NCGTC on 30.3.2022 with regard to the ECLGS. The eligibility of the petitioners shall be considered in accordance with the relevant ECLGS and the Resolution Framework which would apply to the petitioners' case. The respondent no. 3 shall complete the entire exercise within an appropriate time frame so that the Scheme remains subsisting and relevant as far as the petitioner is concerned. 25. The writ petition is disposed of accordingly. 26. The prayer for stay of the judgment made on behalf of the Financial Institutions is considered and refused. Urgent Photostat certified copies of this judgment if applied for be supplied to the respective parties upon fulfilment of requisite formalities. X X X X Extracts X X X X X X X X Extracts X X X X
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