Writ jurisdiction over private scheduled bank under SARFAESI upheld, with equitable relief granted for bona fide settlement delay

A writ petition under Article 226 was held maintainable against a private scheduled bank acting under the SARFAESI framework, because the decisive test is whether the body is performing a statutory public duty rather than its private character. The Court also accepted equitable relief on the facts where the petitioners had acted under an approved one-time settlement, had made part payment, and showed bona fide readiness to pay the balance; the delay in compliance was condoned, and implementation of the settlement was directed subject to payment within the time fixed.

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Issues: (i) whether a writ petition under Article 226 of the Constitution of India was maintainable against a private scheduled bank acting under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; and (ii) whether the petitioners were entitled to relief by condonation of delay in complying with the one-time settlement and by direction to implement the settlement.

Issue (i): Whether a writ petition under Article 226 of the Constitution of India was maintainable against a private scheduled bank acting under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Analysis: The jurisdiction under Article 226 extends beyond State authorities and may be invoked against any person or body discharging a public duty or performing a public function. A mandamus can issue to compel compliance with a statutory obligation, and the decisive test is the nature of the duty performed, not merely the private character of the body. A scheduled bank governed by the Reserve Bank of India Act, 1934 and the Banking Regulation Act, 1949, when acting under the SARFAESI Act, performs duties regulated by statute and is therefore amenable to judicial review in an appropriate case. The availability of statutory remedies under the SARFAESI framework does not confer immunity from writ jurisdiction where the challenge concerns the manner of exercise of statutory power.

Conclusion: The writ petition was maintainable against the bank in the facts of the case.

Issue (ii): Whether the petitioners were entitled to relief by condonation of delay in complying with the one-time settlement and by direction to implement the settlement.

Analysis: The petitioners had acted under an accepted one-time settlement, had deposited part of the amount, and had shown continuing readiness to pay the balance. The delay occurred because of intervening personal circumstances, and the record showed bona fide efforts to honour the settlement, including tender of drafts and willingness to pay an additional amount. In these circumstances, strict insistence on the original timeline was considered harsh and unjust, and the Court accepted that equitable relief could be granted by condoning the delay and directing implementation of the settlement on payment of the additional amount within the time fixed.

Conclusion: The petitioners were held entitled to relief, and the delay was condoned subject to compliance with the payment direction.

Final Conclusion: The bank's refusal to permit completion of the settlement was set aside in substance, and the petitioners were granted equitable relief to complete the one-time settlement within the time granted by the Court.

Ratio Decidendi: A private scheduled bank is amenable to writ jurisdiction under Article 226 when it acts under a statutory framework that imposes public duties, and equitable relief may be granted to enforce a bona fide settlement where the delay in performance is satisfactorily explained.

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