Authorised Officer Vs Sheela Francis Parakkal (Kerala High Court)
The Kerala High Court allowed an intra-court writ appeal and held that writ jurisdiction under Article 226 cannot be invoked against a private commercial bank, as such banks are not “State” or an instrumentality of the State within the meaning of Article 12 of the Constitution. The appeal challenged a Single Judge’s order that had entertained a writ petition against a private bank, declared that the bank had no authority to retain original title deeds after closure of a loan account, declined a direction to release the documents due to their non-availability, rejected compensation while reserving liberty to approach another forum, and imposed costs of ₹50,000 on the bank.
The Division Bench examined the maintainability of the writ petition and noted that the Single Judge had proceeded to grant reliefs without addressing this threshold issue. Relying on settled Supreme Court and High Court precedents, the Court reiterated that private banks ordinarily do not discharge public functions or public duties merely because they are regulated by the Reserve Bank of India. Regulatory oversight, by itself, does not convert private banking activity into a public function amenable to writ jurisdiction.
The Court referred to authoritative rulings explaining the “function test” for maintainability of writs against private bodies, emphasizing that a writ may lie only where a private entity is entrusted with a statutory public duty or performs functions of public importance closely associated with governmental functions. It was observed that the duties of a private bank are confined to its customers, borrowers, and employees, and its actions do not bind the public at large. Accordingly, a private commercial bank cannot be treated as “State” under Article 12, nor can it be subjected to writ jurisdiction under Article 226 in routine commercial disputes.
