Holding

The definition of "bank" in the Central Interest Subsidy Scheme must be interpreted to include all financial institutions, both State and Central, to give relief to the riot‑affected borrowers.

Summary

The petitioners, Sikh victims of the November 1984 riots, had received loans from nationalised banks that were promised to be converted into grants, but the banks later began recovery proceedings. They argued that the right to livelihood under Article 21 of the Constitution barred such recovery and sought inclusion of all financial institutions within the definition of "bank" under the Reserve Bank of India's Central Interest Subsidy Scheme. The Supreme Court examined the humanitarian context, the purpose of the Scheme, and the contractual obligations, concluding that the omission of financial institutions was inadvertent and that the Scheme's spirit required their inclusion. Consequently, the Court directed the Union of India and the RBI to treat all financial institutions as banks for the purpose of the subsidy. The order effectively protected the petitioners from loan recovery and extended the interest relief to loans from financial institutions.

Issues considered

Whether the definition of "bank" in the Central Interest Subsidy Scheme for November 1984 riot‑affected borrowers should be expanded to include all financial institutions.
Whether the petitioners' right to livelihood under Article 21 can be invoked to restrain banks from recovering loans that were represented as grants.
Whether humanitarian considerations justify overriding ordinary contractual obligations in this context.

Subjects

Article 21right to livelihoodCentral Interest Subsidy Scheme1984 anti‑Sikh riotsbank definitionfinancial institutionshumanitarian reliefloan recoverycontempt proceedings

Judgment

f'~ ---
A HARJIT SINGH AND ORS.
v.
UNION OF INDIA AND ORS.

DECEMBER 17, 1993

B [M.N. VENKATACHALIAH, CJ. AND S. MOHAN, J.]

(.
Constitution of In~rticles 21 and 32-Central Interest Subsidy
Scheme for November 1984 Riot Affected Bom>wers issued by Reserve Bank
of India-Directions ismed to include all financial institutions within .the
c definition of "bank" under the S~heme.

A writ petition under Article 32 of the Constitution was med by
members of the Sikh Community who were victims of the communal
carnage which took place in Delhi following the assasination of Prime
Minis~ Indira Gandhi on 31 October 1984. The complaint of the writ
D petitioners was that while nationalised banks bad aclvanced amounti to
nlaabllitate them with the assurance that they would be convertecl,lato
. . .ts, tbough termed as loans, they were ~ubsequently seeking to ncoftl'
die amounts advanced. Contending that the right to livelihood It ,.n al
CM right to life under Article 21, the petitioner soupt a cUrectl• t. CM
E aatltorltles not to insist UJJi>n or claim flirtber amounts from. 'Ille liub
resisted the writ petitions contending that the transactions wen leu
transactions.
'
\ .
In the Course of Jaearin& of the writ petition various dlnctloa Wlft
given by this Court, giving relief In. the matter of recovery proceedlnP.
F Ultimately the Reserve Bank of India by a circular RPCD.NO. PLFS!M·22
PS·126D/90/91, dated 19 September 1990 framed the "Central Interest
Subsidy Scheme for November 1984 Riot affected Bol'l'Oftrs" providing for
relief in the matter of interest in deserving cases to persons who took
assistance from wmts• as defined in the Scheme. IA 4 of 1992 was llW
G for a direction that all ftnandal institutions should be included -ha tile
definition of ~ank" under the Scheme, contending that the dassUlaltlon
between those who took assistance from "banks" as deftned la the Scheme
and these who took assistance from finandal institutions was un· f'
reasonable.

H Allowing the application, this Court
1008
'
H. SINGH v. U.~.I. [MOHAN, 1:) 1009

HELD : 1. 'Ibis is as human proble~. Humanity is above law. 'lbe A
petitioners are a pitiable lot and in pligbtrul state. To them, the 1anaaaP of .
humanity must be spoken. In a normal case the Court may require the
parties to abide by the terms of the contract, but not where such calamities
have befallen and the petitioners are severely amicted with adversity.
1101+1>-FJ B
2. It the petitioners are to be substantially helped, the beaeftt or the
drcular will to be extended vis-a-vis the loans advanced by the ftnandal
institutions, having regard to the circumstances la which the petitionen
are placed. 'lbe spirit of the circular is to help the petitioners. 11aererore
it could hardly matter whether loans are rrom the Banks or ftaandal
institutions. 'lbe failure to refer to the ftnandal institutions ls an lnadver- C
tent omission. (1014-G-H]

CML ORIGINAL JURISDICTION : I.A. No. 3 of 1991.

AND
D
I.A. No. 4 of 1992.
IN

Writ Petition (C) No. 457 of 1988.
E
(Under Articles 32 ~f the Constitution of India.)

...
R.S. Sodhi for the Petitioners.

H.S. Parihar, Ms. A Subhashini, (NP), P. Parmeswaran, (NP), S.K.
Gambhir, K.R. Nambiar S.K. Verma R.P. Kapur, C.P. Mittal and R.B.· p
Mishra for Respondents.

The Judgment of the Court was delivered by

MOHAN, J. This writ petition under Article 32 out of which the
contempt application arises came to the preferred by members belonging G
to Sikh community who were living in Delhi at the relevant time. ·

A tragic event - beyond belief ~ in the history of India took place on
31 October, 1984 when Smt. Indira Gandhi, the Prime Minister was assas-
sinated. It was alleged that the ese:auins be.longed to the Sikh community.
Tbis inOamed feelings. Aa a~ riots broke out all over the colllltry. 1'o H
1010 SUPREME COURT REPORTS [1993) SUPP. 3 S.C.R.

A members of this communitY -were the target of attack throughout India'.
Parti~ularly, in Delhi, several gruesome incid~ni:s took place r~sulting in
large scale arson, looting, systematic violence, attacks on Gurudwaras. The
duration of violence different in various areas. Many Sikhs were killed,
houses were burnt. It was an unprecedented carnage which rendered many
B Sikhs homeless; many families lost their kith and kin and bread-winner.
The details of these incidents are set out in the affidavit in the writ petition. ~
A Commission was appoin~ed, headed by Justice Ranganath Mishra, (a
Judge of this Court) to go into the causes of these riots. The affidavit
further proceeds that Government agencies subsequently went about as-
C sessjng damage and gave out that aid was being provided to the affected
persons for re-settlement. In the grab of such re-settlement efforts, the
petitioners were directed to fill up forms specifying the damages and
further be provided with loans from banks which would subsequently be
converted into grants and to start a life afresh. The petitioners who had .
D witnessed and were victims of a horrendus carnage took the administration
as having a genuine desire to see the victims through their difficult times
and applied for grants/loans as directed. The banks which are nationalised
banks, released the amounts to the petitioners for the purposes of purchase
of trucks or for setting up businesses. Although singatures were taken on
E various documents, yet it was always held out that the money advanced was
in fact a grant and would be converted into the same m due coutse.
lloRvcr, contrary to the assurances held oUt, bank.have started initiating
_course of processes for recovery of the amounts so advanced. It is further
slibmitted that the petitioners who have started life of the third time afresh, J. 4
namely, once having been rendered homeless in 1947 during the partition
F of this country and now having lost all means of livelihood as also most of
the wordly possessions besides having suffered the traumatic experience of
loss of human lives of their near and dear ones, once again started life &om
scratch and now are being threatened with another disastrous situation
which will again render them destitutes and without means of liveliliood.
G This has led the petitioners to move this Court for protection of rights to
life and livelihood. If the tight to livelihood is not treated as part of the
constitutional right to life, the easiest way of depriving the person of his "' ·
right to life would be to deprive him of his means of livelihood. Such
deprivation would not only denude the life of its facts and meaningfulness
H but it would make life impossible to live. The right to livelihood is a part
H. SINGH v. U.0.1. [MOHAN, J.] 1011

of life to live, as that, alone makes it possible to live. On these averments, A
a writ of mandamus is prayed for to direct by an appropriate writ, order
or direction that Article 21 of the Constitution of India which guarantees
the right to life also guarantees right to means of livelihood be enforced
and by an appropriate writ, order or direction direct that the deprivation
of means of livelihood be put an end to and further direct the respondents B
not to insist upon nor claim further amounts from the petitioners.

Various banks have filed counter-affidavits. It is e:..ough to refer to
the affidavit of Punjab and Sind Bank which stands as follows :

"The loans granted by the answering respondents were not in- C
tended to be grants and it was never held out to the petitioners
that the loans granted by the answering respondent bank will not
be recovered from the petitioners and that the petitioners will not
be required to repay those amounts or the interest accrued there-
~ D
There is no fundamental or legal right of the petitioner and
none has been claimed against the answering respondent bank and
had in the normal course of banking granted to the petitioners loan
facilities for their business or for purchase of vehicles. The said
loan was granted on the terms and conditions, set out in the E
documents and executed by the said petitioners in favour of the
answering respondent bank. The relation between the petitioners
and the answering bank is governed by the said agreements and
no duty is cast on the respondent bank, alleged or at all.
F
The answering respondent bank further submits the vehicle/
machinery/goods for the purchases of which loan was granted by
the bank are still being plied/used by the said borrowers. The said
vehicles/machinery/goods are the security of the respondent bank.
Therefore, no writ order of direction ought to be issued restraining
the bank from taking necessary steps for recovery and/or G
~safeguarding the security, viz., vehicteiin question etc."

Thus, it is submitted that where the monies borrowed were utilised
for purchases of vehicles and the petitioners are having the benefit of
\'dUdcs, it i5 not open to them to refuse re-payment. H
,.
• , '!
1012 SUPREME COURT REPORTS (1993] SUPJr. 3 S.C.R.

A On 25.8.1989, this Court_passed the following order:

"Mr. R.S. Sodhi, learned coun5el for the petitioners in these
writ petitions has no objection to pay the principal amount bor-
rowed by them but he is only asking for same relief with regard to
the rate of interest and the time of re-payment. List the matters
B on 12.9.1989."

Again on 7.11.1989, the following order came to be passed:

"Learned Attorney General has made the following statement
in respect of the recovery of loans advanced to riot victims of 1984
c following the assassination· of Mrs. Indira Gandhi :

"The banks will be advised to consider the case of each
loan on its merits and to give such relief as may be considered
. just, fair and reasonable based on the facts of each case.
Reserve Bank of India is requested to advise the banks
D
accordingly.""

In view of the above statement we direct the banks not to have
recourse to recovery proceedings until the banks decide the cue
of each individual concerned in accordance with the advise of the
E Reserve Bank of India. This order does not concern those persons
who are not victims of the. above aforesaid riots. The order of stay
.•
of recovery made by us relates only tQ the aforesaid category of

F
persons. This does not prevent any bank from instituting a suit in
Court if it is felt that the suit is about to barred by time. Even if
any such suit is filed it shall be kept pending until the relief to be
granted is determined by the banks as per the advise of the Reserve
; -
Bank of India. This order applies to the entire class of riot affected
victims referred to above whether they have filed a petition in this
Court or not. All these cases are disposed of.

G Liberty to mention".

For the violation of this order, contempt proceedings have been.
taken out in Contempt Petition No. 62/1991.

Pursuant to this order the Reserve Bank of India, advised the bub
H by its circular RPCD No.PLFS.BC671PS-126(D)-89/90 dated 23rd Deoem-
H. SINGH v. U.O.I. [MOHAN, J.) 1013

ber, 1989 as under: A
"(i) The banks should make a review of the credit facilities granted
to all the November, 1984 riot affected borrowers taking into
account their repaying capacity, the operations in their accounts,
the nature and type of the securities available, the pfesent condi-
tion of the securities, other assets, if any, owned by them and aD B
other relevant factors.

(ii) On the basis of the review, banks should decide the case of
each loanee on merits and afford such relief as may be considered
reasonable. The reliefs may include further extension of time for C
repayment of dues, entering iD.to compromise arrange.menta and
in cases where there are no reasonable chances of recovery of duea,
write off of the amounts due from the borrowers concemed.ft

Thereafter a decision was taken by the 'Government of India to .
extend relief in deserving cases by way of reduction of interest Oil' bank D
loans to six per cent per annum in the case of borrowers affected by the
November, 1984 riots. Accordingly, a 'Central Interest Subsidy Scheme for
November, 1984 Riot Affected Borrowers' was prepared and issued by
Reserve Bank of India, vide its circular RPCD No. PLPS/BC-22/PS·
126D/90/91 dated 19th September, 1990. The main features of the Scheme E
are as under :

"(i) The banks shall charge int~rest at six per cent per annum
on. all eligible outstanding loans in a deserving case, as on 3~st
December, 1'989, for the period from 1st No\'.ember, 1984 if the
loan is granted on or before 1st November, 1984 or from the date F
of grant of loan, if granted subsequently, to 31st December, 1989.

(ii) The borrower shall be advised by the bank in writing about
the extent of relief provided in each account as also the balance
outstanding in the accounts as on 31st December, 1989 and the· G
date on which relief is provided: . . .

(iii) The relief granted by the banks shall be re-imbursed to the
banks by the Central Government.

(iv) The entire interest that has accrued on the outstanding H
. ' . .
J.014· SUPREME COURT REPORTS (1993) SUPP. 3 S.C.R.

A loan amounts after 31st December, 1989 shall be borne by the
borrowers."

Presently I.A. No. 4 of 1992 has been preferred. It is submitted that
this is hardly a reasonable classification so as to classify victims of 1984
riots into those that took assistance from the bank as defined under the
B Scheme and those that took assistance from the financial institutions.
l
.· Accordingly a direction to this effect is.prayed for which is extracted
below:

"direct the Union of Ind_ia as also the Reserve Bank of India
c to include all finan~ial institutions in the definition of 'banks' - both
State and Central - in its 'Central Interest Subsidy Scheme for
November, 1984 - Riot Affected Borrowers'."

We have carefully considered the above prayer. This is a human
D problem. Humanity is above law. The petitioners are a pitiable lot and in
plightful state. To them, the language of humanity must be spoken. To
quote the eloquent lines of Rabindra Nath Tagore in "Kadi and Komal"

'Into the hearts of these
Weary and worn, dry and forlorn _
E We have to minstrel the language of humanity!

In a normal case, the Court may require the parties to abide by the
terms of the contract; but not where such calaniities have befallen and the
petitioners are severefy afflicted with adversity. As stated by H.K. White ui
F 'Lines on Reading'.

"Preach to the storm, and reason with despair,
But tell not Misery's son that life is fair."

If the petitioners are to be substantially helped the benefit of the
G ci~cular will have to be extended yis-a-Vis, the loans advanced by. the
financial institutions, having regard to - the circumstances in which the
petitioners are placed. The spirit of the circular is to help the petitioners.
Therefore, 1t. could hardly matter whether loans are from the Banks or
financial institutions. To us, it appears, the failure to refer to the financial
H institutions, is an inadvertant omission. We find the prayer to be just and
...........
H. SINGH v. U.0.1. [MOHAN, J.) 1015

reasonable. A
Accordingly, it is directed that the Union of India as also the Reserve
Bank of India shall include all financial institutions in the definition of
'bank' - both State and Central - in its 'Central Interest Subsidy Scheme
for November, 1984 - Riot Affected Borrowers'.
B
In view of the Circular of Reserve Bank of India bearing RPCD No.
PLFS.BC.67/PS-126(0)-89/90 dated 23rd December 1989 no further order
is required in IA. No. 3 of 1991. •

I.A. No. 4 of 1992 disposed of in the above terms.
c
R.R. Appeal allowed.