Holding

The High Court erred; there was no consent, the RBI guidelines were inapplicable, no statutory duty existed to compel the bank, and the DRT decree could not be stayed.

Summary

The Oriental Bank of Commerce granted a Rs 20 lakh loan to Sunder Lal Jain and another respondent, which later defaulted and was declared a non‑performing asset (NPA) on 31 March 2001. The bank obtained a decree for recovery from the Debt Recovery Tribunal (DRT), which became final as the respondents did not appeal. The respondents then filed writ petitions in the Delhi High Court seeking a direction that the bank declare their account an NPA from 31 March 2000 and apply the Reserve Bank of India’s 2003 revised guidelines for settlement, with repayment in quarterly instalments over two years. The High Court allowed the petitions, holding that the bank had consented to consider the suggestion and directing the bank accordingly, also staying the execution decree. On appeal, the Supreme Court held that the bank’s statement to "consider" did not amount to consent, that the RBI guidelines are internal executive instructions without statutory force and were inapplicable because the account was not an NPA as of 31 March 2000, and that no legal right existed to compel the bank to declare the account NPA. Consequently, the writ of mandamus was improper and the execution decree could not be stayed. The appeal was allowed and the High Court order set aside.

Issues considered

Whether the High Court order was passed on the consent of the bank.
Whether the RBI's 2003 revised guidelines for NPA settlement are applicable to the respondents' account.
Whether a writ of mandamus can be issued to compel the bank to declare the account as NPA and apply RBI guidelines.
Whether the final decree of the Debt Recovery Tribunal can be stayed in a writ petition.
Whether the period of repayment prescribed by the High Court (two years) complies with RBI guidelines.

Legislation cited

Recovery of Debts Due to Banks and Financial Institutions Act, 1993s. 20

Subjects

Non‑performing assetsRBI guidelinesWrit of mandamusDebt Recovery TribunalConsentExecution decreeStatutory dutyBanking lawSection 20 RDB ActNPA classification

Judgment

[2008] 1 S.C.R. 213

ORIENTAL BANK OF COMMERCE A
V.
SUNDER LAL JAIN & ANR.
(C.A. No. 82 of 2008)
JANUARY 8, 2008
B
(G.P. MATHUR AND AFTAB ALAM, JJ.)

Banking I Banks:
'1
Non-performing Assets (NPA) - Declaration of in terms
of Reserve Bank of India's guidelines - Bank granting credit c
facility to respondent-customer who defaulted in repayment
of amount - Recovery petition - Allowed by Debt Recovery
Tribunal - Respondent filing writ petition for direction to Bank
to apply RBI guidelines for reconciliation and settling accounts
and to declare their account as NPA from a specified date - D
Allowed by High Court directing the Bank to recover the
amount by quarterly instalments over a period of two years -
A On appeal, Held: Statement by counsel of the Bank that his
client would consider suggestions given by other side for
considering his account as NPA from the specified date would E
not amount to consent by the Bank - Thus, there was no
consent given by bank to declare the amount as NPA from
the specified date - Moreover, revised guidelines issued by
RBI will be applicable to NPAs classified as sub-standard -
However, account of respondent-customer was performing. F
.A ·~
account during the period - Under the circumstances,
respondent's account cannot be declared as NPA from
specified date - Hence RBI guidelines inapplicable-
Recovery of Debt Due to Banks and Financial Institutions Act,
1993- S.20.
G
Writ of Mandamus - Issuance of- Held: High Court erred
')(
in issuing a writ of mandamus directing the appellant-bank to
declare respondent's account as NPA from specified date
since for issuance of the writ there must be a legal right and
213 H
214 SUPREME COURT REPORTS [2008] 1 S.C.R.

.A respondent failed to show existence of such right - Writ
Jurisdiction of High Court.
Execution Proceedings - Staying of - Held: Order/
Decree passed by Debt Recovery Tribunal having not been
challenged, attained finality - Therefore, execution of the
B decree could not be stayed.

Words & Phrases:
.,, '
'Afan-performing assets' - Meaning of in terms of
guidelines issued by Reserve Bank of India.
c Respondents were sanctioned credit facility for
Rs.20 lakhs by the appellant-Bank. They defaulted in
repayment of the amount and their account was declared
as Non Performing Assets (NPA) on 31.3.2001. The Bank
filed a petition against the respondents before the Debt
D Recovery Tribunal (ORT). The petition was allowed by
ORT by passing a decree in favour of the Bank for recovery
of Rs.20,27,862/- along with interest. The Bank initiated -,.,,
execution proceedings for recovery of the amount and
recovery certificates were issued to respondents. The
E respondents did not file any appeal challenging the order/
decree passed by the ORT. Instead, the respondents filed
writ petitions before Delhi High Court praying to issue a
direction to the Bank, to declare their account as NPA from
31.3.2000 and apply RBI Guidelines for reconciliation and
F settling their accounts. The petitions were allowed by the ., A

High Court. Hence the present appeal.
Appellant-Bank contended that it had filed a suit for
recovery of the amount and the same had been decreed
and thereafter a recovery certificate had also been issued
G in the execution proceedings initiated by it; that
respondents did not file any appeal to challenge the
decree passed by the ORT and, therefore, the same
attained finality; and that the writ petition filed by the
respondents to declare their account as NPA from
H 31.3.2000 and to apply the RBI guidelines to their case
ORIENTAL BANK OF COMMERCE v. 215
SUNDER LAL JAIN & ANR.

was not at all maintainable and the order passed by the A
rf High Court is clearly erroneous in law.
Respondents submitted that the order had been
passed on consent of the parties and, therefore, it is not
open to the appellant to challenge the same.
B
.Allowing the appeal, the Court
HELD: 1. The order of the High Court mentions that
f t the Bank has agreed to consider the suggestions/request
made by the respondents. It only means that the bank will
examine and consider. "Consider" means - to look at c
closely and carefully; to think. or deliberate on; to take
.
into account. There was thus no consent on the part of
the appellant bank to declare the account in question as
Non Performing Account from 31st March, 2000. A
statement by a counsel for a party that his client will D
consider a particular suggestion given by the other side
would not amount to a consent by the concerned party
,J<.. and an order passed on such a statement of the counsel
cannot be said to be an order passed on consent. It is,
therefore, not possible to accept the contention raised by E
the respondents that the impugned order of the High
Court has been passed on the consent of the appellant
and consequently the present appeal is not maintainable.
(Para - 4) [220-A-D]
2.1 A perusal of the revised guidelines issued by the F
) + Reserve Bank of India for compromise settlement of
chronic Non-Performing Assets (NPAs) of public sector
banks will show that the same will be applicable and will
cover NPAs classified as sub-standard as on 31st March,
2000 which have subsequently become doubtful or loss. G
(Para - 6) [223-B, C]
~ 2.2 The account of the respondents was a performing
account between 1.4.2000 and 31.3.2001. According to the
records of the bank, the account was consigned to
H
216 SUPREME COURT REPORTS (2008] 1 S.C.R.

A Protest Bill Account on 15.10.2001 and was declared as
NPA as per prudential norms of RBI on 31.3.2001. The
respondents contested the case before the ORT an~ did
not admit their liability. No such plea was raised that their
account had become NPA as on 31.3.2000 before ORT.
B Therefore, the revised guidelines issued by Reserve Bank
of India for compromise settlement of chronic Non-
Performing Assets (NPAs) of public sector banks were not
at all applicable to the facts and circumstances of the case
and no direction could be issued to declare the
.., .
C respondents' account as NPA from 31st March, 2000.
(Para - 6) [223-0, E, F]
2.3 The High Court, in the impugned order, has
directed that the amount should be recovered by the
appellant bank in quarterly instalments over a period of
D two years. This is again contrary to the revised guidelines,
which provide a period of one year only for recovery of
the entire amount. (Para - 6) [223-G, H; 224-A]
2.4 It is important to note that the revised guidelines
issued by the Reserve Bank of India on January 29, 2003
E are only in the nature of internal guidelines for the banks
and financial institutions. They are purely executive
instructions and have no statutory force. They do not
create any right in favour of the borrowers. In order to
avail relief under the guidelines, the eligibility criteria must
F be strictly fulfilled and one of them is that the account
must be an NPA as on 31st March, 2000. (Para - 7) +'
[224-A, B]
3.1 In order that a writ of mandamus may be issued,
there must be a legal right with the party asking for the
G writ to compel the performance of some statutory duty
cast upon the authorities. The respondents have not been
able to show that there is any statute or rule having the
force of law which casts a duty on the appellant bank to
declare their account as NPA from 31st March, 2000 and
H apply R.B.I. guidelines to their case. (Para - 9) [226-F,G,H]
ORIENTAL BANK OF COMMERCE v. 217
SUNDER LAL JAIN & ANR. [G.P. MATHUR, J.]

3.2 The High Court erred in issuing a writ of A
~ mandamus directing the appellant bank to declare the
respondents' account as NPA from 31st March, 2000 and
to apply the RBI Guidelines to their case and
communicate the outstandings which shall be recoverable
by quarterly instalments over a period of two years. The 8
later part of the order passed by the High Court wherein a
direction has been issued to stay the recovery
proceedings and the recovery certificate issued against
~· ~
the respondents has been cancelled is also wholly illegal
as the decree passed by the ORT had attained finality and c
proceedings for execution of decree could not be stayed
in an independent writ petition when the respondents had
not chosen to assail the decree by filing an appeal, which
is a statutory remedy provided under Section 20 of
Recovery of Debts Due to Banks and Financial Institutions
D
Act, 1993. (Para -10) [227-A, B, C]
Bihar Eastern Gangetic Fishermen Cooperative Society
~ Ltd. v. Sipahi Singh and others, AIR 1977 SC 2149;
Lekhraj Satramdas La/vani v. Deputy Custodian-cum-
Managing Officer, AIR 1966 SC 334; Dr. Rai Shivendra E
Bahadur v: The Governing Body of the Nalanda College,
AIR 1962 SC 1210 and Dr. Umakant Saran v: State of
Bihar, AIR 1973 SC 964 - relied on.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 82
of 2008. F
; t
From the final Judgment and Order dated 17.8.2005 of
the High Court of Delhi at New Delhi in W.P. (C) No. 559/2004.
8. Sandhya Goswami for the Appellant.
G
Suresh Chandra Tripathy for the Respondents.
The Judgment of the Court was delivered by
G. P. MATHUR, J. 1. Leave granted.
2. This appeal, by special leave, has been preferred H
218 SUPREME COURT REPORTS [2008] 1 S.C.R.

A against the judgment and order dated 17 .8.2005 of Delhi High
Court, by which a direction was issued to the appellant Oriental
Bank of Commerce to declare the respondents' account as Non-
Performing Asset (NPA) from 31st March, 2000 and to apply
the Reserve Bank of India Guidelines to their case and
B communicate the outstandings which shall be recoverable by
quarterly instalments over a period of two years.

3. The respondents Sunder Lal Jain & another were
sanctioned credit facility for Rs.20 lakhs on 12.12.1996. The
respondent defaulted in repayment of the amount and their
C account was declared as NPA on 31.3.2001. On 21.2.2002,
the appellant Oriental Bank of Commerce filed a petition against
the respondents being O.A. No.21 of 2002 before the Debt
Recovery Tribunal-II I, Delhi (for short 'the ORT'). The ORT passed
a decree in favour of the appellant for recovery of Rs.20,27 ,862/
o - along with interest on 14.11.2003. The appellant ini'tiated
execution proceedings for recovery of the amount from the
respondents and a recovery certificate was issued on
8.12.2003. The respondents did not file any appeal challenging
the decree passed by the ORT. Instead, the respondents filed
E WP(C) No.559 of 2005 and WP(C) No.560 of 2004 before Delhi
High Court praying that a direction be issued to the appellant,
Oriental Bank of Commerce, to declare their account as NPA
from 31.3.2000 and apply RBI Guidelines for reconciliation and
settling the accounts with them. The petitions were disposed of
F by a short order on 17.8.2005 which reads as under:-
"The petitioners have a remedy available to them of 1 '
filing an appeal against the recovery proceedings to the
ORT which remedy has not been taken and for which this
petition is liable to be rejected. However, since this petition
G has been pending for quite some time before this Court
and the first Respondent has agreed to consider declaring
the account as NPA from 31st March, 2000, there is no
impediment in disposing of this petition by the following
order:
H First Respondent-Bank is directed to declare the
ORIENTAL BANK OF COMMERCE v. 219
SUNDER LAL JAIN & ANR. [G.P. MAIHUR, J.)

.., Petitioner's account as NPA from 31 51 March, 2000 and
apply the RBI guidelines to their case and then to
A

communicate the outstandings, which shall be recoverable
by quarterly instalments over a period of two years.

In case, this course works out and Petitioners after
reconciling their accounts do not commit any default, the B
execution proceedings against them pending before the
Recovery Officer shall be stayed and the recovery
• ·~r certificate passed against them shall stand cancelled .
However, in case of default it shall be open to the first
Respondent-Bank to activate the recovery proceedings c
against them. In that event, it shall be open to the Petitioners
to take any appropriate remedy, which they may have
against the recovery certificate or its execution in law."
Feeling aggrieved by the above noted order, the appellant,
D
Oriental Bank of Commerce, has preferred this appeal.
4. Learned counsel for the appellant has submitted that
> ,.It-
the bank had filed a suit for recovery of the amount and the same
had been decreed on 14.11.2003 and thereafter a recovery
certificate had also been issued on 8.12.2003 in the execution E
proceedings initiated by the appellant. The respondents did not
file any appeal to challenge the decree passed by the ORT ahd,
therefore, the same attained finality. In these circumstances, the
writ petition filed by the respondents to declare their account as
NPA from 31.3.2000 and to apply the RBI guidelines to their F
~ ~ case was not at all maintainable and the order passed by the
High Court is clearly erroneous in law. Learned counsel for the
respondents has, on the other hand, tried to support the order
passed by the High Court and has submitted that the same had
been passed on consent of the parties and, therefore, it is not
G
open to the appellant to challenge the same.

)ti Regarding the submission of learned counsel for the
respondents that the order under challenge has been passed
on consent of the parties, it may be noted that the High Court
has recorded that "the first respondent has agreed to consider H
220 SUPREME COURT REPORTS [2008) 1 S.C.R.

A declaring the account as NPA from 31st March, 2000". Learned
counsel for the appellant bank has vehemently submitted that
no consent had been given by the counsel for the bank to declare
the account as NPA from 31st March, 2000, nor any such
instructions had been given to the counsel by the appellant bank.
B That apart, the order of the High Court mentions "has agreed to
consider". It only means that the bank will examine and consider.
"Consider" means - to look at closely and carefully; to think or
deliberate on; to take into account. There was thus no consent
on the part of the appellant bank to declare the account as NPA ~· .
C from 31st March, 2000. A statement by a counsel for a party that
his client will consider a particular suggestion given by the other
side would not amount to a consent by the concerned party and
an order passed on such a statement of the counsel cannot be
said to be an order passed on consent. It is, therefore, not
possible to accept the contention raised by learned counsel for
0
the respondents that the impugned order of the High Court has
been passed on the consent of the appellant bank and
consequently the present appeal is not maintainable.
5. Before considering the submission made by learned
E counsel for the parties on merits of the case, it is necessary to
take note of the essential features of the revised guidelines
issued by the Reserve Bank of India on January 29, 2003
regarding Non-Performing Assets of public sector banks which
read as under:-
F "Revised guidelines for compromise settlement of
chronic Non-Performing Assets (NPAs) of public
sector banks
DBOD.BP.BC.65/21.04.117/2002-2003 January 29, 2003
G Chairman and Managing Directors
of all Public Sector Banks .

. Dear Sir,
Please refer to our circular DBOD.BP.BC.11/21.01.040/
H 99-00 dated 27th July, 2000, setting out the guidelines for
ORIENTAL BANK OF COMMERCE v. 221
SUNDER LAL JAIN & ANR. [G.P. MATHUR, J.]
-"'I
compromise settlements of chronic NPAs up to Rs.5.00 A
crore.
2. A review of compromise settlements of NPAs through
the above scheme has revealed that the progress of
recovery of NPAs through this mechanism has been
moderate. In consultation with Government of India, it has B
been decided to give one more opportunity to the
~· borrowers to come forward for settlement of their
outstanding dues. Hence fresh guidelines are now issued,
which will provide a simplified, non-discretionary and non-
discriminatory mechanism for compromise settlement of c
chronic NPAs below the prescribed value ceiling. All public
sector banks should uniformly implement these guidelines,
so that maximum realization of dues is achieved from the
stock of NPAs within the stipulated time.
D
3. ............................................................................
> + (A) Guidelines for compromise settlement
of chronic NPAs upto Rs.10.00 crore
[i] Coverage
E
a) The revised guidelines will cover all NPAs in all sectors
irrespective pf the nature of business which have become
doubtful or loss as on 31 51 March 2000 with outstanding
balance of Rs.10.00 crore and below on the cut off date.
f ~
b) The guidelines will also cover NPAs classified as sub- F
standard as on 31st March, 2000, which have subsequently
become doubtful or loss.

c) These guidelines will cover cases on which the banks
have initiated action under the Securitisation and
G
-~
Reconstruction of Financial Asses and Enforcement of
Security Interest Act, 2002 and also cases pending before
Courts/DRTs/BIFR, subject to consent decree being
obtained from the Courts/DRTs/BIFR.
d) Cases of wilful default, fraud and malfeasance will not H
222 SUPREME COURT REPORTS [2008] 1 S.C.R.

r-
A be covered.
e) The last date for receipt of applications from borrowers
would be as at the close of business on 30th April, 2003.
The processing under the revised guidelines should be
completed by 31st October, 2003.
B
(ii) Settlement Formula - amount and cut off
date , '
a) NPAs classified as Doubtful or Loss
as on 31st March, 2000
c
The minimum amount that should be recovered under the
revised guidelines in respect of compromise settlement
of NPAs classified as doubtful or loss as on 31st March,
2000 would be 100% of the outstanding balance in the
account as on the date of transfer to the protested bills
D
account or the amount outstanding as on the date on which
the account was categorized as doubtful NPAs, whichever
"t.
happened earlier, as the case may be;
b) NPAs classified as sub-standard as on 31st
E March, 2000 which became doubtful or loss
subsequently.
The minimum amount that should be recovered in respect
of NPAs classified as sub-standard as on 31st March,
2000 which became doubtful or loss subsequently would
F be 100% of the outstandinG balance in the account as on f- ~

the date of transfer to the protested bills account or the
amount as on the date on which the account was
categorized as doubtful NPAs, whichever happened earlier,
as the case may be, plus interest at existing Prime Lending
G Rate from 1st April, 2000 till the date of final payment.
(iii) Payment
The amount of settlement arrived at in both the above
cases, should preferably be paid in one lump sum. In cases
H where the borrowers are unable to pay the entire amount
ORIENTAL BANK OF COMMERCE v. 223
-'' SUNDER LAL JAIN & ANR. [G.P. MATHUR, J.]
-I
-- in one lump sum, at least 25% of the amount of settlement A
should be paid upfront and the balance amount of 75%
should be recovered in instalments within a period of one
year together with interest at the existing Prime Lending
Rate frorn the date of settlement up to the date of final
payment. B
.....................................................................................
f ·\ 6. A perusal of the aforesaid revised guidelines issued by
the Reserve Bank of India on January 29, 2003 for compromise
settlement of chronic Non-Performing.Assets (NPAs) of public c
sector banks will show that the same will be applicable and will
cover NPAs classified as sub-standard as on 31st March, 2000
which have subsequently become doubtful or loss. The revised
guidelines have no application where the NPAs have not been
classified as sub-standard as on 31st March, 2000. It is not in
D
dispute that the account of the respondents was a performing
account between 1.4.2000 and 31.3.2001. According to the
~
records of the bank, the account was consigned to Protest Bill
Account on 15.10.2001 and was declared as NPA as per
prudential norms of RBI on 31.3.2001. The respondents
contested the case before the ORT and did not admit their E
liability. No such plea was raised that their account had become
NPA as on 31.3.2000 before ORT. Therefore, the revised
guidelines issued by Reserve Bank of India on January 29, 2003
for compromise settlement of chronic Non-Performing Assets
1
"J,\ I (NPAs) of public sector banks were not at all applicable to the F
facts and circumstances of the case and no direction could be
issued to declare the respondents' account as NPA from 31st
March. 2000. The guidelines further provide that in case where
borrowers are unable to pay the entire amount in lump sum, at
least 25% of the amount of settlement should be paid upfront G
~
and the balance amount of 75% should be recovered in
instalments within a period of on.e year together with interest.
The High Court, in the impugned order, has directed that the
amount should be recovered by the appellant bank in quarterly
instalments over a period of two years. This is again contrary to H
224 SUPREME COURT REPORTS [2008] 1 S.C.R.

,,.. •
A the revised guidelines, which provide a period of one year only
for recovery of the entire amount.

7. It is important to note that the revised guidelines issued
by the Reserve Bank of India on January 29, 2003 are only in
the nature of internal guidelines for the banks and financial
B institutions. They are purely executive instructions and have no
statutory force. They do not create any right in favour of the
borrowers. In order to avail relief under the guidelines, the
eligibility criteria must be strictly fulfilled and one of them is that
•
••
the account must be an NPA as on 31st March, 2000. What the
c respondents want is that a writ of mandamus be issued
commanding the appellant bank to declare the respondents'
account as NPA from 31st March, 2000 and apply the RBI
Guidelines to their case whereby their liability towards the
appellant bank will be considerably reduced by way of one time
D settlement.
8. The principles on which a writ of mandamus can be t-
issued have been stated as under in 'The Law of Extraordinary
Legal Remedies' by F.G. Ferris and F.G. Ferris, Jr. :

E Note 187- Mandamus, at common law, is a highly
prerogative writ, usually issuing out of the highest court of
general jurisdiction, in the name of the sovereignty, directed
to any natural person, corporation or inferior court within
the jurisdiction, requiring them to do some particular thing
F therein specified, and which appertains to their office or i \
duty. Generally speaking, it may be said that mandamus
is a summary writ, issuing from the proper court,
commanding the official or board to which it is addressed
to perform some specific legal duly to which the party
applying for the writ is entitled of legal right ~o have
G
performed.
Note 192 -Mandamus is, subject to the exercise of a
sound judicial discretion, the appropriate remedy to
enforce a plain, positive, specific and ministerial duty
H presently existing and imposed by law upon officers and
.ORIENTAL BANK OF COMMERCE v. 225
SUNDER LAL JAIN & ANR. [G.,P. MATHUR, J.]
others who refuse or neglect to perform such duty, when A
. there is no other adequate and specific legal remedy and
without which there would be a failure of justice. The chief
function of the writ is to compel the performance of public
duties prescribed by statute, and to keep subo,rdin.ate and
inferior bodies and Tribunals exercising public functions B
within their jurisdictions. It is not necessary, however, that
the duty be imposed by statute; mandamus lies as well for·
the enforcement of a common Jaw duty.
Note 196- Ma.ndamus is not a writ of right. Its issuance
unquestionably lies in the sound judicial discretion of the C
Court, subject always to the well-settled principles which
. have. been established by· the Courts. An action in
mandamus is not governed by the principles of ordinary
litigation where the matters alleged on one side and not
denied on the other are taken as true, and Judgment D
- pronounced thereon as of course. While mandamus is
classed as a legal remedy, its issuance is largely controlled
by equitable principles. Before granting the writ the Court
may, and should, look to the larger public interest which
may be. concerned - an interest which private litigants are E
apt to over-look when striving for private ends. The Court
should act in view of all the existing facts, and with due
regard to.the consequences which will result. It Is in every
case a qlscretlon dependent upon all the surrounding facts
and circumstances. · .F
Note 208.-.......... The correct rule Is that mandamus will
not ile where the duty Is clearly discretionary and the party
upon whom the duty rests has exercised his discretion
reasonably and within his jurisdiction, that Is, upon facts
· sufficient to support his action. G
'lo< 9. These very prlnclples have been adopted In our country.
In Blhar Eastern Gangetlc Fishermen Cooperative Society Ltd.
v. Slpahl Singh and others, AIR 1977 SC 2149, after referring
to the earll•r decisions In Lekhraj Satramdas Lalvanl v. Deputy .H
226 SUPREME COURT REPORTS .· {2008] 1 S.C.R.

A Custodian-cum-Managing Officer, AIR 1966 SC 334; Dr. Rai ~

Shivendra Bahadur v. The Governing Body of the Nalanda
College, AIR 1962 SC 1210 and Dr. Umakant Saran·v. State of
Bihar, AIR 1973 SC 964, this Court observed as follows in
paragraph 15 of the reports : .
B ".......... There is abundant authority in favour of the ;
proposition that a writ of mandamus can be granted only
in a case where there is a statutory duty imposed upon the
officer concerned and there is a failure on the part of the
~-

•
officer to discharge th.e statutory obligation. The chief
c function of a writ is to compel perform~nce of public duties
prescribed by statute and to keep subprdinate .Tribunals
and officers exercising public functions within the limit of
'J
their jurisdiction. It follows, therefore, that in .order that ~

mandamus may issue to compel the authorities to do
D something, it must be shown that there is a statute which
imposes a legal duty and the aggrie1ved party has a legal
right under the statute to enfori:;e its performance ...,....... In f. ,
the instant case, it has not been shown by respondent No. '
1 that there is any statute or rule having the force of law
E which casts a duty on respondents 2 to 4 which they failed
to perform. All that is sought to 9e enforced is an obligation
flowing from a contract which, as already indicated, is
also not binding and enforceable. Accordingly, we are
clearly of the opinion that respondent No. 1 was not entitled
F to apply for grant of a writ of mandamus under Article 226
of the Constitution and the High Court was ·not competent
~
" '

to issue the same."
Therefore, in order that a writ of mandamus l'T)ay be
issued, there mustbe a legal right with .the party asking for the
G writ to compel the performance of some statutory duty cast upon
the authorities. The respondents have not been able to show
>rl
that there is any statute or rule having the force of law which
casts a duty on the appellant bank to declare their account as
NPA from 31 51 March, 2000 and apply R.B.I. guidelines to their
H case.
ORIENTAL BANK OF COMMERCE v. 227
SUNDER LAL JAIN & ANR. [G.P. MATHUR, J.]
--; . '
10. The High Court, therefore, erred in issuing a writ of A
mandamus directjng the appellant bank to declare the
respondents' accoµl"!t as NPA from .31 51 March, 2000 and to
apply the RBI Guidelines to their case and communicate the
outstandings which stia-11-be recoverable by quarterly instalments
over;a_periQdofJwo Y~ers. Jbe la.ter part ofthe order passed by B
the High Court wherein a direction has been issued to stay the
recoveryproceediQgs and the recovery certificate. issued against
the re'spocideots has been ca.ncelled is -c,ilso wholly illegal as the
~ ( .. ,··· ,, . "! ' . • -

decreep~~~ed by t.he DR! had attained finality and proceedings
for exeq~ti_on pf decr~e could not be stayed in an independent c
writ p~ti.tion ,'!'!ben the. respondents had not chosen to assail the
decree by filing an appeal; which is a statutory remedy provided
und~r Section 20 of Recovery qf Debts Due to Banks and
.Financial Institutions Act, 1993,
. 11. In view'ofthe discussions made abo~e. the ~ppeal is D
'allowed and the impugned judgment and order dated 17.8.2005
->passed by the High Court is set aside. The appellant will be
· ·ehtitled to its costs. ·
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'<S.K.. S. Appeal allowed.
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