Gauhati High Court
Sri. Jogendra Nama And Ors. vs Union Of India (Uoi) And Ors. on 6 January, 1988
Equivalent citations: AIR1989GAU60, AIR 1989 GAUHATI 60, (1988) 2 BANKCLR 424 (1988) 1 GAU LR 154, (1988) 1 GAU LR 154
Author: K.N. Saikia
Bench: K.N. Saikia
JUDGMENT
Saikia. C.J.
1. The three writ petitioners, who are village artisan, blacksmith and craftsman serially, pray for an appropriate writ cancelling the 'Loan Mela' now in operation in the State of Tripura, restraining the respondents from acting upon the loan application forms distributed by the Congress (I) party, and prohibiting the respondents from proceeding further with the Loan Mela' and from distributing further loan application forms by the Congress (I) party and/or any other appropriate orders or directions. They have impleaded as respondents, the Union of India, the Reserve Bank of India, the Indian National Congress (Congress-I), hereinafter referred to as 'Congress (I)', and 11 nationalised commercial banks, which are wholly owned by the Central Government and the Tripura Gramin Bank.
2. The Reserve Bank of India, shortly the RBI, it is stated, earlier formulated three schemes for advancing loans to the weaker sections of the community for upliftment of their economic standard, namely, (1) Integrated Rural Development Programme (IRDP); (2) Self Employment for Urban Poor (Sepup); (3) Self Employment for Educated Unemployed Youth (SEEUY), and they are being implemented by all the bank branches throughout Tripura. About 45,000 sponsored proposals in the schemes are pending for disposal by payment of loans at different banks in Tripura.
3. While the above 45,000 sponsored applications are still so pending, the United Bank of India formulated another scheme called Accelerated Credit Programme (ACP) but there is nothing to indicate that the Reserve Bank of India approved it. It was subsequently re-named as Cash Credit Delivery Programme (CCDP) and its contents and procedure were finalised on 21-9-87 in a meeting1 of several participating banks, namely, United Bank of India, UCO Bank, the State Bank of India. The major issues discussed/decided were as under :
"(a) it was informed that UBI as a lead bank would be required to organise Cash Credit Delivery Programme for disbursal of loans to the weaker sections inter alia with the objective of increasing the credit deposit ratio in the State.
(b) the ground rules prepared for the programme (enclosed vide Annexure-I) were placed, discussed and evolved through the participation of the bankers present in the meeting.
(c) the application forms (separately for farm and non farm sectors) specially designed for the CCDP, were placed before the participants and were approved. It was the feeling of the bankers present in the meeting that such application forms would serve the banks' purpose of lending and would minimise their clerical workload.
(d) in order to minimise the workload pertaining to maintaining proposals receiving register for such huge number of applications likely to be submitted by the intending borrowers for the CCDP, it was decided that the perforated receipt portion would be kept in a separate file, which would serve the purpose of recording the proposals in the register. No separate proposals receiving register need be maintained.
(e) it was also decided that there would be no limit for distribution of forms, any body approaching bank branches participating in the programme would be provided with application forms. It was particularly emphasised that in disbursing credit to weaker sections the banks must be demonstratively fair and impartial.
(f) bank branches would, however, dispose of the proposals (either sanctioned or rejected), after making pre-sanction scrutiny and observing pre-lending formalities, as per RBI guidelines. Reasons for rejection would, however, need to be recorded and the intending borrowers would be informed of the same in due course.
(g) it was also decided that banks operating under the programme would make necessary manpower available for such huge programme in consultation with their Head Office/Zonal Office.
(h) it was also decide that government sponsored programmes would be given first priority and attempts would be made to dispose of at least 600 proposals per branch positively by 7-11-87."
The following ground rules of the CCDP were also finalised :
"Area of Operation : The programme will be implemented in all the three districts of Tripura.
Convenor Bank : United Bank of India, as the Lead Bank, will organise the programme.
Participation : All banks including the Regional Rural Banks and the Tripura State Co-op. Bank will participate in the programme.
Physical Target : It will be decided in a meeting of the bankers having regard to the backlog in attainment of various physical programmes under Government-sponsored schemes and the national targets/sub-targets given to the banks, annual action plans and the resources of the banking institutions.
Target Group Small and marginal farmers, agrl. labourers, non-farm workers, artisans, small businessmen, small transport operators, small-scale industries within the weaker sections as defined by the Ghosh Working Group, self employed persons and backward communities, including SC/ST and those belonging to weaker sections.
Identification : The applicants will be identified by EDO/Gram Pradhan/MLA/ MP/Gazetted Officer/Commissioner of the Municipality/Member, Tripura Autonomous Council. Any of the above persons authorised will have to sign the identification certificate with his seal.
Scheme : Schemes approved by the DRDA/FFDA/NABARD/DIC/SC/ST/ Corporation/KVIC and other development departments of the State Government.
Ceiling of Loan Amt. : Loans under this programme to an individual will not exceed Rs. 5,000/- for proposals not linked with subsidy of the Government.
Distribution of application forms : Applications will be accepted in the application form approved by the bankers. Application forms are available from the branches of banks participating in the CCDP. Applications from adopted area of operation of branches or areas allocated in the meeting will only be accepted.
Operational Mechanism :
1. Applications received by the banks' branches upto 31-10-87 will be only considered for the purpose of this programme.
2. Applications from SC/ST beneficiaries must be supported by SC/ST certificate, which is to be incorporated in the application forms.
3. Applications sponsored by the agencies of the State Government under various anti-poverty programme will be accorded priority and disposed of in terms of RBI guidelines. Applications will be dealt with by banks strictly in terms of RBI guidelines relating to priority sector credit with special reference to weaker sections and will further be subjected to pre-sanction scrutiny. All loans proposals must pass the test of viability and must be considered by banks techno-economically feasible. Further, loans covered under the guarantee schemes of the DICGC will only be considered by commercial banks including RRBS for the purpose of this programme.
4. Sanction, lists in quadruplicate giving name, brief address, name of the scheme, amount sanctioned with interest rate, category of borrowers (whether SC/ST) is to be prepared and sent to Regional Office/Controlling Office of the banks.
5. Reasons for rejection are to be recorded properly on the body of the applications, Communication of rejection to the applicants should only be done after getting confirmation from Regional Office/ Controlling Offices."
4. It is the petitioners' case that they have come to know from the news reports published in different newspapers in Tripura, West Bengal and Delhi that the President of Tripura Congress Committee (I), Shri Sudhir Mazumdar disclosed at a press conference, inter alia, that the Tripura Pradesh Congress (I) is gearing up for the Loan Mela' which is expected to be held before the coming Assembly Election and that the State Congress (I) has received about 4,00,000 loan application forms from the banks which will be distributed among the people in all the 60 constituencies of Tripura; that a 5 (five) member committee in each of the 60 constituencies has been set up by the Congress (I) and has been put in charge of distribution of the forms to the people; that these committees will identify the families and go to each house and distribute the said loan application forms; that the persons will submit the filled up forms to these committees which shall send up to the State Committee which will tender only approvable forms to the All India Committee at Delhi constituted for this purpose headed by the Union Minister of State for Finance, Shri Janardhana Poojary. That Committee will then select the beneficiaries and forward their loan applications to the banks which will disburse the loans. The petitioners' further state that the Union Minister for State for Telecommunication, Shri Santosh Mohan Dev, in a public meeting at Agartala has stated that the Congress (I) is determined to hold Loan Mela' in Tripura and if the banks' employees do not co-operate the party shall open substituted banks in the Circuit House and distribute the forms.
5. The petitioners' grievance is that they and many others similarly situated had already applied for loans from banks under the earlier schemes, namely, IRDP, SEPUP, and SEEUY but have not yet been granted loans. It is their case that while Congress (I) has already started distributing loan application forms for Loan Mela' (Annexure E to the petition), when they approached different bank branches in Tripura to obtain the forms they were told that the forms were not available and that they (the banks) did not distribute such forms and that if the petitioners desired they could obtain forms from Congress (I) office. When the petitioners went to Congress (I) office, they were put several questions including as to whom they intended to vote at the ensuing Assembly election and being not satisfied with their answers no forms were given to them. Hence this petition.
6. When this petition was moved on 22-12-87 and 23-12-87 considering the nature of the subject matter and the parties involved we issued notices to the respondents returnable by 4-1-88. On that date notices were yet to be served on the respondents 2 to 15.Mr. S.N. Chetia for the Respondent No. I, Union of India, prayed for time but ultimately agreed with Mr. D.P. Kundu who earnestly prayed that the petition may be taken up at this stage as Mr. Chatterjee had come from Delhi for the day only, and, accordingly, it is being taken up for admission without appearance of Respondents 2 to 15.
7. Mr. Chatterjee submits that the loan Mela' currently being held in Tripura is liable to be cancelled and the loan application forms for the Mela' already distributed or to be distributed by the Congress (I) are liable to be frozen on the inter alia, grounds, namely, that without completely implementing the earlier schemes, the Respondents had no authority to take up the impugned CCDP Scheme and hold the Loan Mela' for its implementation; that the CCDP Scheme is invalid as it has not been approved by the Reserve Bank of India; that the Respondent-banks have been violating the instructions of the Reserve Bank of India and the rules of banking as well as the CCDP Scheme itself by abdicating powers and surrendering their functions of distribution of loan application forms and selection of deserving applicants to the Congress (I); that the bank employees are also not in favour of the CCDP; that the procedure of distribution of forms and selection of applications through Congress (I) is discriminatory and arbitrary and as such violative of Article 14 of the Constitution; that the granting of loans which amounts to distribution of largesses by the Respondent-banks, who are instrumentalities of the State, through Congress (I) is violative of Articles 14 and 21 of the Constitution; that the granting of loans by the above procedure described by the Congress (I) President of Tripura Shri Sudhir Mazumdar is violative of all rules and canons of banking and the instructions issued by the Reserve Bank of India; and that the impugned CCDP Scheme and its procedure as described by Tripura Congress (I) President is violative of the rule of law and the basic tenets of democracy; that public funds are being utilised for political benefits of a party; and that this is a public interest litigation and the newspaper reports can be relied upon as those have not been denied by the respondents and the persons concerned.
8. Mr. S.N. Chetia demurring submits, inter alia, that this petition is entirely based on newspaper reports and has been filed by a political party as a camouflage in the name of the three petitioners who have no grievance; that the petition does not disclose the necessary particulars even to make out a prima facie case; that no instruction of the Reserve Bank of India or any rule or practice of banking has been shown to have been violated; that no particular order affecting the petitioners' interest has been impugned in the petition; that no loan has been shown to have been granted or distributed in violation of any law and in that sense the petition is premature; that the persons who are reported to have made statements relating to the Loan Mela' and distribution of forms have not been impleaded and as such their statements cannot be gone into in their absence; that in the scheme it has nowhere been stated that the loans will be granted only to the members of a political party and not to others; that the CCDP scheme does not suffer from any defect or statutory violation; that the forms distributed before 31-10-87 will alone be considered by the banks; that the petitioners have failed to show that the respondents have delivered the forms to Congress (I) instead of distributing those by themselves through their branches in Tripura; that loans are not largesses outright and the principles of distribution of largesses are not applicable; and that this is a political petition and in view of the impending Assembly election in Tripura this Court may not entertain it at this stage.
9. We make it clear that we are unable to deal with the political aspect of the subject matter of this petition and we shall confine ourselves to the legal aspect only. Accordingly no observation made herein should be interpreted politically. For deciding the tenability of the rival submissions regarding the validity or otherwise of Loan Mela', which is admittedly a recent development involving the banking system of the country, it is necessary to determine its proper legal category and how the Union of India, the Reserve Bank of India and the other respondent-banks are concerned in the 'Loan Mela' transactions. After its proper categorisation, we may apply the appropriate law to the subject.
10. The CCDP Scheme as agreed by the banks mention credit-deposit ratio, pre-sanction scrutiny and the pre-lending formalities as per RBI guidelines, viability tests, techno-economic feasibility, commercial banks, controlling offices of banks. The first questions to be decided are, does the CCDP Scheme violate RBI guidelines and commercial banking laws and practices as has been submitted by the petitioners? How does Reserve Bank stand in relation to the participating banks in the banking system?
What are its guidelines? The banking systems of different countries, says Sayers, in his Modern Banking' gravitate towards 'central banking systems". These systems fall into three parts ; the central bank, the commercial banks, and various ancillary institutions dealing with certain restricted types of credit. There is only one central bank in each country. The Reserve Bank of India is the central bank of the country, and it does little, if any, ordinary banking business for the general public, it restricts itself in the main to controlling the operations of the rest of the banking system. The essential function of a central bank is the maintenance of stability of the monetary system of the country. In the words of M.H.De Kock in his 'Central Banking', a central bank being generally recognised as a bank which constitutes the apex of the monetary and banking structure of its country and which performs, as best as it can in the national economic interest, the following functions : The regulation of currency in accordance with the requirements of business and the general public for which purpose it is granted the sole right of note issue; the performance of general banking and agency services for the State; the custody of cash reserves of commercial banks; the custody and management of the nation's reserves of international currency; the granting of accommodation, in the form of re-discounts or collateral advances, to commercial banks, bill brokers and dealers, or other financial institutions; the settlement of clearance balances between the banks; and the control of credit in accordance with the needs of, business and with a view to carrying out the broad monetary policy adopted by the State. Thus the central bank does not perform such banking transactions as accepting deposits from the general public and lending to or accommodating commercial customers with discounts or advances. Those are functions of the commercial banks.
11. The RBI has been constituted under the provisions of the Reserve Bank of India Act, 1934, hereinafter referred to as 'the Act", to regulate the issue of Bank Notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage. The general superintendence and direction of the affairs and business of the Bank has been entrusted to a Central Board of Directors. The Central Government may from time to time give such, directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest. The RBI has been authorised to carry on and transact several kinds of business specified in Section 17 of the Act. The Central Banking Functions of the Bank have been stated in Chapter-Ill, Sections 20 to 45 of the Act.
12. As defined in Section 45A of the Act "banking company" means a banking company as defined in Section 5 of the Banking Regulation Act, 1949 and includes the State Bank of India, and subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959, any corresponding new bank constituted by Section 3 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970, and any other financial institution notified by the Central Government in this behalf. The nationalised banks are "corresponding new banks". Under Chapter III-A of the Act, the RBI has power to collect credit information from banking companies, and from non-banking institutions. It may also call for information from financial institutions and give directions to them,; Chapter-IV of the Act contains general provisions. Under Section 46, the Central Government shall transfer to the RBI rupee securities of the value of five crores of rupees to be allocated by the Bank to the Reserve Fund. Under Section 46A the RBI shall contribute every year such sums of money as it may consider necessary and feasible to do so to the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilisation) Fund established and maintained by the National Bank under Sections 42 and 43, respectively of the National Bank for Agriculture and Rural Development Act, 1981. Under Section 46C the Bank shall establish and maintain a Fund to be known as the National Industrial Credit (Long Term Operations) Fund to be utilised for the purpose stated thereunder. The RBI, under Section 49, shall publish the 'Bank rate' from time to time. The 'Bank rate' means the standard rate at which it is prepared to buy or re-discount bills of exchange or other commercial papers eligible for purchase under the Act. From the above provisions and practices in respect of RBI we do riot find any material to hold that the CCDP is contrary to guidelines of the RBI. The contention has, therefore, to be rejected.
13. The next question is whether the, CCDP is violative of commercial banking law and practice. The commercial banks provide the meeting place for lenders and borrowers. They think primarily of profit-making. They face competition between one another in the matter of business and cannot afford altruism beyond those of its competitors. They are subjected to control and guidance of the Reserve Bank of India. The essence of banking is the acceptance of withdrawable deposits of money for the purpose of lending or investment. 7 American Jurisprudence, Section 2 says : "Strictly speaking the term bank implies a place for deposit of Money. In its more enlarged sense a bank may be defined as an institution, generally incorporated, authorised to receive deposits of money; to lend money and issue promissory ', notes, usually known by the name of 'bank notes' or to perform some one or more of these functions". 7 Corpus juris says that a , bank is an association or corporation whose business it is to receive money or deposit, cash, cheques or drafts, discount commercial paper, make loans and issue promissory notes payable to bearer called 'bank notes'.
14. While the above are some of the functions, in a developing society and economy those cannot remain the same for a long time. Never functions and changing emphasis are bound to be there. Mr. Jannan in his 'Banking Law and Practice in India' rightly points out that banking is and evolutionary concept and banks often carry on a number of functions besides that of proper banking. The function of receiving deposits from the customers for the purpose. of lending or investment, repayable on demand or otherwise is the one function above all other functions which distinguishes banking business from any other kind of business. Banker's business often entails an advance or loan to the customer. Besides the various securities in its portfolic a bank may grant loans on various terms depending on its liquidity and cash reserves.
15. Ordinary banking business, according to Sayers, consists of changing cash for bank deposits and bank deposits for cash;
transferring bank deposits from one person or corporation to another; granting of loans;
giving bank deposits in exchange for bills of exchange, etc. The commercial banks are to maintain liquidity. Liquidity generally means the capacity to produce cash on demand for deposits. The Depositors have the right to withdraw their deposits according to the nature of their accounts. A bank must, therefore, so conduct its business as to maintain liquidity. Cash, however, is an asset which brings no income to the bank. So a commercial bank must at the same time remain liquid and have sufficient volume of business to utilise its deposits. The lower is the cash reserve the lower is the cost of maintaining liquidity. Thus, there is constant competition for usual types of business.
16. The above principles of commercial banking have been embodied in the Banking Regulation Act, 1949 which is an Act to consolidate and amend the law relating to banking. Section 6 of this Act enumerates the forms of business in which banking companies may engage. Sub-section (l)(a) includes "the borrowing, raising, or taking up of money; the lending or advancing of money either upon or without security; the drawing, making, accepting, discounting, buying, selling, collecting and dealing in bills of exchange," etc. Clause (c) mentions contracting for public and private loans and negotiating and issuing the same. Under Sub-clause (2) thereof no banking company shall engage in any form of business other than those referred to in Sub-section (1). Section 11 of the Act prescribes the requirement as to minimum paid up capital and reserves in banking company. Under Sub-section (2)(b) the banking company shall deposit and keep deposited with the Reserve Bank, either in cash or in the form of unencumbered approved securities, or partly in cash and partly in the form of such securities, an amount which shall not be less than the minimum required by Clause (a). Section 17 obligates the creation of a reserve fund out of the bank's profits. Section 18 requires the maintenance of cash reserve. Section 20 puts certain restrictions on loans and advances to certain persons on the security of its own shares. Section 21 gives power to the Reserve Bank to control advances by banking companies and provides ;
"21. Power of Reserve Bank to control advances by banking companies --
(1) Where the Reserve Bank is satisfied that it is necessary or expedient in the public interest or in the interests of depositors or banking policy so to do, it may determine the policy in relation to advances to be followed by banking companies generally or by any banking company in particular and when the policy has been so determined, all banking companies or the banking company concerned, as the case may be, shall be bound to follow the policy as so determined (2) Without prejudice to the generality of the power vested in the. Reserve Bank under Sub-section (1), the Reserve Bank may give direction to banking companies, either generally or to any banking company or group of banking companies in particular, as to --
(a) the purposes for which advances may or may not be made,
(b) the margins to be maintained in respect of secured advances,
(c) the maximum amount of advances or other financial accommodation which, having regard to the paid-up capital, reserves and deposits of a banking company and other relevant considerations, may be made by that banking company to any one company, firm, association of persons or individual,
(d),the maximum amount up to which, having regard to the considerations referred to in Clause (c), guarantees may be given by a banking company on behalf of any one company, firm, association of persons or individual, and
(e) the rate of interest and other terms and conditions on which advances or other financial accommodation may be made or guarantees may be given, (3) Every banking company shall be bound to comply with any directions given to it under this section".
17. Section 24 obligates the maintenance of a percentage of assets providing that every banking company shall maintain in India in cash, gold or unencumbered approved securities, valued at a price not exceeding the current market price, an amount which shall not at the close of business on any day be less than twenty percent of the total of its time and demand liabilities in India and under Sub-section (2) thereof vary the percentage. Section 35 gives power to inspection of a banking company by the Reserve Bank at any time and oh being directed so to do by the Central Government. Section 35A empowers the Reserve Bank to give direction where it is satisfied that in the public interest or in the interest of banking policy or to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or to secure the proper management of any banking company generally. Section 36 empowers the Reserve Bank to caution or prohibit banking companies generally or any banking company in particular against entering into any particular transact ion or class of transaction, and generally give advice to any banking company; to give assistance to any banking company by means of the grant of a loan or advance to it under Clause (3) of Sub-section (1) of Section 18 of the Reserve Bank of India Act, 1934. There is provision for audit of the accounts of banking company.
18. In the welfare State of ours it is natural for the commercial banks to be informed of the social needs. Rural credit is one of the main concerns of the Reserve Bank of India. Indian economy being still predominantly agricultural, rural credit is considered to be important for agricultural economic development of the country. Hence the Reserve Bank has approved various schemes for granting rural credit. There, must, therefore be competition among the different commercial banks for granting loans to the rural agriculturists or petty businessmen of the country. In the matter of granting loans by banks, safety of the money lent as well as the purpose of the loan being achieved are important. The bank has to be satisfied with an intending borrower in these and other relevant respects. There can, therefore, be no question of discrimination between one intending borrower and another if one is rejected on such relevant considerations. A loan granted is not a bounty.
19. The nationalisation of a commercial bank only changes its ownership from private hands to the State; but there is no change in the nature of its business in its essential characteristics. It may be that the nationalised banks may be more informed by the heeds of the country at the time but that does not transform the commercial bank into any' ancillary financial institution. It will still be concerned with its liquidity, cash reserve ratio, the ratio between its loans and deposits.
20. Loan Melas' may help in spreading: the message of banking but loans to parties' whose credit-worthiness cannot be evaluated is not to be granted. It is common knowledge that banks collect deposits from the depositors and try to deploy these funds in the best possible manner so that the interest of the depositors are safeguarded. However, the1 Banks cannot afford to lose sight of their social responsibility thrust on them after nationalisation and the basic principles of banking cannot be allowed to be given a goby. The RBI being the custodian of the country's financial system should regulate transactions in this regard.
21. The statutory liquidity ratio to be maintained by the scheduled commercial banks is subject to variation by the RBI. This also varies along with the variation in the reserve money owing to variation in the deposits and the need for credit The CCDP's lone of the objections is to maintain the credit-deposit ratio.
22. Granting of loans by the commercial banks irrespective of credit-worthiness of borrowers may result in bad-debts necessitating writing off. According to the form of balance sheet and profit and loss account prescribed in the 3rd Schedule of Banking Regulation Act, 1949whichall banks are required to follow strictly and in accordance with the practices and usages customary among the bankers, the banks are given statutory protection from disclosing the quantum of bad and doubtful debts. All commercial banks including the public sector banks make provisions for writing off bad debts. The Banks are often blamed for falling of credit and deposit ratio and delay in sanction of loans and provision of inadequate working capital. The RBI further expects every commercial bank to advance at least 1% of its total advances during a year to the weakest of the weaker section under "Differential Rate of Interest" (DRI). From the above law and practice of commercial banks we do not find the CCDP to be violative of any of them. The contention is accordingly rejected.
23. The next question is whether the CCDP suffers from any inherent defect resulting in misuse and discriminatory use of public funds to the detriment of the public. Admittedly, the impugned scheme is agreed upon by the Banks for disbursal of loans with the objective of increasing credit-deposit ratio and the banks are expected to be conscious of their responsibilities and exercise business prudence in the matter of granting loans. As the scheme envisages loans at the rate of Rs. 5000/- only to each individual it is equally to be beneficial to the small artisans and backward sections of the population and this is the avowed purpose of the scheme. Mr. Chatterjee has fairly stated that the scheme itself on its tenor does not show any defect or infirmity. The Ground Rules prepared clearly state that applications received by the banks' branches up to 31-10-87 would only be considered for the purpose of this programme, which will be implemented in all the three districts of Tripura, The United Bank of India, as the lead Bank, will organise the programme! and all banks including the Regional Rural Banks and the Tripura State Co-op. Bank will participate in the programme. Application will be accepted in the form approved by the bankers. Applicants will be identified according to the procedure laid down in the Ground Rules. The ceiling of loan has been fixed at Rs. 5,000/- for proposals not linked with subsidy of the Government. Applications from Scheduled Caste/ Scheduled Tribes beneficiaries are to be supported by SC/ST certificate. Applications sponsored by the agencies of the State Government under various anti-poverty programmes will be accorded priority and disposed in terms of RBI guidelines. Applications will be dealt with by banks strictly in terms of RBI guidelines, relating to priority sector credit with special reference to weaker sections and will further be subjected to pre-sanction scrutiny. All loan proposals must pass the test of viability and must be considered by banks techno-economically feasible. Further, loans covered under the guarantee schemes of the DICGC will only be considered by commercial banks including PRBs for the purpose of this programme. From the provisions of the CCDP along with the Ground; Rules it appears that the Reserve Bank guidelines and control will be very much applicable to the scheme. As we have seen statutorily commercial banks are bound to follow the guidelines and control of the RBI, The Banking Regulation Act also provides for audit of the accounts of the bunking companies. If either the banking or financial rules are violated the bank audit will detect those irregularities. There is, therefore, no question of misuse of public funds and discrimination in granting loans.
24. It has been submitted that the loans being granted under the scheme amounted to misuse of public funds for the benefit of a particular political party. However, the scheme nowhere says that loans will be granted to members of one political party only. What has been reported to have been said by Shri Sudhir Mazumdar cannot be verified in his absence. What is reported to have been said by the banks when the petitioners enquired about the forms cannot also be acted upon in absence of the banks themselves. Any violation of any law or statutory provision does not appear to be tenable in view of the fact that the commercial banks, while granting loans, will equally perform the function within the framework and guidelines of the RBI.
25. The next question is whether the organisation of the loans in the form of a Loan Mela' itself is objectionable? We are of the view that it would not be so. When banks' funds are available for granting loans and when individuals are not aware of such facility or such source, if a person helps another in obtaining a form and submitting it for obtaining a loan, it could not be objected to. If that one cannot be objected to, if such services are rendered by a large number of individuals that also cannot be objected to. When there can be no objection to help rendered by a group of individuals, there should be no objection to such help being rendered at a time in the form of a 'Loan Mela', which provides the motivation for such action. No objection can also be taken on the ground of the helpers being of a political party.
26. The next question is whether distribution of the forms through a particular political party would be discriminatory? To answer this question materials must be there to hold that the lead bank and the other banks gave all the forms to Congress (I) for distribution. Apart from news paper reports, there is no means for verification. The banks and Shri Sudhir Mazumdar are not before us, Not only about the distribution of forms, the entire channel is allegedly being prepared by Congress (I). However, the scheme itself shows that only forms received up to 31-10-87 would be considered by the Bank. If the scheme is faithfully followed only the forms submitted prior to that date would come under the scheme. As regards the statements made by different persons, they having not been imp leaded in this case no notice could be served on them and without affording any opportunity to them to state their case, we refrain from expressing any opinion on those statements.
27. The next question is, whether the petitioners have any grievance or whether they are genuinely aggrieved by the CCDP? ; We categorically asked Mr.' Chatterjee whether a direction to the banks to provide loan application forms to the three petitioners would meet the ends of justice; and we have been told that it would not be so as thousands of persons similarly situated are deprived of such forms. Thus, the petitioner has been ' filed with altruistic object said to be in the nature of public interest litigation taking the general cause of all such intending borrowers. It is true that public interest litigation is not an adversary type of litigation and social justice has to be done in such cases. However, the fact that the ensuing election in the Stale of Tripura is impending, has not been denied; and this petition being directed against the Congress (I) has political flavour. A public interest litigation cannot be equated to a political interest litigation and as the facts stand at present we refrain from considering or expressing anything on the political aspect of the question and we confine ourselves only to the legal aspect of the matter.
28. The next question is whether there is discrimination in granting largesses? It is true that though loans are not largesses in the strict sense of the term, the granting of loan to an individual does confer some benefit on him and discriminatory granting of loans will be violative of Article 14 of the Constitution. We find no discrimination between individuals or irrelevant or extraneous consideration in this regard. Again, if forms are not available with the banks as stated by the petitioners and they are made available by the banks through extraneous sources and it results in deprivation there may be procedural infirmity in the matter. But in the instant case in the absence of the banks and in the absence of adequate materials it is difficult to hold that the forms were given to the Congress (I) by the banks themselves. Besides, in face of the certificates granted by the Indian Bank, Tripura Gramin Bank, Union Bank of India, UCO Bank, Bank of Baroda, Indian Overseas Bank and the endorsement on the application addressed to Regional Manager of UBI, West Tripura, that no such form could be distributed in this region so far, it appears that these banks have not distributed such forms. However, this does not necessarily mean that forms were supplied either by these banks or by some other sources to Congress (I). When a form is prescribed it does not necessarily mean the paper on which the form is printed. We cannot hold that it was not possible on the part of the petitioners to prepare and submit such forms as has been prescribed by the Bank. Again, this has to be considered in light of the provision in the scheme itself that only forms received on or before 31-10-87 would be considered under it. That date is over by now. There is no material to hold that no forms were received before that date.
29. The next question is whether the banks have surrendered their functions? As the banks themselves are not before us and all the certificates produced before us were obtained only on 26-12-87 i.e., after the petition was moved before this Court, we refrain from expressing any opinion on these certificates. There is nothing to show in view of the above certificates that the banks have been surrendering their functions and abdicating their responsibilities under the scheme. As the loans will be granted by the banks and nothing has been shown that the banks have already granted the loans under the extraneous considerations and the they would not grant the loans in accordance with the RBI's instructions, if any, and the rules and practice of banking, no infirmity could be found to the scheme itself on that ground. The contention is to be rejected.
30. As regards the submission that public funds are being utilised for political benefits of certain party, we feel that the loans are meant for the recipients who are the beneficiaries of the scheme and nothing has been shown to indicate that the loans are being granted to the benefit of any political party only. On the other hand, we find that the scheme is likely to be beneficial particularly to the poor and backward sections of the people of Tripura and as such it cannot be attacked on the ground of its benefits being detrimental to any other party.
31. We are also of the view that the fact that earlier schemes were pending while this new CCDP scheme has been accepted by the banks would not invalidate the scheme, inasmuch as it is common knowledge that a bank may have various schemes for granting loans and advances and one would not necessarily exclude the others. No statutory violation has been pointed out in this regard.
32. Next question is whether loans have been granted on extraneous consideration? A loan is not largess in the same sense as grant of a contract; inasmuch as the ground of loans is subject to bank's rules and practice and the bank has the discretion in the interest of safety and liquidity of the bank and nothing has been shown in this case that discretion has been exercised on extraneous considerations. The decisions in Ramana Dayaram Shetty v. International Airport Authority, AIR 1979 SC 1628; Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir, AIR 1980 SC 1992; and Ajay Hasia v. Khalid Mujib Sehravardi, (1981 ) SCC 722 have to be applied to the facts of this case bearing that distinction in mind. The stage for application of this principle has not yet come as the loans admittedly have not yet been granted. On the other hand, we feel that in such matters relating to banking transactions the law and practice of banking and the relevant provisions of the Reserve Bank of India Act, the Banking Regulation Act, and the Companies Act including the provisions for preparation of accounts and their audit, would take sufficient care of the loans granted at the 'Loan Mela'.
33. In the result, for the foregoing reasons, we do not find any merit in this petition and it is, accordingly, rejected at the threshold.