Orissa High Court
Prabhasini Barik vs Mahindra & Mahindra Financial .... Opp. ... on 12 December, 2025
Author: Sanjeeb K Panigrahi
Bench: Sanjeeb K Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Dec-2025 15:04:31
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.13091 of 2025
(In the matter of a petition under Articles 226 and 227 of the
Constitution of India, 1950).
Prabhasini Barik .... Petitioner (s)
-versus-
Mahindra & Mahindra Financial .... Opp. Party (s)
Service Limited, Mumbai & Ors.
Advocates appeared in the case through Hybrid Mode:
For Petitioner (s) : Mr. Beda Prakash Panda, Adv.
For Opp. Party (s) : Mr. Avijit Patnaik, Advocate.
CORAM:
DR. JUSTICE SANJEEB K PANIGRAHI
DATE OF HEARING:-17.10.2025
DATE OF JUDGMENT:-12.12.2025
Dr. Sanjeeb K Panigrahi, J.
1. The present writ proceedings arise from a challenge to the order dated 22.3.2025 passed in Arbitration Petition No. MHF/144042/L10/2025 by the Learned Sole Arbitrator, Shri Vinod Kumar Gandhi.
I. FACTUAL MATRIX OF THE CASE:
2. The factual background reveals that Late Pabitra Barik had
purchased the aforementioned Maruti Swift ZXI vehicle
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Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Dec-2025 15:04:31
on 28.10.2023, availing a loan of Rs. 8,22,207/- from Opposite Party No.1, Mahindra & Mahindra Financial Services Limited. The Loan Agreementdetails the contractual obligations of the borrower, including repayment over 60 monthly instalments and the governing clauses, notably Clause 25, which exclusively vests territorial jurisdiction in the courts at Chennai. The instalment schedule, the rate of interest, and the security conditions form part of Schedule-1 and Schedule-2 of the agreement, as visible from the loan documents appended in the petition.
3. It is also pertinent to note that at the time of entering into the loan agreement, the Petitioner's deceased husband was covered by a group insurance policy administered by Opposite Party No.3, Max Life Insurance.In support of this assertion, she relies upon the Certificate of Insurance which, according to her, assured payment of death benefits to the nominee upon demise of the insured. The petitioner highlights that the lender, Opposite Party No.1, is listed as the Master Policy Holder, thereby enabling it to claim the insured amount--stated to be approximately Rs. 8,05,000/-
--to cover outstanding liabilities.
4. The petitioner submits that her husband dutifully complied with the terms of the agreement until his unfortunate demise eight months later on 11.7.2024.
5. Following this event, the petitioner claims to have duly notified the lender by submitting an application on 31.7.2024, wherein she Page 2 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 informed the Opposite Parties of the demise and requested appropriate action in view of the insurance coverage aligned to the loan.
6. However, it appears that the Opposite Party No. 1 has initiated Arbitration Proceeding vide ARBP No. MHF/144042/L10/2025 before the Ld. Sole Arbitrator Shri Vinod Kumar Gandhi on account of default in making payments as per the schedule to the loan agreement.
7. In the said ARBP No. MHF/144042/L10/2025, Opposite Party No. 1 filed an application u/s 17 of the Arbitration and Conciliation Act seeking possession of the vehicle, and the Ld. Sole Arbitrator vide the impugned order dated 22.3.2025 was pleased to direct the surrender of the vehicle.
8. Aggrieved, the present Petitioner has preferred the present Writ Petition.
9. Now that the facts leading up to the instant Petition has been laid down, this Court shall endeavour to summarise the contentions of the Parties and the broad grounds that have been raised.
II. PETITIONER'S SUBMISSIONS:
10. The Ld. Counsel for the Petitioner challenges the arbitral order dated 22.03.2025 on the ground that the proceedings were unlawfully initiated and concluded against her deceased husband, Late Pabitra Barik, who passed away on 11.7.2024. It is asserted that the arbitration petition was filed months after his death and without any Page 3 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 notice to her as legal heir or nominee, thereby vitiating the proceedings for want of jurisdiction and violation of natural justice. Despite her written intimation dated 31.7.2024 informing the lender of the borrower's demise, the arbitrator proceeded ex parte, made no effort to ascertain the legal representatives, and ordered repossession and auction of the hypothecated vehicle. The petitioner further submits that the arbitral proceedings were conducted at Mumbai contrary to Clause 25 of the Loan Agreement vesting exclusive jurisdiction in courts at Chennai, rendering the proceedings territorially incompetent.
11. The petitioner also contends that the loan was covered under a group insurance policy issued by Max Life Insurance, under which Opposite Party No.1, as Master Policy Holder, was entitled to claim the insured amount of approximately Rs. 8,05,000/- upon the borrower's death. It is submitted that the lender's failure to invoke the insurance cover and its simultaneous attempt to recover the same dues through arbitration amounts to impermissible double recovery and an unconstitutional deprivation of property. The absence of any invocation notice under the Arbitration and Conciliation Act, 1996, coupled with the initiation of proceedings against a deceased person, is asserted to invalidate the impugned order. The petitioner therefore seeks quashing of the arbitral order, protection against coercive steps such as repossession or auction of the vehicle, and recognition that the lender had an alternative remedy through the insured Page 4 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 mechanism rather than proceeding against the estate of the deceased borrower.
III. OPPOSITE PARTYS' SUBMISSIONS:
12. Per contra, the Ld. Counsel for the Opposite Parties Company would, at the outset, raise a preliminary objection regarding the maintainability of the Writ Petition under Articles 226 and 227 of the Constitution. It is contended that the dispute arises purely from a contractual relationship embodied in the Loan Agreement dated 28.10.2023, and that the respondent is a private, non-State entity, not falling within the definition of "State" or "authority" under Article
12. It is argued that the writ jurisdiction cannot ordinarily be invoked to challenge actions of a private lender arising out of private contractual obligations, particularly where the agreement itself contains an arbitration clause (Clause 24/25) and a mechanism for resolution of disputes. It is further submitted that the petitioner seeks to bypass the statutory remedies available under the Arbitration and Conciliation Act, 1996--such as recourse under Sections 34 or 37-- and therefore the writ petition constitutes an impermissible attempt to invoke extraordinary jurisdiction in a domain governed by an alternate efficacious remedy.
13. On merits, it is contended that the initiation of arbitral proceedings and subsequent measures were undertaken strictly in accordance with the terms of the Loan Agreement, including the right to appoint a sole arbitrator and to enforce security upon the borrower's default. Page 5 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 The arbitration was invoked due to continuous non-payment of instalments, and the lender acted under contractual rights that survive even in the event of the borrower's death, subject to claim settlement and recovery.
14. It is further submitted that any grievance regarding notice, jurisdiction, or the arbitrator's conduct must be agitated before the arbitral forum or through statutory remedies--and that a writ petition seeking to invalidate arbitral proceedings is neither suitable nor maintainable in law.
IV. ISSUE FOR CONSIDERATION:
15. Having heard the parties and perused the materials available on record, this court here has identified the following solitary germane issue to be determined:
A. Whether the impugned order passed by the Ld. Sole Arbitrator can be interfered with by this Court in exercise of its writ jurisdiction?
V. ISSUE A: WHETHER THE IMPUGNED ORDER PASSED BY THE LD. SOLE ARBITRATOR CAN BE INTERFERED WITH BY THIS COURT IN EXERCISE OF ITS WRIT JURISDICTION? Scope of this Writ Court's interference in orders passed by an Arbitral Tribunal
16. The law is well settled that Arbitral Tribunals are a species of tribunals over which the High Court exercises writ jurisdiction. Challenge to an order of an arbitral tribunal can be raised by way of a writ petition. In Union of India v. R. Gandhi, President Madras Bar Page 6 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 Association1 the Supreme Court observed on the question as to what constitutes 'Courts' and 'Tribunals' as under:
"38. The term 'Courts' refers to places where justice is administered or refers to Judges who exercise judicial functions. Courts are established by the state for administration of justice that is for exercise of the judicial power of the state to maintain and uphold the rights, to punish wrongs and to adjudicate upon disputes. Tribunals on the other hand are special alternative institutional mechanisms, usually brought into existence by or under a statute to decide disputes arising with reference to that particular statute, or to determine controversies arising out of any administrative law. Courts refer to Civil Courts, Criminal Courts and High Courts. Tribunals can be either private Tribunals (Arbitral Tribunals), or Tribunals constituted under the Constitution (Speaker or the Chairman acting under Para 6(1) of the Tenth Schedule) or Tribunals authorized by the Constitution (Administrative Tribunals under Article 323A and Tribunals for other matters under Article 323B) or Statutory Tribunals which are created under a statute (Motor Accident Claims Tribunal, Debt Recovery Tribunals and consumer fora). Some Tribunals are manned exclusively by Judicial Officers (Rent Tribunals, Motor Accidents Claims Tribunal, Labour Courts and Industrial Tribunals). Other statutory Tribunals have Judicial and Technical Members (Administrative Tribunals, TDSAT, Competition Appellate Tribunal, Consumer fora, Cyber Appellate Tribunal, etc)."
17. Similar observations were made by the Supreme Court in SREI Infrastructure Finance Limited2as under:
1
(2010) 11 SCC 1 Page 7 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 "14. Arbitration is a quasi judicial proceeding, equitable in nature or character which differs from a litigation in a Court. The power and functions of arbitral tribunal are statutorily regulated. The tribunals are special arbitration with institutional mechanism brought into existence by or under statute to decide dispute arising with reference to that particular statute or to determine controversy referred to it. The tribunal may be a statutory tribunal or tribunal constituted under the provisions of the Constitution of India. Section 9 of the Civil Procedure Code vests into the Civil Court jurisdiction to entertain and determine any civil dispute. The constitution of tribunals has been with intent and purpose to take out different categories of litigation into the special tribunal for speedy and effective determination of disputes in the interest of the society. Whenever, by a legislative enactment jurisdiction exercised by ordinary civil court is transferred or entrusted to tribunals such tribunals are entrusted with statutory power. The arbitral tribunals in the statute of 1996 are no different, they decide the lis between the parties, follows Rules and procedure conforming to the principle of natural justice, the adjudication has finality subject to remedy provided under the 1996 Act. Section 8 of the 1996 Act obliges a judicial authority in a matter which is a subject of an agreement to refer the parties to arbitration. The reference to arbitral tribunal thus can be made by judicial authority or an arbitrator can be appointed in accordance with the arbitration agreement under Section 11 of the 1996 Act."
18. Thus, the Apex Court held that arbitral tribunals are private tribunals unlike those tribunals set up under the statute or specialized tribunals under the Constitution of India. Thus, a Petition 2 (2018) 11 SCC. 470 Page 8 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 under Article 227 challenging orders of an Arbitral Tribunal would be maintainable.
19. Coming now to the question as to what would be the scope of interference under Article 226/227 against orders passed by the Arbitral Tribunals, though, a number of judgments have been cited by both parties, recent decisions of the Supreme Court and of this Court have settled the issue.
20. While there is no doubt that the arbitral tribunal is a tribunal over which writ jurisdiction can be exercised, the said interference by a writ court is limited in nature. Recently, in Deep Industries Ltd. v. ONGC Ltd.3 decided on 28th November, 2019, the Supreme Court considered S.B.P. & Company v. Patel Engineering Ltd.4 and Fuerst Day Lawson Limited v. Jindal Exports Limited5 and observed as under:
"17. This being the case, there is no doubt whatsoever that if petitions were to be filed Under Articles 226/227 of the Constitution against orders passed in appeals Under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non-obstante Clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed Under Article 227 against 3 (2020) 15 SCC 706 4 (2005) 8 SCC 618 5 (2011) 8 SCC 333 Page 9 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 judgments allowing or dismissing first appeals Under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us herein above so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction."
21. Recently, in Surender Kumar Singhal v. Arun Kumar Bhalotia6 the Delhi High Court, after considering all the decisions, of the Supreme Court, Deep Industries (supra); Bhaven Construction v. Sardar Sarovar Narmada Nigam Ltd.7; Punjab State Power Corpn. Ltd. v. EMTA Coal Ltd.8; Virtual Perception OPC (P) Ltd. v. Panasonic India (P) Ltd.9 and Ambience Projects & Infrastructure (P) Ltd. v. Neeraj Bindal10 has laid down circumstances in which such petitions ought to be entertained. The relevant portion of the said judgment reads as under:
"24. A perusal of the abovementioned decisions, shows that the following principles are well settled, in respect of the scope of interference under Articles 226/227 in challenges to orders by an Arbitral Tribunal including orders passed under Section 16 of the Act:6
2021 SCC OnLine Del 3708 7 (2022) 1 SCC 75 8 (2020) 17 SCC 93 9 2022 SCC OnLine Del 566 10 2021 SCC OnLine Del 4023 Page 10 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31
(i) An Arbitral Tribunal is a tribunal against which a petition under Articles 226/227 would be maintainable.
(ii) The non obstante clause in Section 5 of the Act does not apply in respect of exercise of powers under Article 227 which is a constitutional provision.
(iii) For interference under Articles 226/227, there have to be exceptional circumstances.
(iv) Though interference is permissible, unless and until the order is so perverse that it is patently lacking in inherent jurisdiction, the writ court would not interfere.
(v) Interference is permissible only if the order is completely perverse i.e. that the perversity must stare in the face.
(vi) High Courts ought to discourage litigation which necessarily interfere with the arbitral process.
(vii) Excessive judicial interference in the arbitral process is not encouraged.
(viii) It is prudent not to exercise jurisdiction under Articles 226/227.
(ix) The power should be exercised in "exceptional rarity" or if there is, "bad faith" which is shown.
(x) Efficiency of the arbitral process ought not to be allowed to diminish and hence interdicting the arbitral process should be completely avoided."
26. A perusal of the above would show that it is only under exceptional circumstances or when there is bad faith or perversity that writ petitions ought to be entertained."
Page 11 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31
22. The power of superintendence vested in High Courts under Article 227 of the Constitution of India is a constitutional safeguard designed to ensure that subordinate courts and tribunals act within their jurisdiction and adhere to principles of fairness, legality, and procedural propriety. However, the exercise of this power in the context of arbitration proceedings governed by the Arbitration and Conciliation Act, 1996, has been subject to considerable judicial scrutiny and debate. The Arbitration Act is a self-contained code aimed at promoting minimal judicial interference and ensuring the speedy resolution of disputes through a quasi-judicial process. Section 5 of the Act categorically mandates that judicial authorities shall not intervene in matters governed by the Act, except where expressly provided. The Supreme Court in SBP & Co. v. Patel Engg. Ltd.11 emphasized the autonomy of the arbitral process, affirming that courts must respect the statutory scheme. While Article 227 is a constitutional provision and therefore cannot be ousted by statutory language, the Courts have repeatedly held that this extraordinary jurisdiction must be exercised with great restraint, especially in arbitration matters. Any intervention should be confined to cases where there is a patent lack of jurisdiction or perversity that is apparent on the face of the record. The overarching goal is to preserve the integrity and efficiency of the arbitral process. 11 (2005) 8 SCC 618 Page 12 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31
23. In recent judicial pronouncements, including Deep Industries (supra), the Apex Court has emphasized that although Article 227 cannot be curtailed by any statutory enactment like Section 5 of the Arbitration and Conciliation Act, the High Courts must exercise self- restraint while considering interference in arbitral proceedings. The Court acknowledged the supremacy of the constitutional provision but cautioned that indiscriminate use of writ jurisdiction would undermine the legislative objective of speedy and efficient dispute resolution through arbitration. Importantly, the Court held that only in instances where the order suffers from a patent lack of jurisdiction or where there is a manifest miscarriage of justice should the High Court step in. The rationale was rooted in the principle that arbitral tribunals, while not civil courts, are adjudicatory bodies that derive their authority from party autonomy and statutory recognition. Excessive judicial interference in this sphere would erode the foundational principles of arbitration and compromise its purpose as an alternate dispute resolution mechanism. The Court thus laid down a threshold of "exceptional rarity" as a guiding principle. Consequently, even if maintainability under Article 227 is established, the jurisdiction ought not to be exercised merely because an error of law or fact exists, unless such error amounts to perversity or a jurisdictional transgression. The Court was particularly wary of the potential derailment of the arbitral process if supervisory jurisdiction were exercised routinely over orders passed either by Page 13 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 arbitral tribunals. Acknowledging the supremacy of the Constitution and the enduring nature of Article 227, the Court nevertheless maintained that statutory policy must be respected and judicial review should not be used as a backdoor appeal mechanism. The Court held that although the power under Article 227 is untouched by the non obstante clause in Section 5, such power must be exercised with utmost circumspection and only in cases where orders are so patently lacking in inherent jurisdiction or are manifestly perverse that judicial conscience is shocked. This nuanced stance balances constitutional principles with statutory purpose. Consequently, High Courts must tread carefully, ensuring that their intervention does not undermine the finality and expedition that the Arbitration Act seeks to promote. This decision thus reinforces the principle that while constitutional remedies remain available, they are not to be used as substitutes for appeals explicitly barred by a self-contained statute such as the Arbitration and Conciliation Act.
24. The decision in Surender Kumar Singhal (supra), further crystallized the judicial standards governing Article 227 interference in arbitral matters. After analyzing key Supreme Court precedents, the Delhi High Court unequivocally held that the supervisory power under Article 227 can only be exercised when there is demonstrable perversity or the order of the arbitral tribunal is patently without jurisdiction. The Court noted that arbitral tribunals, being private adjudicatory bodies created under the Arbitration and Conciliation Page 14 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 Act, 1996, are distinct from statutory or constitutional tribunals. Despite this, given their function of adjudicating legal disputes and their obligation to adhere to principles of natural justice, they fall within the scope of judicial review under Article 227.
25. The Court warned that permitting Article 227 challenges as a routine remedy would effectively create a "second bite at the cherry,"
contrary to the Arbitration Act's policy and purpose. Therefore, only orders reflecting egregious illegality or mala fides warrant constitutional scrutiny. The judgment also crystallized the principles governing the exercise of writ jurisdiction over arbitral orders, emphasizing that such powers under Article 227 must be exercised only in the rarest of rare cases. The decision made clear that arbitral tribunals, though private in nature, are still "tribunals" within the meaning of Article 227 and therefore subject to the High Court's supervisory control. However, this supervisory control is not equivalent to appellate review. Rather, the writ court's role is confined to correcting manifest illegality, bad faith, or perversity so glaring that it indicates a patent lack of jurisdiction. The High Court reiterated that if orders passed by arbitral tribunals were routinely challenged and overturned under Article 227, it would nullify the entire purpose of a separate arbitration regime and revert the process to the very judicial delays it sought to eliminate. The judgment stressed the necessity of discouraging such litigation unless the arbitral order offends the basic structure of justice.Page 15 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31
26. While Article 227 cannot be statutorily ousted due to its constitutional origin, its invocation must be exercised with extreme caution in arbitration matters. If High Courts were to routinely entertain petitions under Article 227 against orders passed under the Arbitration Act, the entire purpose of creating a streamlined arbitral regime would be frustrated. Arbitration proceedings, by their very nature, are intended to be quick and efficient alternatives to traditional litigation. Excessive judicial interference undermines this objective and delays finality in commercial disputes. Interference of this Court under Article 227 is not only exceptional but should be exercised in situations where the order in question is so perverse that it lacks inherent jurisdiction. It reaffirmed that routine errors of law or fact, or disagreements on the merits, cannot be grounds for invoking this extraordinary jurisdiction. Therefore, unless there is an egregious illegality or an abuse of power that offends basic judicial conscience, this Court must refrain from invoking Article 227.
27. The scope of writ jurisdiction under Articles 226 and 227 of the Constitution of India is inherently supervisory and discretionary. It is designed to ensure that lower courts and tribunals act within the bounds of their jurisdiction and follow the principles of natural justice. However, when it comes to matters arising from arbitration, the legislature has created a complete and self-contained mechanism under the Arbitration and Conciliation Act, 1996, providing specific remedies against arbitral awards. Writ power, though broad, must be Page 16 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 exercised sparingly and only to correct jurisdictional or procedural errors.
28. This Court has now established that it may interfere with orders passed by an Arbitral Tribunal if the circumstances so warrant. However, the next question that emerges for this Court's consideration is whether a writ may lie at all against the present Opposite Parties?
On the maintainability of the present Petition
29. The Court has carefully considered the pleadings, annexures, and arguments presented. The petitioner's grievance centres around the order dated 22.3.2025 passed in Arbitration Petition No. MHF/144042/L10/2025 directing repossession and auction of the hypothecated vehicle. The petitioner challenges the order on several grounds--primarily that the arbitration proceedings were conducted against a deceased borrower, that there was no notice, and that the territorial and contractual stipulations were violated. While these assertions merit factual appreciation, the threshold issue that arises is whether a writ under Article 226 is maintainable against the present respondents, who are admittedly private finance companies, namely Mahindra & Mahindra Financial Services Limited.
30. The petitioner has not disputed that Opposite Party No.1, the lending institution, is a private non-banking finance company incorporated under the Companies Act. Thus, at the outset, the Page 17 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 maintainability of the writ petition must be examined in the light of established constitutional jurisprudence.
31. The Apex Court in Federal Bank Ltd. v. Sagar Thomas12, held as follows:
"18. From the decisions referred to above, the position that emerges is that a writ petition under Article 226 of the Constitution of India may be maintainable against (i) the State (Government); (ii) an authority; (iii) a statutory body; (iv) an instrumentality or agency of the State; (v) a company which is financed and owned by the State; (vi) a private body run substantially on State funding; (vii) a private body discharging public duty or positive obligation of public nature; and (viii) a person or a body under liability to discharge any function under any statute, to compel it to perform such a statutory function."
32. This Court considers it necessary to reiterate that the writ jurisdiction under Article 226 is not a universal remedy available for all grievances arising out of private commercial arrangements. The jurisdiction is structured to supervise the performance of public duties and to ensure that statutory obligations are carried out in accordance with law. It is not intended to be invoked in disputes that have their genesis in consensual private contracts, such as loan arrangements between a borrower and a private financial institution. A lender advancing money for purchase of a vehicle does so as part of its commercial operations, not in discharge of any public or (2003) 10 SCC 733 12 Page 18 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 statutory mandate. Therefore, unless a petitioner demonstrates that the lender is bound by a statutory obligation whose enforcement is being sought, or that the lender performs a public function attracting constitutional scrutiny, a writ petition cannot be entertained.
33. This Court notes that private financial institutions, although operating in a regulated field, remain independent commercial enterprises whose primary objective is the conduct of business. Regulatory oversight imposed on them is designed to secure systemic banking stability, consumer protection, and market discipline. Such oversight does not convert these entities into public authorities nor does it clothe their contractual dealings with a public- law character. Lending under a vehicle loan scheme is a purely voluntary commercial activity undertaken for profit; it does not acquire the attributes of a statutory duty merely because the sector is monitored by regulatory bodies. Consequently, disputes arising from such lending relationships fall squarely within the realm of private law.
34. In determining amenability to writ jurisdiction, this Court considers it apposite to emphasise the distinction between statutory corporations created to fulfil public functions and private companies incorporated under the general law for commercial purposes. The latter are neither conceived as instruments of the State nor entrusted with public responsibilities. The fact that a financial institution may cater to a large consumer base or that its services indirectly touch the Page 19 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 public does not, in itself, endow it with the character of a public authority. Private interest in its operations should not be confused with public duty. Therefore, a borrower's grievance concerning the terms, enforcement, or consequences of a loan agreement does not metamorphose into a public-law dispute.
35. A writ may be issued against a private body only where the petitioner identifies a statutory obligation that such body is bound to perform or demonstrates that the respondent exercises powers of a public nature affecting corresponding legal rights. This Court observes that the grant of a loan, the enforcement of security, or the recovery of outstanding dues flow entirely from contractual stipulations mutually agreed upon between the parties. No statutory right is created in favour of either party by virtue of entering into such financial transactions. Absent the presence of a statutory duty, the extraordinary jurisdiction of this Court cannot be invoked to adjudicate complaints arising from alleged non-performance or improper performance of purely contractual terms.
36. The enforcement actions undertaken by a private lender--whether in relation to repayment defaults, repossession of hypothecated assets, or invocation of arbitration--are all matters resting upon contractual authorisation. These actions do not originate in statutory compulsion nor do they amount to the exercise of sovereign or quasi-sovereign power. The mere fact that they may bear significant consequences for the borrower does not transform them into public duties. A party Page 20 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 aggrieved by such measures has recourse to the remedies provided in contract law, consumer law, or arbitration law, as the case may be, but cannot seek constitutional intervention as though the lender were exercising public authority.
37. This Court further notes that the structure and governance of such financial companies reinforce their private nature. Their management is controlled by shareholders; their capital is privately held; their operations are conducted independently of government policy except to the limited extent of regulatory compliance. There is no governmental control, ownership, or deep and pervasive supervision in the sense relevant for Article 12 analysis. In the absence of such attributes, it is impermissible to treat the private lender as a limb of the State merely because the financial sector is subject to statutory regulation.
38. The obligations between a borrower and lender arise from the loan agreement and associated documents such as hypothecation deeds or arbitration clauses. These are voluntary instruments and do not acquire statutory force. This Court stresses that a writ of mandamus cannot be issued to enforce privately created obligations, even if they are formally documented. What can be compelled through writ is the performance of a duty imposed by law, not the fulfilment of a contractual promise. Where the borrower alleges arbitrary, unfair, or oppressive conduct by the lender, the remedy lies in appropriate civil proceedings or statutory forums specifically established for Page 21 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 regulating such disputes, not in the extraordinary jurisdiction of this Court.
39. If every action of a private lender were to be examined under public- law principles merely because its business is regulated, the result would be an unwarranted and expansive intrusion of constitutional courts into ordinary commercial transactions. Such an approach would distort the boundaries that separate public-law remedies from private-law obligations.
40. Recently, in S. Sobha v. Muthoot Finance Ltd.13 the Supreme Court whilst dealing with a matter pertaining to a similar financial institution was pleased to hold that:
"9. We may sum up thus:
"(1) For issuing writ against a legal entity, it would have to be an instrumentality or agency of a State or should have been entrusted with such functions as are Governmental or closely associated therewith by being of public importance or being fundamental to the life of the people and hence Governmental.
(2) A writ petition under Article 226 of the Constitution of India may be maintainable against (i) the State Government; (ii) Authority; (iii) a statutory body; (iv) an instrumentality or agency of the State; (v) a company which is financed and owned by the State; (vi) a private body run substantially on State funding; (vii) a private body discharging public duty or positive obligation of public nature; and (viii) a person or a body under liability to discharge any function under any Statute, to compel it to perform such a statutory function.
2025 SCC OnLine SC 177 13 Page 22 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 (3) Although a non-banking finance company like the Muthoot Finance Ltd. with which we are concerned is duty bound to follow and abide by the guidelines provided by the Reserve Bank of India for smooth conduct of its affairs in carrying on its business, yet those are of regulatory measures to keep a check and provide guideline and not a participatory dominance or control over the affairs of the company.
(4) A private company carrying on banking business as a Scheduled bank cannot be termed as a company carrying on any public function or public duty.
(5) Normally, mandamus is issued to a public body or authority to compel it to perform some public duty cast upon it by some statute or statutory rule. In exceptional cases a writ of mandamus or a writ in the nature of mandamus may issue to a private body, but only where a public duty is cast upon such private body by a statute or statutory rule and only to compel such body to perform its public duty.
(6) Merely because a statue or a rule having the force of a statute requires a company or some other body to do a particular thing, it does not possess the attribute of a statutory body.
(7) If a private body is discharging a public function and the denial of any rights is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial but, nevertheless, there must be the public law element in such action.
(8) According to Halsbury's Laws of England, 3rd Ed. Vol.30, p.682, "a public authority is a body not necessarily a county council, municipal corporation or other local authority which has public statutory duties to perform, and which perform the duties and carries out its Page 23 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 transactions for the benefit of the public and not for private profit". There cannot be any general definition of public authority or public action. The facts of each case decide the point."
41. Applying these principles, this Court concludes that a dispute arising from the grant of a vehicle loan, its repayment terms, enforcement actions, or invocation of arbitration remains a private commercial matter. The borrower does not complain of breach of any statutory duty, nor is the lender shown to be exercising public functions. The grievance concerns the manner in which contractual rights were exercised, which cannot, by itself, ground a writ petition. Article 226 cannot be utilised to restructure or supervise private financial arrangements.
42. Accordingly, this Court holds that the writ petition is not maintainable in respect of grievances flowing exclusively from the contractual relationship between the petitioner's husband and the private lending institution. The constitutional remedy is not intended to regulate private commercial conduct nor to serve as an appellate forum over contractual enforcement mechanisms. In the absence of a public duty or statutory infraction, this Court cannot intervene in what is essentially a dispute of private law. Parties must pursue remedies available under the ordinary civil and statutory framework governing financial transactions. The writ jurisdiction, being extraordinary, must remain confined to public-law wrongs and Page 24 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 cannot be extended to private lending disputes lacking any public element.
43. Applying these settled principles, this Court finds that Opposite Party No.1 is neither a State agency nor an authority discharging public functions. The loan transaction with the petitioner's deceased husband was entirely private, contractual, and commercial. Enforcement of contractual remedies as to whether through arbitration or recovery measures falls squarely within the domain of private law.
44. Once it is found that the respondent is not amenable to writ jurisdiction, grievances relating to alleged procedural irregularities in an arbitral process cannot be adjudicated under Article 226. The Arbitration and Conciliation Act, 1996 provides statutory remedies, including remedies under Sections 16, 34, and 37. The existence of such alternate efficacious remedies is an additional ground militating against the exercise of extraordinary jurisdiction.
45. The petitioner's argument that the arbitration was conducted against a deceased borrower, while serious if true, remains a contractual and procedural objection that must be raised before the arbitral forum or in proceedings under the Arbitration Act, not through a writ petition.
46. Hence, this Court is of the opinion that the Petitioner's grievance, if any, must be agitated before the appropriate forum in accordance with law.
Page 25 of 26 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 18-Dec-2025 15:04:31 VI. CONCLUSION:
47. In view of the well-settled position of law and applying the same to the facts of the present case, where the Opposite Party is a private finance company, the dispute is purely contractual, alternate remedies exist, and no public law element is demonstrated herein, this Court finds no grounds to entertain the Writ Petition. Accordingly, the Writ Petition is dismissed, leaving it open to the Petitioner to pursue appropriate remedies under civil law or the Arbitration and Conciliation Act, 1996.
48. All pending applications, if any, stand disposed of.
(Dr. Sanjeeb K Panigrahi) Judge Orissa High Court, Cuttack, Dated the 12th December, 2025/ Page 26 of 26