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The court restrained from invoking a mandamus because under the banking regulation act, 1949 the matter is not to be subjected to the scrutiny of the courts: High court of Punjab and Haryana at Chandigarh

Mandamus writ petition i.e., a judicial writ issued as a command to an inferior court or ordering a person to perform a public or statutory duty directed towards the respondent bank (Bank of India) for charging a lower rate of interest. However, under section 21 -A of the banking regulation act, 1949 i.e., the Rates of interest charged by banking companies are not to be subjected to scrutiny by courts. This judgment and order were given in the high court of Punjab and Haryana at Chandigarh on 5/07/2021 by Hon’ble Mr. Justice Jaswant Singh and Hon’ble MR. Justice Sant Parkash in the case of M/s. Kool tech Infra and Logistic, Jalandhar v/s the bank of India and others in a civil writ petition No. 7361 of 2021, the proceedings of the court were held in a virtual platform due to covid-19.

In this case, the petitioner is a registered partnership firm, this firm engaged in the business of an integrated cold chain unit for procuring, processing, and the preservation of fruits and vegetables situated at Kapurthala.  According to the vide memo dated 07/07/2012, the bank of India sanctioned a term of Rs. 7.50 crores with certain terms and conditions. The petitioner set out few grievances regarding the same that the respondent bank (Bank of India) that in the light of clause 34, the bank of India is not granting the benefit of concessional rate of interest i.e. An interest concession is a reduction, compared with commercial interest rates, in the interest rate charged on a loan taken out. 

The petitioner filed for a Mandamus writ, directed towards the respondent bank (Bank of India) for charging a lower rate of interest. However, under section 21 -A of the banking regulation act, 1949 i.e., the Rates of interest charged by banking companies are not to be subjected to scrutiny by courts. The courts conceded that the issue of charging rates of interest is not something that falls within the scope of the interference by the court. Also, according to the banking ombudsman scheme 2006, issued by the reserve bank of India means a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services covered under the grounds of complaint specified under Clause 8 of the Banking Ombudsman Scheme 2006 (As amended up to July 1, 2017). 

The court concluded that “It is not disputed that the petitioner had approached the Ombudsman concerned (within the jurisdictional area) raising the aforesaid dispute, which was closed vide order dated June 2018 (Annexure P-16). It is also admitted that the said order would be appealable before the Appellate Authority under Clause 14 of the said Scheme for non-exercise of the jurisdiction on the grounds recited in Clause 8 of the Scheme.” The court held that they weren’t convinced to invoke the writ jurisdiction, and further, the counsel prayed to withdraw the present petition so as to avail remedy with law. The court dismissed the case as prayed by the counsel of the petitioners.

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