No Writ Jurisdiction against Private Commercial Banks: Kerala HC notes South Indian Bank not ‘State’ under Art. 12 [Read Order]

The Kerala High Court has held that a private commercial bank is not amenable to writ jurisdiction under Article 226 of the Constitution of India, noting that South Indian Bank being a private bank entity does not fall under the ambit of State under Article 12 of the Constitution of India.

The respondent herein, Sheela Francis Parakkal had filed a writ petition seeking a declaration that the bank had no authority to retain their original title deeds after closure of a loan account, along with a direction for release of the documents.

A Single Judge of the Kerala High Court delivered a judgment dated April 8, 2025, declaring that the bank lacked authority to retain the title deeds after closure of loanaccount. However, the Single-Bench declined to provide directions for release of the documents citing its non-availability and imposed costs of ₹50,000 on the bank while directing the petitioner to approach another forum..

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Aggrieved, South Indian Bank preferred an intra-court appeal under Section 5 of the Kerala High Court Act, contending that the writ petition ought not to have been entertained at the very outset as the bank is a private commercial entity and the relief sought did not relate to discharge of any public function. The bank argued that the Single Judge erred in proceeding to decide the matter on merits and in imposing costs without addressing its very maintainability.

Counsel for the respondents opposed the appeal, submitting that private banks discharge also public functions and that prolonged retention of documents even after loan closure violated their fundamental rights.

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The Division Bench comprising Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar V.M.examined the law on amenability of private banks to writ jurisdiction.

The court referred to the Supreme Court decision in Federal Bank Ltd. v. Sagar Thomas and others (2003) where it was held that scheduled banks registered under the Companies Act do not fall within the ambit of “State” under Article 12, save in limited circumstances where a statutory public duty is involved. It was also stated that mere regulatory oversight by the Reserve Bank of India does not render private banks public authorities.

The Court also referred to its own earlier decision in Mathew Ignitious C. v. Catholic Syrian Bank Limited (2019) where it was held that a scheduled bank registered as a company under the Companies Act does not fall within the purview of ‘State’ or other authorities under Article 12 of the Constitution of India is thus not amenable to writ jurisdiction.

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Accordingly, the Division Bench concluded that the Single Judge committed an error in assuming writ jurisdiction and issuing directions, and allowed the writ appeal, setting aside the order in the earlier writ petition as not maintainable. The borrowers were left at liberty to work out their remedies in accordance with law before the appropriate forum.

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