Karnataka Bank Not 'State' Under Article 12, Writ Petition Seeking Release Of Funds Held In Fixed Deposit Not Maintainable: High Court

The Karnataka High Court has held that a writ petition seeking a direction to release funds kept in Fixed Deposits with Karnataka Bank Ltd was not maintainable.

A single judge bench of Justice K V Aravind said “Writ petition is rejected as the same is not maintainable under Article 226 of the Constitution of India as the second respondent-Bank is not a "State" under Article 12 of the Constitution of India. The petitioner is at liberty to seek appropriate remedy before the appropriate forum, in accordance with law, if so advised.”

Petitioner Rajesh Kumar Shetty had approached the court questioning the endorsements issued by the bank in refusing to permit the petitioner to withdraw the fixed deposits of Rs.1,34,37,826.

A suit was filed by T Subbaya Shetty, wherein the petitioner was not made as a party. The first respondent applied under Order XXXIX, Rule 1 and 2 of CPC seeking a temporary injunction against the defendants/banks prohibiting defendants from allowing any person to withdraw the amounts standing to the credit of Geetha T. Punja and Dr. P. Thimappa Punja, until disposal of the suit and grant of such other reliefs.

The Trial Court passed an order of temporary injunction on 19.11.2022 and the same was extended till 20.04.2023.

It was submitted that since the fixed deposits were in the name of the petitioner, he had applied under Order I Rule 10(2) read with Section 151 of CPC to implead himself as defendant No.13. The Trial Court allowed the application and permitted the petitioner to be arrayed as defendant No.13.

The petitioner as defendant No.13 applied under Order XXXIX Rule 4 of CPC to vacate the interim order. It was submitted that the Trial Court proceeded to record a finding that the entire amount standing in the account of Smt. Geetha T. Punja had been transferred during the lifetime of Dr. P. Thimappa Punja based on the nomination made by Smt. Geetha T. Punja.

It was claimed that the plaintiff under the will of Smt. Geetha T. Punja had no authority to seek any relief in respect of the account of Dr. P.Thimappa Punja. Hence, the Trial Court vacated the temporary injunction.

However, it was argued that the Bank proceeded to issue a letter dated 24.04.2023 to the petitioner stating that in view of the fixed deposits being involved in a claim suit in O.S.No.302/2022 pending before the Senior Civil Judge, Mangaluru, the Bank was unable to allow the petitioner to withdraw the amounts without a specific order of Court and suggested that the petitioner get clarification from the Court to the effect that they can withdraw the amount during pendency of the suit.

The petitioner argued that in view of the temporary injunction being vacated by the Trial Court, the respondent Bank was not justified in refusing to allow the petitioner to encash the fixed deposits and insisting on a specific order from the Trial Court.

The respondents argued that “The Bank has only issued an advisory to the petitioner in view of the pendency of the civil suit involving the very same fixed deposits to seek clarification from the Trial Court. Hence, writ petition under Article 226 of the Constitution of India is not maintainable. In view of the second respondent-Bank not being a "State" in terms of Article 12 of the Constitution of India, writ is not maintainable.”

The bench noted that it was a settled position of law that a writ petition under Article 226 of the Constitution of India is 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.

Accordingly, it was found that a writ petition compelling a bank to release money kept in fixed deposits would not be maintainable. 

Reliance was placed on the Supreme Court judgement in the case of South Indian Bank Ltd vs. Naveen Mathew Philip and another 2023 and the bench dismissed the plea as non-maintainable.

Appearance: Advocate Pavana Chandra Shetty H for Petitioner

Advocate Nataraja Ballal for R1.

Advocate A Ganesh for R2.

Citation No. 2023 LiveLaw (Kar) 478

Case Title: Rajesh Kumar Shetty And T Subbaya Shetty & ANR

Case No: Writ Petition No 11940 of 2023.

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