DEBANGSU BASAK,J. - (1.) The petitioners have sought a direction upon HDFC Bank Limited to unblock a current account maintained by the first petitioner with the Bank. Learned Senior Advocate appearing for the petitioners has submitted that, the petitioners are not borrowers of the first respondent. They neither are guarantors to the first respondent. No amount is due and payable by the petitioners to the first respondent. The first respondent could not have blocked the current account of the first petitioner. Such action of the first respondent is arbitrary, illegal, without any basis and should be quashed. Relying upon Sections 5(c) and 7 of the Banking Regulation Act, 1949 and All India Reporter 2019 Calcutta page 33 (Penguin Agro Products Pvt. Ltd. & Anr. v. Union of India & Ors.) learned Senior Advocate appearing for the petitioner has submitted that, the present writ petition is maintainable. He has relied upon Sections 148 and 171 of the Contract Act, 1872 and submitted that, unless, the first petitioner bailed the goods in favour of the first respondent, which the petitioners did not do in the facts of the present case, the first respondent cannot exercise the so-called banker's lien or any right of lien over the account of the first petitioner maintained with the first respondent. He has submitted that, where, the first respondent has a policy which is contrary to law then, Constitutional Courts are entitled to enter into such arena and grant appropriate relief. In this case, the action of the first respondent is contrary to law. Relying upon Penguin Agro Products Pvt. Ltd. & Anr. (supra) learned Senior Advocate appearing for the petitioners has submitted that, Penguin Agro Products Pvt. Ltd. & Anr. (supra) relied upon 2003 Volume 10 Supreme Court Cases page 733 (Federal Bank Limited v. Sagar Thomas & Ors.). He has submitted that, Federal Bank Limited (supra) as well as Penguin Agro Products Pvt. Ltd. & Anr. (supra) do not say that, no writ petition against a Bank is maintainable. In the facts of the present case, according to him, a writ Court should intervene.
(2.) Learned Senior Advocate appearing for the first and the second respondents has submitted that, the first petitioner maintains a current account with the first respondent. The first respondent lent and advanced credit facilities to Mohan Motor Distributors Pvt. Ltd. There is common share holding and directors between such entity and the first petitioner. The account of Mohan Motor Distributors Pvt. Ltd. with the first respondent became a non-performing asset (NPA). The first respondent found that, Mohan Motor Distributors Pvt. Ltd. deposited a sum of Rs. 15,15,000/- in the account of the first petitioner. According to him, such deposit is an attempt to siphon out funds of the NPA account to the first petitioner. The fact that, Mohan Motor Distributors Pvt. Ltd. and the first petitioners are sister concerns cannot be disputed. Apart from banker's lien, the first respondent exercised the right of tracing the money. The loan granted by the first respondent to Mohan Motor Distributors Pvt. Ltd. stood siphoned to the current account maintained by the first petitioner with the first respondent. Therefore, the action taken by the first respondent in blocking the current account of the first petitioner maintained with the first respondent cannot be questioned. Learned Senior Advocate appearing for the first and second respondents has questioned the maintainability of the writ petition relying upon Penguin Agro Products Pvt. Ltd. & Anr. (supra) and Federal Bank Limited (supra). He has relied upon 2019 SCC Online Cal page 282 (Star Battery Limited & Anr. v. State Bank of India & Ors.) and submitted that, provisions of Section 171 of the Contract Act, 1872 was gone into and the question of exercise of banker's lien was decided in the context of lifting or piercing of a corporate veil. In a given case, corporate veil can be lifted. He has submitted that, in the facts of the present case the writ petition should be dismissed.
(3.) The first petitioner claims itself to be a company within the meaning of the Companies Act, 2013. It maintains a current bank account with the first respondent. Such current account was blocked by the first respondent. The petitioners approached the first respondent about such blocking and ultimately was informed by the first respondent that, the blocking was due to overdue inventory funding in the accounts of Mohan Motors Group. The statement of the account of the current account of the first petitioner, maintained with the first respondent, shows a credit entry of a sum of Rs. 15,66,324.73 made by Mohan Motor Distributors Pvt. Ltd. The fact that, account of Mohan Motor Distributors Pvt. Ltd. maintained with the first respondent is a NPA is not disputed. The other fact that, Mohan Motor Distributors Pvt. Ltd. and the first petitioner are sister concerns with the two legal entities having common shareholders and directors are not disputed. Section 5(c) of the Banking Regulation Act, 1949 defines a banking company. Section 5(c) of the Act of 1949 is as follows:- "5.(c) "banking company" means any company which transacts the business of banking (in India);" Section 7 of the Act of 1949 prescribes the limitation on the user of the words Bank, Banker, Banking or Banking Company. It lays down the parameters when such words can be used. Section 148 of the Contract Act, 1872 defines bailment, bailor and bailee. Section 171 of the Act of 1872 lays down the right of lien of banker's, factors, wharfingers, attorneys and policy brokers. Sections 148 and 171 of the Act of 1872 are as follows:- "148. 'Bailment', 'bailor' and 'bailee' defined.--A 'bailment' is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the 'bailor'. The person to whom they are delivered is called the 'bailee'. 171. General lien of bankers, factors, wharfingers, attorneys and policy-brokers.--Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect." The first respondent is a banking company. It is governed by the Act of 1949 amongst others. Whether the fact that, the first respondent is governed by the Act of 1949 makes the first respondent amenable to a writ jurisdiction in respect of every activity that the first respondent undertakes, was discussed in Federal Bank Limited (supra). Federal Bank Limited (supra) has noticed that, there are a number of companies carrying on the profession of banking. It has held that, any business or commercial activity, may be banking, manufacturing units or related to any other kind of business generating resources, employment, production and resulting in circulation of money no doubt, are such which do have impact on the economy of the country in general. But such activities cannot be classified as one falling in the category of discharging duties, functions of public nature. It has held as follows:- "32. Merely because Reserve Bank of India lays the banking policy in the interest of the banking system or in the interest of monetary stability or sound economic growth having due regard to the interests of the depositors etc. as provided under Section 5(c)(a) of the Banking Regulation Act does not mean that the private companies carrying on the business or commercial activity of banking, discharge any public function or public duty. These are all regulatory measures applicable to those carrying on commercial activity in banking and these companies are to act according to these provisions failing which certain consequences follow as indicated in the Act itself. As to the provision regarding acquisition of a banking company by the Government, it may be pointed out that any private property can be acquired by the Government in public interest. It is now a judicially accepted norm that private interest has to give way to the public interest. If a private property is acquired in public interest it does not mean that the party whose property is acquired is performing or discharging any function or duty of public character though it would be so for acquiring authority. 33. For the discussion held above, in our view, a private company carrying on banking business as a scheduled bank, cannot be termed as an institution or a company carrying on any statutory or public duty. A private body or a person may be amenable to writ jurisdiction only where it may become necessary to compel such body or association to enforce any statutory obligations or such obligations of public nature casting positive obligation upon it. We don't find such conditions are fulfilled in respect of a private company carrying on a commercial activity of banking. Merely regulatory provisions to ensure such activity carried on by private bodies work within a discipline, do not confer any such status upon the company nor put any such obligation upon it which may be enforced through issue of a writ under Article 226 of the Constitution. Present is a case of disciplinary action being taken against its employee by the appellant Bank. The respondent's service with the bank stands terminated. The action of the Bank was challenged by the respondent by filing a writ petition under Article 226 of the Constitution of India. The respondent is not trying to enforce any statutory duty on the part of the Bank. That being the position, the appeal deserves to be allowed." Federal Bank Limited (supra) was applied and followed in Penguin Agro Products Pvt. Ltd. and Anr. (supra). In the facts of that case, an action of a private bank in freezing an account maintained by the writ petitioner was under challenge. In such context, the writ petition was found to be not maintainable applying the ratio laid down in Federal Bank Limited (supra). It has also noticed a Division Bench of this Hon'ble Court on the subject reported at 2007 Volume 4 Calcutta High Court Notes page 369 (Standard Chartered Bank v. Standard Chartered Bank Pensioner's Association and Ors.). It has held as follows :- "So far as the maintainability of the writ petition is concerned, Federal Bank Ltd. (AIR 2003 SC 4325) (supra) is of the view that, a company incorporated under the Companies Act, 1956 is not amenable to a writ jurisdiction simpliciter on the ground that it has to comply with guidelines issued under the Act of 1956. Similarly a banking company merely because, it has to follow the banking policy of the Reserve Bank of India or act in accordance with the regulations formulated under the Banking Regulation Act is not amenable to the writ jurisdiction. However, a banking company is amenable to the writ jurisdiction, if it is found that, it is discharging any public function or that it is necessary to compel such bank to enforce any statutory obligation or such obligations which are of public nature casting positive obligations upon it. Applying the ratio laid down in Federal Bank Ltd. (supra) the Division Bench of our Court in Standard Chartered Bank Pensioner's Association and Ors. (supra) found that, in the facts of that case that, the writ petition was not maintainable. It found that, the writ petitioner was wanting to enforce a contractual settlement. The remedy of filing a suit was found to be available to the petitioners therein." The facts scenario obtaining in the present case is similar to that of Penguin Agro Products Pvt. Ltd. and Anr. (supra). There also, an action of freezing of the bank account by a private banking company was under challenge as is here. In view of Federal Bank Limited (supra) and Penguin Agro Products Pvt. Ltd. and Anr. (supra), the present writ petition is held to be not maintainable. The transactions between the first petitioner and the first respondent are commercial in nature. Private rights, if any, stands affected by the decision of the first respondent in blocking or freezing the account of the first petitioner maintained with the first respondent, such an action cannot be called into question under Article 226 of the Constitution of India. Section 148 of the Contract Act, 1872 defines bailment, bailor and bailee. Section 171 of the Act of 1872 recognises the right of lien of a banker. ;