LexCOMMON CAUSE (A REGD. SOCIETY) versus UNION OF INDIA & ANR.
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A B [2010] 10 S.C.R. 124 COMMON CAUSE (A REGO. SOCIETY) v. UNION OF INDIA & ANR. (Writ Petition (C) No. 291 of 1998) AUGUST 18, 2010 [J. M. PANCHAL AND A.K. PATNAIK, JJ.] Public Interest Litigation: c Banks - Non-recovery of loans, known as Non- Performing Assets - Writ petition filed before Supreme Court for appropriate·. writs/directions, as legislative and administrative measures taken stated not to have been effective - HELD: whether legislative and administrative 0 measures taken by the Union Government have been effective or not is not for the Court but for the Union Government and Parliament to consider, beca1.1se reduction and control of NPAs is not within the domain of judiciary but within the domain of the Executive and Legislature - It is E reiterated that in the field of economic activities, there has to be judicial deference to Legislative and Executive judgment, and decisions on complex economic matters are to be based on experimentation or what one may call 'trial and error method' - It is for Parliament to debate and decide on the policy decision and not for courts to sit in judgment whether F a particular policy decision of Government is effective or not - An expert body known as Serious Fraud Investigation Office (SFIO} set up by the Union Government is already in existence - In order to make the SFIO effective, a Committee of Experts under the chairmanship of Ex-Deputy Governor of G Reserve Bank of India has also been set up, which will suggest effective measures, legislative or administrative, to ensure that bank frauds are prevented in future and the NPAs are kept to the minimum - This Committee will consider the H 124 COMMON CAUSE (A REGO. SOCIETY) v. UNION OF 125 INDIA & ANR. suggestion to make the SFIO (or any similar body) a statutory A authority having sufficient powers and having the required autonomy to be able to effectively deal with the problems of bank frauds and NPAs - A copy of this order will be placed before the Committee of Experts - Constitution of India, 1950 - Article 32 - Banks/Banking. B Vil/ianur lyarkaai Padukapu Maiyam vs. Union of India and Ors. 2009 (9) SCR 225 = (2009) 7 sec 561; and State of M.P. vs. Nandlal Jaiswal 1987 (1) SCR 1 = 1986 (4) sec 566 - relied on. · Vishaka and Ors. Vs. State of Rajasthan and Ors. 1997 (3) Suppl. SCR 404 = 1997 (6) SCC 241; and Vineet Narain & Ors. Vs. U.0.1. 1997 (6) Suppl. SCR 595 = 1998 (1) sec 226 - distinguished. Case Law Reference: 1997 (3) Suppl. S.CR 404 distinguished 1997 (6) Suppl. SCR 595 distinguished 1987 (1) SCR 1 2009 (9) SCR 225 relied on relied on para 6 para 6 para 9 para 9 CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 291 of 1998. Prashant Bhushan, Rohit Kumar Singh, Poulami Putatunda for the Petitioner. c D E F Gopal Subramanium, S~ G., S.N. Terdal, Sunita Sharma, Aman Ahluwalia, Kuldeep S. Parihar, H.S. Parihar, Anil Katiyar, G P.P. Singh, Romy Chacko for the Respondents. The order of the Court was delivered by H 126 SUPREME COURT REPORTS [2010] 10 S.C.R. A ORDER A.K. PATNAIK, J. 1. The petitioner is a society duly registered under the Societies Registration Act, 1860 and is engaged in taking up various common problems of the people 8 for redressal. Concerned with the increase of the non~recovered • loans advanced by the public and private sector banks in India which have come to be known as Non-Performing Assets (for short "NPAs"), the petitioner has filed this Writ Petition under Article 32 of the Constitution as a Public Interest Litigation C praying for appropriate writs and directions. 2. The petitioner has stated in the Writ Petition that the aggregate figure of NPAs worked out on the basis of data compiled by the Banking Division of the Ministry of Finance is Rs.43,577/- crores. According to the petitioner, non-recovery D of such huge amount of NPAs has resulted in substantial funds of banks not being available for development of the country's economy and this, in turn, has affected the citizens. The petitioner has alleged that the steps taken by the Union. Government to recover the NPAs have not yielded positive E results and the Finance Ministry of the Union Government is reported to have admitted that 27 nationalised banks had written off a staggering amount of Rs.4,010/- crores as bad debts during 1994-95 and 1995-96. According to the petitioner, -,most of the bad debts are on account of defaults
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