Bombay High Court Quashes State Minorities Commission's Notice To HDFC Bank On Complaint Of Jain Community Member Alleging Harassment

The Court stated that the complaint was an attempt to 'short-circuit' the procedure adopted the HDFC bank against its borrowers. It noted that a member cannot approach the Commission only on the pretext of being a minority, in order to circumvent lawful orders passed by a competent authority.

Background

HDFC Bank Ltd. (petitioner no. 1) along with other petitioners (its Managing Director and Chief Executive Officer, Group General Counsel, Head of Department of Special Operations and an employee), sought to quash the show-cause notice issued by Maharashtra State Minorities Commission (respondent no.2), asking them to attend the hearing of a complaint filed by Rajesh Mehta (respondent no.3).

In 2004, HDFC had got a Recovery Certificate for an amount of Rs.14.74 crores from Debts Recovery Tribunal against Mehta and other defendants. In July 2024, Mehta had filed a complaint with the Commission alleging severe harassment and mental torture caused to him and his late father by the Senior Management and Recovery Department of HDFC Bank. The complaint alleged that HDFC and former trustees of one Lilavati Kirtilal Mehta Medical Trust acted in collusion and caused severe harassment which was responsible for the demise of his father.

The complaint said that despite the auction of properties, HDFC instituted recovery proceedings against him and other defendants. It was further alleged that substantial deposits were made by the illegal trustees with HDFC Bank through the Trust in a clandestine manner, without obtaining mandatory approvals.

After receiving the complaint, the Minorities Commission issued a notice to the Managing Director and Chief Executive Officer of HDFC Bank, informing them about the schedule of hearing of the complaint.

Writ petitions against show-cause notice can be entertained if passed by authority without jurisdiction

A division bench of Justice Bharati Dangre and Justice Manjusha Deshpande observed that while a High Court should not normally entertain cases when a show-cause notice is challenged, when such notice is issued by an authority which lacks jurisdiction, the court can entertain the petition.

“True it is that normally a Writ Court would not exercise its jurisdiction when a show-cause notice is assailed before it, but when this show-cause notice is issued by a forum/an authority, which lacks jurisdiction or it is in violation of principles of natural justice, definitely the High Court shall entertain the Petition, as the former ground raised is a jurisdictional issue.”

Observed that if the authority lacks jurisdiction, it cannot even issue a notice, the Court stated“If an authority has no jurisdiction to entertain a complaint and despite this, merely stating that it has issued a notice, so that a response can be received and, thereafter, it will decide whether to proceed ahead or not, definitely cannot assume jurisdiction. Either the authority has jurisdiction to entertain the complaint/proceedings or it lacks the jurisdiction and if it lacks the jurisdiction, it cannot proceed ahead and even issue a notice.”

The Court referred to the case of Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai & Ors (1995), where the Supreme Court observed that a writ petition under Article 226 can be entertained despite alternative remedies being available if the authority against whom the writ is filed did not have any jurisdiction or had usurped jurisdiction without any legal foundation.

Minorities Commission has no jurisdiction to issue show-cause notice

With respect to the jurisdiction of the Minorities Commission to issue show-cause notice, the Court was of the view that the Commission did not have jurisdiction over the subject matter of the complaint.

The Court referred to Section 10 of the Maharashtra State Minorities Commission Act, 2004, which provides for the functions of the Commission. The Court noted that the Commission is empowered to make recommendations for effective implementation of safeguards available to minorities.

Mehta's counsel placed reliance on Section 10(1)(j), which empowers the Commission to look into specific complaints regarding deprivation of rights and safeguards of minorities and take up such matters with the appropriate authorities.

The Court however opined that the legislature may not have intended that Section 10(1)(j) could empower the Commission to look into individual complaints like the present case, which it noted is “nothing but an attempt to short-circuit the procedure adopted by HDFC Bank against its borrowers and to face an action as a debtor…”

The Court noted that neither Mehta nor any of the certificate debtors raised a challenge to the judgment where HDFC was successful in getting the Recovery Certificate against them. The Court thus said that this judgment has attained finality.

The Court noted that fifteen proceedings were filed by respondent No.3 and his family members before the Bombay City Civil Court, Bombay High Court and Supreme Court. It remarked “When Mr.Mehta was unable to taste success in either of the proceedings, to short-circuit the payment of the amount due under the Recovery Certificate and to avoid the arrest, the present complaint is filed before the Minorities Commission, constituted under Section 3 of the Act of 2004.”

The Court held that Mehta cannot knock the doors of the Commission on the pretext he is a member of Jain community. It noted that he cannot approach the Commission to circumvent a lawful order.

“On the pretext that since he is a member of Jain community, he cannot knock the doors of the Commission and get the orders passed in lawful manner, either set aside or circumvented and since this is not an option available to him and the Commission, definitely, has no power to set aside such orders, but what it is empowered to do is, to make recommendations to the competent authority. But, definitely if a liability is fastened upon him by an appropriate forum, he cannot take benefit of he being a member of minority community.”

The Court thus set-aside the notice issued by the Commission to the petitioners. It restrained the Commission from proceeding with the complaint by summoning the petitioners.

Case title: HDFC Bank Limited & Ors. vs. State of Maharashtra & Ors. (WRIT PETITION (L) NO.23881 OF 2024)