Jammu & Kashmir High Court
Krishan Singh vs Jammu & Kashmir Bank Ltd on 14 August, 2025
Author: Sanjay Dhar
Bench: Sanjay Dhar
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HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Reserved on: 06.08.2025
Pronounced on: 14.08.2025
Case No.:- WP(C) No. 2794/2021
CM No. 9421/2021
Krishan Singh, age 61 years
S/o Sh. Basant Singh
R/o Village Pangali,
Tehsil Nagrota,
District Jammu
.....Petitioner(s)
Through: Mr. C.M. Koul, Sr. Advocate with
Mr. A.R. Bhat, Advocate
Vs
1. Jammu & Kashmir Bank Ltd.
Through its Chairman,
Corporate Office,
Jammu/Srinagar
2. Secretary J&K Bank Ltd.,
Corporate Office,
Jammu/Srinagar
3. Branch Manager,
Jammu and Kashmir Bank,
Branch Jagti Township,
Nagrota, Jammu
4. Ram Pal
S/o Late. Bansi Lal
R/o Pangali, Nagrota,
Jammu
..... Respondent(s)
Through: Mr. Sidhant Gupta, Advocate
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2 WP(C) No. 2794/2021
Coram: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE
JUDGEMENT
1. The petitioner, through the medium of the present petition,
has sought a mandamus upon the respondents to refund an
amount of Rs. 46,000/- into his account maintained with
J&K Bank, Branch Jagti, Township, Nagrota Jammu
(hereinafter to be referred to as the respondent-Bank).
2. As per the case of the petitioner, he had stood as guarantor
for repayment of loan of Rs. 70,000/- availed by respondent
No. 4 from the respondent-Bank pursuant whereto, the
amount of loan was released in favour of the respondent No.
4. However, the said respondent, it seems, did not repay the
loan amount in full to the respondent-Bank.
3. It has been submitted that respondent-Bank, without any
authority and without adopting procedure established by law,
deducted an amount of Rs. 46,000/- from the bank account of
the petitioner in order to liquidate the unpaid loan of
respondent No. 4. It has further been submitted that the
respondent-Bank did not even inform the petitioner about
their aforesaid action. The petitioner is stated to have served a
legal notice upon the respondent-Bank, which was responded
to by the said Bank vide its communication dated 14.09.2021.
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4. It has been contended that the respondent-Bank could not
have deducted an amount of Rs. 46,000/- from the bank
account of the petitioner in the absence of any judgment of the
Court or any permission/authority of the petitioner or
instructions from Reserve Bank of India or from any other
regulatory body.
5. The respondent-Bank has contested the writ petition by filing
its reply in which it has been submitted that respondent no. 4
had approached it for grant of KCC loan facility to the tune of
Rs. 70,000/- to meet short term credit requirements for
cultivation of crops and for providing working capital for
maintenance of farm assets and activities allied to agriculture.
6. The petitioner is stated to have stood as a guarantor against
the aforesaid loan and executed a „Letter of Guarantee‟ dated
06.05.2017. It has been submitted that in terms of the said
„Letter of Guarantee‟ respondent-Bank was given a right of
general lien over all securities as also the right of set-
off/appropriation of any money belonging to the petitioner in
hands of the respondent-Bank for adjustment of the
borrowers‟ loan.
7. It has been further submitted that respondent No. 1 defaulted
in repaying the loan amount despite availing opportunities in
this regard and ultimately, an amount of Rs. 46,000/- was
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4 WP(C) No. 2794/2021
found outstanding against respondent No. 4. The same was
deducted from the bank account of the petitioner
8. It has been submitted that in terms of „Letter of Guarantee‟
and in the light of the provisions contained in section 128 of
the Indian Contract Act, the liability of petitioner is co-
extensive with the liability of respondent No. 4. The
respondent-Bank has further submitted that the present writ
petition is not maintainable.
9. I have heard learned counsel for the parties and perused the
record of the case.
10. As is clear from the pleadings of the parties, the petitioner has
challenged the action of respondent-Bank in deducting
outstanding loan amount of Rs. 46,000/- from his bank
account. It is not in dispute that the petitioner has stood as
guarantor in respect of the loan advanced by the respondent-
Bank to respondent No. 4. It is also not in dispute that
respondent No. 4 had defaulted in repayment of the loan
amount and there was an outstanding of Rs. 46,000/- against
him.
11. The respondent-Bank claims that in terms of the covenants of
the „Letter of Guarantee‟ and „Letter of Authorization‟
executed by the petitioner in favour of the respondent-Bank,
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the impugned action of the respondent-Bank in deducting the
outstanding loan amount from the bank account of the
petitioner has been taken strictly in accordance with the terms
of the contract of guarantee. The petitioner, on the other
hand, claims that respondent-Bank could not have taken such
action without first proceeding against the principal borrower
and without getting the outstanding amount adjudicated from
a civil court.
12. Learned counsel for the respondent-Bank has raised a
preliminary objection with regard to maintainability of the writ
petition by contending that the dispute between the parties
falls within the realm of contractual obligations as such, a writ
petition for enforcing or challenging such contractual
obligations is not maintainable.
13. In the above context, it is to be noted that in terms of the
„Letter of Guarantee‟ and „Letter of Authorization‟
executed by the petitioner in favour of the respondent-Bank, a
right has been given to the said Bank to deduct monthly
installment from his bank account if the borrower fails to
deposit the monthly installments and it is also provided that
the Bank shall have right of general lien over all securities of
the petitioner and further the bank has been given right to set-
off/appropriation of his money in the hands of the Bank
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towards adjustment of borrower‟s loan account. Therefore,
there can be no dispute to the fact that issue involved in the
present case falls within the realm of contract of guarantee
executed by the petitioner in favour of the respondent-Bank.
14. The question as to whether a writ petition would be
maintainable in a case where a litigant is seeking
enforcement/challenge to the contractual obligations against
an “authority” within the meaning of Article 12 of the
Constitution of India came up for consideration before the
Supreme Court of India in the case of “K.K. Saksena Vs.
International Commission on Irrigation and Drainage and
ors” reported as (2015) 4 SCC 670. Paras 43 and 44 of the
said judgment are relevant to the context and the same are
reproduced as under:
“43. What follows from a minute and careful reading
of the aforesaid judgments of this Court is that if a
person or authority is a „State‟ within the meaning of
Article 12 of the Constitution, admittedly a writ
petition under Article 226 would lie against such a
person or body. However, we may add that even in
such cases writ would not lie to enforce private law
rights. There are catena of judgments on this aspect
and it is not necessary to refer to those judgments as
that is the basic principle of judicial review of an
action under the administrative law. Reason is
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obvious. Private law is that part of a legal system
which is a part of Common Law that involves
relationships between individuals, such as law of
contract or torts. Therefore, even if writ petition
would be maintainable against an authority, which is
„State‟ under Article 12 of the Constitution, before
issuing any writ, particularly writ of mandamus, the
Court has to satisfy that action of such an authority,
which is challenged, is in the domain of public law as
distinguished from private law.
44. Within a couple of years of the framing of the
Constitution, this Court remarked in Election
Commission of India v. Saka Venkata Subba Rao, AIR
1953 SC 210 that administrative law in India has
been shaped in the English mould. Power to issue
writ or any order of direction for „any other purpose‟
has been held to be included in Article 226 of the
Constitution „with a view apparently to place all the
High Courts in this country in somewhat the same
position as the Court of the King‟s Bench in England.
It is for this reason ordinary „private law remedies‟
are not enforceable through extraordinary writ
jurisdiction, even though brought against public
authorities (See – Administrative Law; 8th Edition;
H.W.R. Wade & C.F. Forsyth, page 656). In a number
of decisions, this Court ha held that contractual and
commercial obligations are enforceable only by
ordinary action and not by judicial review.”
15. From the above, it is clear that even if an authority falls within
the definition of „State‟ as contained in Article 12 of the
Constitution of India, writ would not lie to enforce private
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rights. Thus, a writ petition for enforcing contractual
obligations or for challenging contractual obligations being in
the realm of private law would not be maintainable against an
authority, even if it falls within the definition of „State‟ under
Article 12 of the Constitution of India.
16. The Supreme Court of India in the case of „State of Gujrat &
Ors Vs. Meghji Pethraj Shah Charitable Trust and Ors‟
reported as (1994) 3 SCC 552 has held that a writ petition is
not maintainable in a contractual matter and a relief under
Article 226 of the Constitution of India is not available in the
case of contracts which are not statutory in nature.
17. Again in the case of „Kerala State Electrcity Board and Anr
Vs. Kurien E. Kalathil and Ors‟ reported as (2000) 6 SCC
293, the Supreme Court of India has held that a dispute
arising out of terms of contract entered into by a statutory
body would also have to be settled by the ordinary principles of
contract law. It further held that the mere fact that one of the
parties to such a contract is a statutory body will not, by itself,
operate so as to exclude the ordinary principles of contract
law.
18. In view of the foregoing position of law, even if respondent-
Bank can be termed as „State‟ within the meaning of Article
12 of the Constitution of India, this Court would not be in a
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position to exercise its extraordinary writ jurisdiction to issue
a mandamus against the respondent-Bank for enforcement of
the contractual obligations or to determine challenge to such
obligations, particularly when the contract between the
petitioner and the respondent-Bank is not a statutory
contract.
19. In the present case, the dispute between the petitioner and the
respondent-Bank is purely of a contractual nature and their
rights and liabilities are governed by the terms of the „Letter
of Guarantee‟. The same has to be determined by taking
resort to ordinary civil law and not by invoking the writ
jurisdiction of this Court.
20. Even if it is assumed that the present writ petition is
maintainable still then the petitioner does not have a case in
his favour because as per terms of the „Letter of Guarantee‟
and the „Letter of Authorization‟ authenticity whereof is not
being disputed by the petitioner, the respondent-Bank was
well within its right to deduct and set-off the outstanding loan
amount of the principal borrower out of the money which was
with the respondent-Bank. In terms of Section 128 of the
Contract Act, liability of a guarantor is co-extensive with that
of the principal borrower, therefore, even if the respondent-
Bank may not have proceeded against the principal borrower,
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it is open to it to recover the outstanding loan amount from the
security of the petitioner.
21. For the foregoing reasons, I do not find any merit in the
present petition. The same is accordingly dismissed.
(SANJAY DHAR)
JUDGE
JAMMU
14.08.2025
Naresh/Secy.
Whether order is speaking: Yes
Whether order is reportable: Yes