Private banks, NBFCs not subject to writ jurisdiction: SC

The ruling came while affirming that Muthoot Finance, an NBFC, is not amenable to writ jurisdiction

- Utkarsh Anand

NEW DELHI: The Supreme Court has ruled that a private company engaged in the banking business as a scheduled bank, or a non-banking financial company (NBFC) cannot be subjected to the writ jurisdiction of a constitutional court because it does not perform public functions or duties.

A bench comprising justices JB Pardiwala and R Mahadevan noted that legal remedies in constitutional courts such as the high courts and Supreme Court are typically not available against private banks and NBFCs unless they discharge public functions akin to governmental duties. The ruling came while affirming that Muthoot Finance Ltd, an NBFC, is not amenable to writ jurisdiction.

The bench underscored that the most crucial factor in determining whether an entity falls under writ jurisdiction is the "function" test, meaning that a writ petition is only maintainable if the entity performs public duties or functions of public importance.