In this case, the petitioner challenged a purely commercial contract executed between the parties and a nationalised bank.

A Division Bench of the Delhi High Court held:

“…earning of a profit in every commercial transaction into which they embark cannot be regarded as a solemn legal duty of banks. All that is expected is that all efforts should be made to ensure that the necessary checks, enquiries, and due diligence is observed in such cases. Once this is done, the transaction cannot be called into question, in a court, on the ground that it was not financially expedient, or that it resulted in a loss which might have been avoided, had another avenue been explored.”.

The Bench held that the requisite degree of financial prudence was exercised by the bank and “entertaining such petitions could throw the entire banking system into jeopardy, and disincentivise banks and financial institutions from entering into bona fide commercial transactions”.

Without meaning, in any manner, to doubt the bona fides of the present petitioner, the Bench further held that entertaining such litigation may lead to the possibility of blackmail, in the garb of public interest litigations. “Every such transaction would become vulnerable to be dragged into Court at the instance of persons who claimed to be public spirited citizens, with fragmentary information”.

The Delhi High Court held that the petition was merely in the nature of a shot in the dark, based on surmises, conjectures and assumptions, “a writ court cannot set aside a private contract executed between the parties” and the writ petition was dismissed in limine.