Kota Konda Pitchaiah vs. The Union Of INDIA

Facts

The petitioner, Kota Kond Pitchaiah, filed a writ petition against ICICI Bank (Respondent No. 2) and the Union of India (Respondent No. 1). The petitioner had a referral agreement with ICICI Bank dated February 21, 2014, entitling him to a 0.50% commission on loans procured. The petitioner claims the bank failed to pay commission on completed projects, citing a mismatch in his PAN card. He later submitted relevant documents, including Form 16, and obtained a GST number in 2017. The bank subsequently issued a discontinuation letter for the referral agreement without prior notice or calling for an explanation. The petitioner replied to a show cause notice on January 29, 2025. The writ petition seeks to declare the bank's actions arbitrary and illegal, and to direct the bank to allow the continuation of the referral agreement and pay the commission.

Held

The Court, without going into the merits of the case, disposed of the writ petition. It directed the respondent authorities to act upon the petitioner's reply dated January 29, 2025, and pass appropriate orders strictly in accordance with law, as expeditiously as possible, preferably within three weeks from the date of receipt of a copy of the order. The Court also mandated that all concerned parties be put on notice and given a fair opportunity of hearing, and that the decision be communicated to the petitioner. The ratio decidendi is that administrative actions impacting individuals must adhere to principles of natural justice, and when a reply is submitted to a show cause notice, the authorities are obligated to consider it and pass a reasoned order after providing a hearing. The operative direction is to consider the petitioner's reply and pass an order within a specified timeframe.

Key Issues

1. Whether the action of Respondent No. 2 Bank in discontinuing the referral agreement dated 21.02.2014 without prior notice or calling for an explanation is arbitrary and illegal, violating the principles of natural justice? 2. Whether the Petitioner is entitled to the commission amount on business procured through him, and if so, whether the Respondent No. 2 Bank should be directed to pay the same? Petitioner's Arguments: The petitioner, appearing party-in-person, argued that the discontinuation of the referral agreement was arbitrary and illegal, as it was done without any prior information or opportunity to explain. He also highlighted that he had replied to the show cause notice on January 29, 2025, and sought a direction for the authorities to act on his reply within a time-bound period. He relied on the principles of natural justice. Revenue/State's Arguments: The judgment does not record any specific arguments made by Respondent No. 1 (Union of India) or Respondent No. 2 (ICICI Bank) on the merits of the case. The court disposed of the petition based on submissions made by the parties.