1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 15.12.2011 CORAM THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN W.P(MD)No.13892 of 2011 and M.P(MD)Nos.1 and 2 of 2011 M/s.Irwin Leathers represented by its Managing Partner, No.14/42, Kattur Sadaiyappan Street, Paramet Ist Floor, Chennai – 600 003. .. Petitioner Vs. The Manager, Tamil Nadu Mercantile Bank, Dindigul Branch, No.9, Salai Road, Dindigul. .. Respondent Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus calling for the records relating to the impugned order passed by the respondent in his proceedings Nil dated 20.10.2011 in respect of recovery of exchange rate difference between the contract rate and the market rate on the date of cancellation and quash the same as illegal and consequently forbearing the respondent from recovering any amount from the petitioner towards exchange rate difference between the contract rate and the market rate on the date of cancellation and consequently directing the respondent to reimburse the amount deducted already as difference amount and pass such further or other orders. For Petitioner : Mr.B.Saravanan For Respondent : Mr.Pala Ramasamy ORDER The petitioner has come up with the above writ petition challenging the order issued by the respondent on 20.10.2011, informing the petitioner that the forward contract entered into between them was cancelled and also deducting the account of the petitioner with a particular amount of money. 2. Heard Mr.B.Saravanan, learned counsel for the petitioner. Mr.Pala Ramasamy, learned counsel takes notice for the respondent. 3. At the outset, the respondent is only a scheduled bank. Therefore it is not a state or instrumentality of state under Article 12 of the Constitution of India. As against scheduled banks, a writ may not lie, unless an element of public duty is shown. Alternatively, any violation of the directives issued by the Reserve Bank of India under Section 21 or 35 (A) of the Banking Regulation Act, 1949 has to be established. https://hcservices.ecourts.gov.in/hcservices/ 2 4. In the case on hand, the legal submission made by the petitioner is that Rule 7 of the Rules issued by FEDAI has been violated by the respondent bank. But FEDAI, known as Foreign Exchange Dealers' Association of India, is a company incorporated under Section 25 of the Companies Act, 1956. It is a self regulatory body in terms of the regulations issued by the Securities and Exchange Board of India (Self Regulatory Organizations) Regulations, 2004. 5. It is no doubt true that the members of FEDAI are obliged to honour the Rules issued by FEDAI. But their obligation to comply with the Rules issued by FEDAI arises out of a contract, in the nature of their subscription to the memorandum and articles of the company. 6. It is needless to point out that memorandum and articles of association of a company incorporated under the Companies Act, 1956, constitute a contract inter se between the shareholders. Therefore the obligation of the respondent bank to comply with the FEDAI Rules is purely contractual in nature. 7. The rules issued by FEDAI have no statutory force as the rules issued by Reserve Bank of India have. The relationship between the petitioner and the respondent, which has lead to the impugned order, is also only contractual in nature which does not involve an element of public duty or violation of the statutory directives or rules. 8. Therefore the writ petition is not maintainable and is dismissed. It is open to the petitioner to work out his remedies either before a civil Court or before SEBI. Consequently, connected Miscellaneous Petitions are dismissed. Sd/- ASSISTANT REGISTRAR(CO) /TRUE COPY/ SUB ASSISTANT REGISTRAR smn To The Manager, Tamil Nadu Mercantile Bank, Dindigul Branch, No.9, Salai Road, Dindigul. 1cc To Mr.Palaramasamy, Advocate SR No.44246 1cc To M/s.B.SaRAVANAN,Advocate SR No.43904 SB 30/12/2011 2P 4C W.P(MD)No.13892 of 2011 and M.P(MD)Nos.1 and 2 of 2011 https://hcservices.ecourts.gov.in/hcservices/