IDBI Bank is not a State under Article 12; Writ Petition against it is not maintainable.

The petitioner, an Assistant Manager at IDBI Bank, filed a writ petition under Article 226 of the Constitution of India challenging a disciplinary order dated April 3, 2024. The order imposed a major penalty of "reduction to a lower grade" from Manager (Grade 'B') to Assistant Manager (Grade 'A') following proceedings regarding irregularities in loan accounts at the Kishanganj Branch

The petitioner sought the setting aside of the penalty and the initiation of proceedings, restoration of his previous post/location, or alternatively, a direction to the Appellate Authority to dispose of his pending appeal

The respondent Bank raised a preliminary objection regarding the maintainability of the writ, asserting it is not a "State"

1. Whether IDBI Bank Ltd. qualifies as "State" or an instrumentality of the State under Article 12 of the Constitution of India, and consequently, whether a writ petition against it is maintainable under Article 226

Article 12 and Article 226 of the Constitution of India concerning the definition of "State" and the High Court's writ jurisdiction

Bombay High Court in All India IDBI Officers Association v. Union of India, which held that after 2018, IDBI is categorized as a "private sector bank"

"deep and pervasive control" test from Pradeep Kumar Biswas v. Indian Institute of Chemical Biology

principle from Federal Bank v. Sagar Thomas, which established that private banking business does not constitute a "public duty" for the purpose of writ maintainability

The Court examined the institutional status of IDBI Bank following the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003, noting that the Reserve Bank of India officially categorized it as a "Private Sector Bank" effective January 21, 2019

The Court observed that the Central Government does not exercise deep or pervasive administrative, functional, or financial control over the Bank; rather, its decisions are made by its Board of Directors similar to any private company

Using the tests outlined in K.K. Saksena v. International Commission on Irrigation Drainage, the Court reasoned that the Bank’s internal disciplinary actions and employment contracts do not partake in the nature of a public duty or statutory obligation

Following the consensus among the Bombay, Kerala, and Jharkhand High Courts, the Court determined that the Bank is not an instrumentality of the State

The petition was dismissed. However, the Court granted the petitioner liberty to approach the appropriate forum (such as a civil court or the internal Appellate Authority) to seek redressal for his grievances