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Dismissing a Special Leave Petition filed by Canara Bank, Supreme Court on Tuesday said that instead of running after those who have petty loans of a few thousand rupees, public sector banks should focus their energy on recovering loans from “big fish” and “big corporate debtors.”

The Bench comprising Justices D. Y. Chandrachud, MR Shah and Hima Kohli told the appellant, Canara bank, that if the bank is really concerned about the rising Non-Performing Assets (NPAs) of the public sector banks, it should first concentrate on big corporate debtors.

The Bench was hearing the appeal filed by Canara Bank against a judgment of the Madras high court in March this year. Declining to entertain the SLP under Article 136 of the Constitution of India, the Bench upheld the high court order.

Earlier, the bank had made an attempt to hold a social service society from Tamil Nadu, liable for repaying an amount of ₹48.8 lakh, which was given to 1540 individuals as loans in 1994-95.

The Madras High Court had held that Canara Bank cannot recover its outstanding loan from the fixed deposit of the Tiruchirapalli Multipurpose Social Service Society since there was no formal contract or express agreement of recovery from the society in case of failure by the borrowers to repay the loans.

On Tuesday, it was argued before the Apex Court that the Social Service Society gave letters of guarantee that they will assure repayment of loans from the borrowers and that it was only on this assurance, the amounts were released by the Canara Bank.

However, the Bench noted that the loan was given by the bank under the DIR scheme to financially assist low-income groups.

Bench asked the Counsel representing the Bank why the bank was going after the society whereas the amount given to society was for marginalised sections of the society, people who are small farmers, poulters, dairymen or tradesmen, and artisans.

Some of them cannot even pay ₹10 for their photos on these forms, the Bench remarked.

Court also said that Giving loans to certain sections of society is also a social function, not only an economic function. Court added that Bank should bear a moral responsibility.

Therefore, saying that “the Constitution has entrusted us with this Brahmastra only to make sure we use this only in suitable cases, and this is not the one,” Bench rejected the Bank’s appeal.

(Case Title: Canara Bank vs. Tiruchirapalli Multipurpose Social Service Society)