The main legal point established in the judgment is that the respondent bank was not entitled to charge foreclosure charges/prepayment penalties on the term loan sanctioned to the petitioner, a sole proprietorship firm, as per the circular dated May 7, 2014.

Debangsu Basak, J.

The petitioners have sought for a direction upon the bank to release collateral securities and issue a 'no due' certificate in favour of the petitioner without imposing any foreclosure/prepayment charges and/or penalties.

2. Learned Advocate appearing for the petitioner has submitted that, the petitioner as the sole proprietor is carrying on business under the name and style of Magnum Industries. The petitioner had obtained credit facilities from the respondent no. 1 in terms of the sanction letter dated January 15, 2016. The petitioner had foreclosed the credit facilities. Upon such foreclosure being sought to be made, the bank had unjustifiably claimed foreclosure charges. The industrial unit of the petitioner being classified as small scale by the State of Assam and the petitioner being an individual borrower under the relevant guidelines issued by the Reserve Bank of India, the respondent no. 1 is not entitled to levy any foreclosure charges. In support of such contention learned Advocate for the petitioner has relied upon a Circular dated May 7, 2014 issued by the Reserve Bank of India.

3. Learned Advocate for the petitioner, in his usual fairness has drawn the attention of the Court to (M/s. SPPL Hotels Pvt. Ltd. & Anr. v. Allahabad Bank & Ors., (2018) AIR Calcutta 185) and has submitted that, the decision of rejection of the writ petition therein assailing the imposition of prepayment charges on such petitioner prepaying the credit facilities, is not attracted in the facts of the present case. The terms and conditions of the sanctioned credit facilities obtaining in the present writ petitioner are different to that obtaining in M/s. SPPL Hotels Pvt. Ltd. (supra). Relying upon (Gangotri Enterprises Limited v. Union of India & Ors., (2016) 11 SCC 720) he has submitted that, the unadjudicated claim for damages, for breach of contract does not amount to money due until adjudicated and ordered by a Court. Therefore, the bank cannot act as the claimant, adjudicating authority as also the executing authority in respect of any claim that the bank may have on a borrower. He has drawn the attention of the Court to the subsisting interim order dated March 17, 2017 and has submitted that, if the Court is please to grant the relief as prayed for in prayer a of the writ petition, then, the bank should also be directed to refund the sum of Rs. 13.35 lakhs kept in deposit by the petitioner with the bank in terms of such interim order along with interest accruing on such deposit. He has submitted that, the petitioner be granted the reliefs as sought for.

4. Learned Advocate appearing for the respondent no. 1 has submitted that, the petitioner cannot be treated as an individual borrower within the meaning of the RBI guidelines. He has submitted that, the petitioner cannot be treated as a consumer as, the petitioner had obtained the credit facilities for business purposes. The credit facilities being granted for commercial purposes, the petitioner cannot be treated as a consumer. Moreover, the credit facilities were granted in the name of the proprietorship firm. More so, the petitioner cannot be treated as an individual borrower. In support of his contentions that, an individual who has entered into business transactions cannot be treated as a consumer, learned Advocate appearing for the bank has relied upon (Laxmi Engineering Works v. P.S.G. Industrial Institute, (1995) 3 SCC 583), an unreported judgment and order dated July 31, 2015 passed in C.O. No. 1757 of 2008 (M/s. Sanjeev Kumar & Brothers v. The Calcutta Tramways Company (1978) Ltd. & Anr.) and a decision of the National Consumer Disputes Redressal Commission, New Delhi rendered in Consumer Case No. 2121 of 2016 (Dr. Hemant & Anr. v. M/s. Zenal Construction Pvt. Ltd. & Anr.).

5. The petitioner is a natural person. The petitioner has claimed that, it carries on business under the name and style of Magnum Industries as the sole proprietor thereof. The petiti