The main legal point established in the judgment is that the petitioners availed the loan as partners of the partnership firm and not as individual borrowers, and therefore, the notification dated 14th July, 2014 is not applicable to them. The court also emphasized that the petitioners paid the pre-payment charges voluntarily and are not entitled to a refund.

JUDGMENT :

Heard learned advocate Mr. Ashok L. Shah with learned advocate Mr. A.B. Munshi for the petitioners, learned Senior Advocate Mr. R.S. Sanjanwala with learned advocate Mr. Bomi H. Sethna for the respondent No.1 and learned advocate Mr. Amar Bhatt for the respondent No.2.

1. Rule, returnable forthwith. Learned advocates for the respondents waive service of notice of rule.

2. By this petition under Article 226 of the Constitution of India, the petitioners have prayed to direct the respondent No.1 to refund an amount of Rs.1,12,55,885/- which was charged by the respondent No.1 towards pre-payment charges with interest at the rate of 2% per annum as per the guidelines dated 14.07.2014 issued by the respondent No.2-Reserve Bank of India.

3. The facts in brief which give rise to this petition are as under:

3.1. The petitioners were the partners in M/s. Sai Enterprise and they jointly applied to the respondent No.1-a Non-Banking Financial Company (NBFC) to avail loan against property amounting to Rs.58,75,00,000/- at the floating rate of 12.5% per annum linked to Indusind Bank base rate on 30th March, 2012. The period of loan was 96 months which was revised to 180 months later on.

3.2. It is the case of the petitioners that since the petitioners were getting a loan at a lower rate of interest from another Bank, the petitioners informed the respondent No.1 for pre-closure of their account and further requested the respondent No.1 to intimate the petitioners the amount that the petitioners would be required to pay up to pre-close the aforesaid loan account.

3.3. The respondent No.1 by letter dated 01.04.2015 informed the petitioners to pay the amount of Rs.51,60,89,236/- towards pre-closure outstanding including the pre-payment charges of Rs.1,12,55,885/- (inclusive of service tax).

3.4. The petitioners paid the amount of Rs.51,60,89,236/- including the pre-payment charges on 27.03.2015 and 01.04.2015 whereby each of the petitioners had to pay Rs.25,80,44,618/- as per their one-half share.

3.5. The respondent No.1 issued No Dues Certificate dated 20th April 2015 to the petitioners.

3.6. It is the case of the petitioners that the respondent No.2 issued Guidelines dated July 14, 2014 relating to “Levy of foreclosure charges/pre-payment penalty on Floating Rate Loans” addressed to all NBFCs informing that the NBFCs shall not charge foreclosure charges/prepayment penalties on all floating rate term loans sanctioned to individual borrowers with immediate effect.

3.7. The petitioners therefore on coming to know about the Guidelines of 2014, by letter dated 24.07.2015 addressed to the respondent No.1, requested to refund the pre-payment charges of 1,12,55,885/- paid by the petitioners with interest at the rate of 12% per annum. It is the case of the petitioners that as the petitioners availed loans with floating rate of interest from the respondent No.1-NBFC in individual capacity and as per the Guidelines of 2014 issued by the respondent No.2-RBI, no pre-payment charges could have been recovered from the petitioners by the respondent No.1.

3.8. The respondent No.1 by letter dated 03.09.2015 rejected the demand made by the petitioners to refund the amount of Rs.1,12,55,885/- charged by it as pre-payment charges on the ground that the loan was advanced to the partnership firm and not the individuals.

3.9. The petitioners thereafter filed a complaint before respondent No.2-Reserve Bank of India(RBI) which was received by the respondent No.2 as acknowledged vide letter dated 16.09.2015.

3.10. The respondent No.2-RBI vide letter dated 16.10.2015 informed the petitioners that as per the inquiry made by it from the respondent No.1 and as informed by the respondent No.1, loan was given to the partnership of the petitioners and therefore, the respondent No.1 has charged the pre-payment charges as per the sanction letter.

3.11. Being aggrieved by the rejection of the demand made by the petitioners to refund the prepayment charges of Rs.1,12,55,885/- by the