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IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
PUSHPENDRA SINGH BHATI, SANJEET PUROHIT
Amarbhaw Power Private Limited – Appellant
Versus
Punjab National Bank Limited – Respondent
JUDGMENT :
SANJEET PUROHIT, J.
FACTUAL BACKGROUND
1. The present Civil Misc. Appeal is preferred against the judgment and decree dated 10.05.2023 passed by the learned Commercial Court No.2, Jodhpur, in Civil Original Suit no. 64/2021 (NCV No. 74/2020), whereby the suit so filed by the appellant-plaintiff for recovery of sum of Rs. 5,52,000/-, being the amount recovered by the respondent Bank towards prepayment charges, came to be dismissed.
2. The suit has been preferred with following facts:-
2.1 It is mentioned in the plaint that the appellant, for the purpose of expansion of its business activities, approached the respondent bank, seeking credit facilities. Upon due consideration, the respondent Bank issued a sanction/acceptance letter dated 22.12.2015 allowing following credit facilities in favour of the appellant-plaintiff:
(i) Fund Based Working Capital Limit – Rs.50,00,000/- (enhanced to Rs.62,50,000/-).
(ii) Term Loan – Rs.2,76,00,000/- for establishment of a new turbine mill.
2.2. The sanction letter contained detailed terms and conditions, including stipulation that pre-payment charges at the rate of 2% would be levied on the limit/outstanding amount, whichever was higher, in th
The court ruled that contractual obligations regarding pre-payment charges are enforceable, and cannot be overridden by the Code designed for MSMEs.
Point of law: It would thus be seen that there are no disputed questions of fact requiring trial or otherwise a need to relegate the parties to the suit. It may also be mentioned that in the present ....
The central legal point established in the judgment is the entitlement of an individual borrower to repayment of prepayment charges as per RBI Circulars, and the estoppel of the bank from demanding s....
Pre-payment penalties on loans under the GECL Scheme are impermissible as per its operational guidelines, which explicitly prohibit such charges.
Pre-payment penalties are impermissible for loans issued under the GECL Scheme which protects borrowers from arbitrary charges.
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 14....
The central legal point established in the judgment is the requirement for transparency in the grant of credit facilities as per the guidelines issued by the Reserve Bank of India, and the consequenc....
Foreclosure charges can be imposed on business loans as they fall outside the RBI's prohibitive circulars for home loans; acceptance of contract terms binds the debtor.
The court ruled that foreclosure charges on business loans are valid and borrowers are bound by the terms of the sanction letter, regardless of any claim of protest during payment.
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