ORDER :

The petitioner herein seeks a writ of Mandamus declaring the action of the respondent No.1 Bank in demanding prepayment charges of Rs.52,47,315/-towards Term Loan Account No.18090600003130, vide letter, dated 08.04.2021, for release of mortgaged property as illegal, arbitrary, violative of RBI Circulars, dated 07.05.2014 and 02.08.2019, and consequently direct the respondent No.1 Bank to repay the same with interest @ 14% per annum to the petitioner.

2. Heard Sri N.Vijay, learned counsel for the petitioner, Sri Srinivas Chitturu, learned counsel for respondent Nos.1 and 2 and perused the record.

3. Learned counsel for the petitioner vehemently contended that demanding prepayment charges for closure of term loan and return of documents to the petitioner is illegal and arbitrary. As per the RBI Circulars, dated 07.05.2014 and 02.08.2019, none of the scheduled commercial banks shall charge foreclosure charges/prepayment penalties on any ‘floating rate term loan’ sanctioned for the purpose other than business, to individual borrowers, with or without co-obligant(s). The petitioner is an ‘individual borrower’ and the loan sanctioned to him is ‘floating rate term loan’ and not a bus