Back
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M.DHANDAPANI
Royal Classic Mills Pvt. Ltd. – Appellant
Versus
Canara Bank, Mid-Corporate Branch, Tirupur – Respondent
| Table of Content |
|---|
| 1. petitioner highlights illegality of pre-payment penalties on gecl loans. (Para 2 , 3 , 8) |
| 2. legal grounds presented contesting application of penalties based on loan type. (Para 10 , 25 , 30) |
| 3. court held gecl loans exempt from pre-payment penalties under applicable guidelines. (Para 33 , 35 , 39) |
| 4. approval of debt recovery terms based on regulatory guidelines and agreement clauses. (Para 47 , 48) |
ORDER :
Facts in W.P. No.19596/2023 :
3. It is further averred that by January, 2023, all the dues payable to the 1st respondent amounting to Rs.50.72 Crores were paid in full and the mortgaged properties by way of collateral securities were requested to be returned along with the cancellation of Memorandum of Deposit of Title Deeds (for short ‘MODT’). At this point of time, the 1st respondent called upon the petitioner to pay 2% as penal charges on the outstanding amount for pre-closing the GECL loans availed by it. It is further averred that GECL loan was granted to eligible borrowers, on account of COVID-19 and the entire scheme is drawn by the 2nd respondent, who guaranteed the loan that is offered by its Member Lending Institutions (for short ‘MLI’) to eligible custo
Pre-payment penalties are impermissible for loans issued under the GECL Scheme which protects borrowers from arbitrary charges.
Pre-payment penalties on loans under the GECL Scheme are impermissible as per its operational guidelines, which explicitly prohibit such charges.
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....
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 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....
The court established that a taxpayer who has paid the principal tax is entitled to a waiver of interest and penalty under the Amnesty Scheme, regardless of subsequent demands for penalty.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
