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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 :
1. While W.P. No.19596/2023 has been filed by the petitioner assailing the letter of the 1st respondent calling upon the petitioner to pay pre-closure charges and also direct the 1st respondent to return the deposit of Rs.25,00,000/- (Rupees Twenty Five Lakhs only) lying with the 1st respondent, W.P. No.32421 of 2023 has been filed by the petitioner to direct the 1st respondent to refund the sum of Rs.52,56,458/- which has been levied/debited towards various charges and penalties in respect of the account of the petitioner with the 1st respondent bank upon transfer of the loan account to Federal Bank.
Facts in W.P. No.19596/2023 :
2. The petitioner is a CRISIL-A rated company which had its banking with Canara Bank, Tirupur, since the year 2005 and it has an unblemi
Pre-payment penalties are impermissible for loans issued under the GECL Scheme which protects borrowers from arbitrary 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....
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