Judgment : This writ petition is to issue a writ of mandamus, directing respondents 1 to 4 to: (a) Refund a sum of Rs. 3.43 lakhs paid by way of pre-payment premium as well as Rs. 10.35 lakhs paid as processing fee with interest at 24% per annum compounded monthly from the date of default till the date of realisation; (b) Refund the excess amount claimed by levying 15% in service tax instead of 10.20% as prescribed by law then; (c) Respondents 1 to 4 may be directed to produce the guidelines followed by them for levy of prepayment penalty which has been calculated incorrectly; Fifth respondent may be directed to scrutinise the accuracy of the calculation of pre-payment premium; (d) Pay damages to the tune of Rs. 50 lakhs for causing irreparable business loss and damage to the petitioner which had unreasonably delayed their hotel project; (e) Pay legal costs of Rs. 50,000/- and also issue direction to the 5th respondent to initiate action for violating the terms and policy guidelines contained in the Fair Practices Code by the 1st to 4th respondents within a time frame fixed by this Court. 2. Petitioner-Company is a pioneer in hotel development business and has been operating Radha Park Inn at Chennai with financial assistance from State Bank of India. Since, the petitioner-Company desired to expand their business, to set up another hotel at Bangalore they wanted to obtain financial assistance. Even though, the petitioner had offers from various banks and financial institutions, the petitioner preferred to approach State Bank of India due to its prior relationship. An Application for loan was made to the respondents-State Bank of India on 11.10.2004 seeking for financial assistance as per the following terms: (a) Financial assistance of Rs. 977.00 lakhs for setting up a 3 star hotel at Bangalore. (b) Waiver of processing and appraisal fee in view of prior relationship with the bank. (c) FCNRB (Foreign Currency Non-Resident Borrowing) loan at 25% including LIBOR (London Inter Bank Offer Rate); and (d) Waiver of pre-payment penalty for both the Foreign Currency and the Indian Rupee Loan. Therefore, according to the petitioner, respondents 1 to 4-Bank was required to consider the loan on the said, specific terms. (c) FCNRB (Foreign Currency Non-Resident Borrowing) loan at 25% including LIBOR (London Inter Bank Offer Rate); and (d) Waiver of pre-payment penalty for both the Foreign Currency and the Indian Rupee Loan. Therefore, according to the petitioner, respondents 1 to 4-Bank was required to consider the loan on the said, specific terms. According to the petitioner, the Reserve Bank of India issued guidelines called “Fair Practices Code on Lenders Liability” in respect of financial assistance, which contemplate the processing of such loan Applications, collecting processing fees and the procedure therein. 3. According to the petitioner, the respondents 1 to 4-Bank without following the guideline has straightaway issued sanction, by its letter dated 22.12.2004, sanctioning lesser amount than claimed by the petitioner, without considering the other conditions, which was stipulated by the petitioner like waiver of processing and appraisal fee and waiver, of pre-payment penalty etc. As per the sanction letter dated 22.12.2004, the following terms were found: (a) Sanction was only for Rs. 9. crores as against the claim of Rs. 9.77 crores. (b) Upfront fee at 1% of term loan for processing the loan was demanded as against the petitioners request for total waiver. (c) FCNRB (Foreign Currency Non-Resident Borrowing) loan was offered at an interest rate of LIBOR (London Inter Bank Offer Rate) + 4.25%. (d) Pre-payment charge at 2% for the pre-paid amount against the petitioners request for total waiver. Since the said conditions were unworkable for the petitioner-Company, the petitioner informed the bank by its letter dated 27.5.2005 of their inability to accept the sanction. However, at the instance of the Bank and due to the existing cordial relationship and on specific assurance of the Assistant General Manager of State Bank of India, Ambattur, that the request for sanction will be considered by the Head Office, the petitioner has received the sanction letter and placed it before the Board of petitioner-Company. The Board of petitioner-Company has decided to accept the loan subject to certain “exceptions” as per the Resolution dated 3.1.2005. In the resolution, the conditions put by the State Bank of India have not been accepted and the said resolution has been received by the State Bank of India as acknowledged in the letter dated 21.7.2006. Therefore, according to the petitioner, the sanction of loan as per sanction setter dated 22.12.2004 was not accepted in entirety, especially relating to the levy of processing fee. 4. Therefore, according to the petitioner, the sanction of loan as per sanction setter dated 22.12.2004 was not accepted in entirety, especially relating to the levy of processing fee. 4. According to the petitioner, the petitioner-Company has never accepted the availing of loan as per the terms of the respondents 1 to 4-Bank. The petitioner also states that the Resolution of the petitioner-Company listing “exceptions” was forwarded to Mumbai Office. However, the State Bank of India claims that the petitioner in its letter dated 10.1.2005 has accepted the terms of sanction. The case of the petitioner is that, that letter cannot be deemed to be an acceptance, since, it is only the Board, which has to pass any Resolution. The non-acceptance of availing of loan had been conveyed again by letter dated 18.1.2005. According to the petitioner, there was no response from the respondents 1 to 4-Bank regarding the final order to be passed by the Head Office at Mumbai. However, the Assistant General Manager of the Local Branch Office of State Bank of India has informed orally that disbursement of loan had been sanctioned subject to the following conditions: (a) FCNRB (Foreign Currency Non-Resident Borrowing) loan will be at the rate of LIBOR (London Inter Bank Offer Rate) + 3.50%. (b) Processing fee will be levied at 0.5%. (c) Rupee loan will be at the interest rate of 8.75%. The revised rate was accepted by the Mumbai Office only in the month of March 2005 and according to the petitioner, such offer of the Mumbai Head Office has not been communicated to the petitioner at all and except the last communication viz., sanction letter dated 22.12.2004 as stated above, there is no other communication. Therefore, according to the petitioner, the conduct of respondents 1 to 4 is coercive in nature. The conduct of respondents 1 to 4-Bank is against the “Fair Practices Code” and the respondents 1 to 4-Bank have no right to withhold the securities. When the petitioner insisted the Bank to release the Title Deeds pledged as security with the respondents 1 to 4-Bank, the respondents 1 to 4-Bank insisted on pre-payment penalty of Rs. 4.47 lakhs for payment of loans as well as processing fee of Rs. 10.35 lakhs for the “un-accepted and un-availed loan” of Rs. 9.00 crores. When the petitioner insisted the Bank to release the Title Deeds pledged as security with the respondents 1 to 4-Bank, the respondents 1 to 4-Bank insisted on pre-payment penalty of Rs. 4.47 lakhs for payment of loans as well as processing fee of Rs. 10.35 lakhs for the “un-accepted and un-availed loan” of Rs. 9.00 crores. Since the respondents 1 to 4-Bank refused to release the Title Deeds, the petitioner was compelled to remit the said charge of Rs. 4.47 lakhs being the prepaid penalty for the first loan and Rs. 10.35 lakhs being the processing fee for the second loan proposal and the said amounts were paid under protest by way of a cheque dated 28.6.2005 in favour respondents 1 to 4-bank. 5. According to the petitioner, the coercive act of respondents 1 to 4-bank is against the “Fair Practices Code” and inasmuch as the petitioner has not even availed the second loan, there is no question of compelling the petitioner to pay the processing fee of Rs. 10.35 lakhs. The petitioner by two notices dated 28.6.2005 and 13.10.2005 have protested against the collection of Rs. 4.47 lakhs towards pre-payment charges of the first loan and a sum of Rs. 10.35 lakhs towards service charges for processing the second term loan and had requested the bank to furnish statement of account showing as to how the sum of Rs. 4.47 lakhs has been arrived at. It was only on 21.7.2006, State Bank of India has sent a statement showing the calculation of pre-payment premium for the amount claimed in May 2004. State Bank of India has admitted the mistake in the calculation and has agreed to refund Rs. 21,400/- and according to the petitioner, the entire calculation is wrong, and the petitioner is entitled for refund of Rs. 3.43 lakhs in respect of the processing fee. 6. According to the petitioner-Company, State Bank of India has flouted all guidelines of Reserve Bank of India and there was no information about the charging of processing fee at the time of receiving Application and the security given for the previous loan has been withheld, inspite of the fact that the first loan has been pre-paid and that in respect of pre-payment upto 50 lakhs no penalty is attracted, respondents 1 to 4-Bank has calculated Rs. 4.47 lakhs towards pre-payment charges and in any event, the respondents 1 to 4-Bank will be entitled for calculation of penalty at the rate of Rs. 1.4 lakhs and the petitioner is entitled for refund of Rs. 3.43 lakhs; that the State Bank of India has retained the document claiming processing fee, which is breach of code. Even the calculation has not been given properly in respect of pre-payment premium, which is claimed for pre-payment of the existing first loan. In these circumstances, the petitioner by notice dated 19.6.2006, addressed to respondents 1 to 5 called upon respondents 1 to 4 to refund the sum of Rs. 3.43 lakhs paid by way of pre-payment premium as well as Rs. 10.35 lakhs by way of processing fee for the second loan with interest at the rate of 24% p.a. and refund of excess amount claimed by levying 15% in service tax instead of 10.20% as prescribed by law and for payment of Rs. 50 lakhs and pay legal costs of Rs. 50,000/-. 7. According to the petitioner, there is no guideline to calculate the processing fee in respect of loan, which has not been availed and there is no instruction at the time of issuing Application that such fees should be paid by the Applicant. Under the “Fair Practices Code” the borrower must be given sufficient information regarding the processing fee etc. The processing fee of Rs. 10.35 lakhs in respect of the second loan, which has not been availed at all is unreasonable. Simply for the purpose of re-payment of the earlier loan before time an amount of Rs. 4.47 lakhs has been claimed towards pre-payment charge, which is unauthorized. 8. Respondents 1 to 4-Bank have filed counter affidavit. It is the case of respondents 1- to 4-Bank that the loan application of petitioner dated 11.10.2004 contain the conditions mentioned in paragraph No. 2. It is also the case of the said respondents that the petitioner-Company, while seeking financial assistance of Rs. 977 lakhs, has desired additional benefits detailed in paragraph No. 2 and therefore, it is denied that no terms and conditions were available at the time of application. It is also denied that the petitioner had stipulated the terms and conditions in the loan application. The loan application of the petitioner was processed by the bank based on the eligibility of the petitioner in respect of capital subsidy. It is also denied that the petitioner had stipulated the terms and conditions in the loan application. The loan application of the petitioner was processed by the bank based on the eligibility of the petitioner in respect of capital subsidy. It is also denied that the banks Local Head Office persuaded the petitioner to accept sanction letter dated 22.12.2004 and any assurance has been given to the petitioner that the concessions requested by the petitioner would be extended to the petitioner. It is also denied that the petitioner was given assurance that the Head Office at Mumbai will accept the claim of the petitioner. It is also stated that 1% claim as the processing fee in respect of loan is charged for processing the application and it has nothing to do with the availing of the credit facilities or not and the processing fees will be levied irrespective of the fact that the petitioner did not avail the credit limit. 9. It is the case of respondents 1 to 4-Bank that the petitioner has received the sanction letter for Rs. 9.00 crores and thereafter, negotiating with other banks for lesser rate of interest and finally, after a lapse of five months by letter dated 27.5.2007 decided not to avail the credit limit. Therefore, according to respondents 1 to 4 it is unfair and unethical practice adopted by the petitioner. 10. It is again reiterated that the processing fees is not subject to the petitioner availing the credit facilities, but it is charged for processing the application. According to respondents 1 to 4, the petitioner has availed earlier loan of Rs. 6.12 crores for take over of the outstanding with Tourism Finance Corporation Limited as on 15.4.2000. In the sanction letter dated 15.4.2000, it was clearly stipulated about the pre-payment penalty of 1%. The sanction letter dated 15.4.2000 for Rs. 6.12 crores as acknowledged by the petitioner was closed by the petitioner on 1.6.2005 by making prepayment. The bank could not release the Title Deeds, unless the prepayment penalty of Rs. 4.47 lakhs was remitted by the petitioner. 11. It is also denied that the Bank has violated any Reserve Bank of India stipulations. Further, it was found that there was some mistake in calculation of pre-payment premium and therefore, Bank agreed to refund Rs. The bank could not release the Title Deeds, unless the prepayment penalty of Rs. 4.47 lakhs was remitted by the petitioner. 11. It is also denied that the Bank has violated any Reserve Bank of India stipulations. Further, it was found that there was some mistake in calculation of pre-payment premium and therefore, Bank agreed to refund Rs. 21,400/-, which was charged excessively on account of arithmetical mistake and there was no unfair trade practice on the part of respondents 1 to 4. While the petitioner has admitted that calculation statement has been given in respect of prepayment premium, it is false to state that the calculation was wrong and other legal grounds raised by the petitioner has been denied. The telephonic conversation, which is stated by the petitioner is not having any legal veracity and unless and until the copy of recorded conversation is given to respondents, the respondents cannot reply in respect of the alleged telephonic conversation. 12. Fifth respondent/Reserve Bank of India in its counter affidavit while admitted that the guidelines on Fair Practices Code for Lenders were finalized by the Reserve Bank of India in consultation with the Central Government, would further state that the banks and financial institutions have been given freedom to draft their own Fair Practices Code enhancing the scope of the guidelines, but not in anyway sacrificing the spirit underlying the guidelines formulated by Reserve Bank of India. 13. According to the fifth respondent, Reserve Bank of India Act, 1934, is to regulate the issue of bank notes and keeping of reserves with a view to secure the monetary stability of the country and therefore, in respect of the issue involved in this case, Reserve Bank of India is not a necessary party. The guidelines issued by Reserve Bank of India on Fair Practices Code are general guidelines to bank and financial institutions giving them freedom to frame and adopt their own guidelines. 14. Mr. R. Gandhi, the learned senior counsel for the petitioner admitted that the petitioner on earlier occasion has availed the loan to the extent of Rs. 6.12 Crores and has made pre-payment for the purpose of availing the second loan. However, when Application was made for the second loan of Rs. 14. Mr. R. Gandhi, the learned senior counsel for the petitioner admitted that the petitioner on earlier occasion has availed the loan to the extent of Rs. 6.12 Crores and has made pre-payment for the purpose of availing the second loan. However, when Application was made for the second loan of Rs. 977.00 lakh, as a consumer, the petitioner was entitled to look for any Bank, which will give lesser rate of interest and therefore, simply because the petitioner has made an Application and the respondents 1 to 4-Bank has given sanction, it does not amount to availing of the loan and that the processing fee can be claimed only when the loan has been availed. On the facts and circumstances of the case, when the petitioner has only made an Application and has in fact not availed the second loan, compelling the petitioner to pay a huge amount of Rs. 10.35 lakhs as processing fee for the second loan, which has never been availed is usurious and unjustified. Such a claim will be against the Fair Lending Practices of the Code (FLPC) as adopted by the State Bank of India. 15. According to Mr. R. Gandhi, the learned senior counsel the petitioner-Company has not merely requested for waiver of processing fee, but questions the imposing of processing fee, while evaluating the loan Application, as the same is opposed to public policy when loan has not been availed by the petitioner. While it is admitted that the first loan dated 15.4.2000 was accepted and availed, the second loan has neither been accepted nor availed. The learned senior counsel would further submit that the judgment of the Supreme Court in Syndicate Bank v. Vijay Kumar AIR 1992 SC 1066 : (1992) 2 SCC 330 relied upon by the respondents 1 to 4-Bank has no application in the light of Fair Practices Code on Lenders Liability by Reserve Bank of India. The Bank cannot retain the documents received in respect of the first loan, which has been pre-paid and in the circumstance that the second loan has never been availed, there is no right on the part of the Bank to retain the documents. In such circumstances, compelling the petitioner to pay a sum of Rs. 4.47 lakhs as pre-payment penalty is only coercive method. 16. According to Mr. In such circumstances, compelling the petitioner to pay a sum of Rs. 4.47 lakhs as pre-payment penalty is only coercive method. 16. According to Mr. R. Gandhi, the judgment relied upon by the Bank in Tamil Nadu Industrial Investment Corporation Limited v. Millennium Business Solutions Private Limited (2005) 1 MLJ 263 : 2004 (5) CTC 689 has no application, since on the facts and circumstances of the case, it cannot be held that it is a contractual obligation and therefore, this Court has no jurisdiction under Article 226 of Constitution of India. That was also the submission in respect of the reliance placed upon by the respondents in the judgment of this Court in Y. Venkatrayulu v. G. M. RBI and Another Y. Venkatrayulu v. G. M. RBI and Another Y. Venkatrayulu v. G. M. RBI and Another (2007) 137 COMP. Case 72 Mad. It is submitted that the said judgment relates to concluded contract, wherein, the writ petition is not maintainable invoking Article 226 of Constitution of India, but in the present case, there was no concluded contract in respect of the second loan and before availing the second loan, the processing fee is levied, which is against public policy and public interest. 17. The learned senior counsel, also relied upon the Division Bench judgment in State Bank of India v. Kalkapa Transport Company and Another (1980) 82 Bombay LR 318, wherein, the Division Bench of the Bombay High Court has held that the State Bank of India is “ other authority” under Article 12 of Constitution of India and the business of State Bank of India is of public importance and therefore, the procedure must be fair and therefore, the writ petition is maintainable. 18. On the other hand, Mr. K. Sankaran, the learned counsel for respondents 1 to 4 would contend that the writ petition as such is not maintainable as the claim in the writ petition is for recovery of money, which cannot be done in this Court by exercising the jurisdiction under Article 226 of Constitution of India and In support of his contention, he would rely upon the judgment in Whirlpool Corporation v. Registrar of Trade Marks AIR 1999 SC 22 : (1998) 8 SCC 1 . His submission is that when the petitioner is having an effective alternative remedy to either file a Suit or to go before Banking Ombudsman, the writ petition is not maintainable. In support of his contention he has relied upon the judgment Export Credit Guarantee Corporation of India Limited v. A. Jayakumar and Others Export Credit Guarantee Corporation of India Limited v. A. Jayakumar and Others Export Credit Guarantee Corporation of India Limited v. A. Jayakumar and Others (2006) 4 MLJ 230 . It is also his contention that the petitioner was aware of his obligation to pay the processing fee even at the time when the application was made and knowing fully well, he has made the application and the bank has processed the application and the processing fees is levied only for processing the application. 19. As far as Fair Practices Code is concerned, it is the contention of the counsel for respondents 1 to 4 that the State Bank of India Act is also a statutory creature. As far as pre-payment of penalty is concerned, it is forming part of the original Application for the first loan and as per the condition only the said amount is imposed. It is also his submission that even in respect of the first loan, when the pre-payment was made by way of cheque dated 28.5.2005, the said cheque was returned with an endorsement “payment stopped” and therefore, the proceeding under Section 138 of Negotiable Instruments Act has been initiated and thereafter, on 28.6.2005, the petitioner has remitted the amount and all the documents were released on 29.6.2005. It is his further submissions that when the second application was made on 11.10.2004, at the time when the first loan was in existence without full amount repaid and therefore, it cannot be said that all the documents should be returned on the petitioner making his application for the second loan and in support of the contention would rely upon the decision in Syndicate Bank v. Vijay Kumar ( supra) and would submit that the second loan has been sanctioned as early as on 22.12.2004 much before the pre-payment of first loan. 20. 20. The learned counsel for the fifth respondent would rely upon the decision Y. Venkatrayulu v. General Manager, RBI and Another Y. Venkatrayulu v. General Manager, RBI and Another Y. Venkatrayulu v. General Manager, RBI and Another ( supra) to substantiate his contention that these are the contractual matters, which cannot be decided by this Court while disposing of the writ petition. He would also rely upon the decision in Oriental Bank of Commerce v. Sunder Lal Jain (2008) 1 MLJ 1183 (SC) to show that the contractual issues cannot be decided in the writ jurisdiction. He would submit that the Bank under 35-A of Banking Regulation Act issues direction, which are statutory in nature, whereas, the other Codes are only executive in nature. It was heid in T. N. Industrial Investment Corporation Limited v. Millennium Business Solutions Pvt. Ltd T. N. Industrial Investment Corporation Limited v. Millennium Business Solutions Pvt. Ltd T. N. Industrial Investment Corporation Limited v. Millennium Business Solutions Pvt. Ltd . (supra) that a term loan is contractual obligation and he would further submit that compensation cannot be fixed under Article 226 of Constitution of India as claimed by the petitioner in this writ petition. 21. I have heard Mr. R. Gandhi, the learned senior counsel for the petitioner, Mr. K. Sankaran, the learned counsel for respondents 1 to 4 and Mr. C. Mohan, the learned counsel for the fifth respondent and also perused the materials on record and given my anxious thought to the issues involved in this case. 22. Admittedly, in this case the petitioner has availed first loan of a sum of Rs. 6.12 crores as per sanction letter of respondents 1 to 4 dated 15.4.2000 and it is also not in dispute that the same has been closed by way of pre-payment on 1.6.2005. Even before the closure of the first loan, the petitioner has made another application for a second loan on 11.10.2004 claiming loan of Rs. 977 lakhs and it is seen that the respondents 1 to 4-Bank has sanctioned the loan on 22.12.2004, which is before the pre-payment of the petitioner in respect of the first loan, which is on 1.6.2005. A reference to the terms and conditions in respect of the first loan availed by the petitioner makes it clear that the petitioner has given the documents in respect of the properties as securities. A reference to the terms and conditions in respect of the first loan availed by the petitioner makes it clear that the petitioner has given the documents in respect of the properties as securities. While imposing the fee structure in respect of the first loan, condition states that upfront fee at 1.05% of the loan amount has to be paid and admittedly, the said amount was paid. It is also stated in Clause 7 of the terms and conditions that pre-payment charges @ 1% of the outstanding loan amount has to be paid in the event of pre-payment. The conditions in condition No. 7 are as follows: “ 7. Other fees: a) Up front fees @ 1.05% of the loan amount. b) Commitment fee @1% of the undrawn amount from the stipulated date, as per agreed schedule of drawal, till the date of actual drawal with a grace period of one month. c) Pre-payment charges @ 1% of the outstanding loan amount in the event of pre-payment.” 23. It was subject to the above said conditions only, the petitioner has availed the first loan. When admittedly, the petitioner has pre-paid the first loan on 1.6.2005, certainly, he is bound by the terms and conditions in respect of the first loan, which clearly stipulates 1% pre-payment charges to be paid. The terms of the contractual obligation contained in Clause 4 is definitely binding upon the petitioner. 24. It was held in Syndicate Bank v. Vijay Kumar ( supra) that the banker has a general lien over all forms of deposit or securities made by or on behalf of the customer in the ordinary course of Banking Business. 25. In the presence of a definite Clause as stated above, based on which the first loan was availed, there is absolutely no scope for the petitioner to contend that even before pre-payment of the first loan, which was only on 1.6.2005, the respondents 1 to 4-Bank should return the documents, which were given as security for Repayment in respect of the first loan. The respondents 1 to 4-Bank is certainly entitled to retain the documents having a lien over the same till the re-payment of the entire amount of first loan is made. 26. The respondents 1 to 4-Bank is certainly entitled to retain the documents having a lien over the same till the re-payment of the entire amount of first loan is made. 26. As it is stated in the counter affidavit of respondents 1 to 4-Bank that the amount of repayment in respect of the first loan was made by cheque, which was returned and ultimately, after the amount was finally remitted on 28.6.2005, the documents were released on 29.6.2005 itself. Therefore, the contention of the learned senior counsel for the petitioner that respondents 1 to 4 have no right to retain the documents and there is no right on the part of the respondents 1 to 4 to charge pre-payment penalty at 1% of the outstanding loan amount has no basis at all, since the same is finding place in the terms and conditions and the terms and conditions are only contractual and it can never be said that in respect of challenging the said condition, State Bank of India is to be treated as “State” under Article 12 of Constitution of India. The conditions have no other sanctity than it being contractually enforceable between the parties. 27. In respect of the processing fee for the second loan, as rightly submitted by the learned counsel for respondents 1 to 4-Bank, the petitioner himself is well aware of his liability to pay the processing and appraisal fee and it is only due to that reason the petitioner-Company itself has made a request to the respondents 1 to 4-Bank to waive the processing and appraisal fee. Therefore, having requested the respondents 1 to 4-Bank to waive the processing and appraisal fee, the petitioner cannot now contend that respondents 1 to 4 have no jurisdiction to claim processing and appraisal fee at all and the same was not informed to the petitioner at the time when application was made for the second loan. 28. The guidelines on Fair Lending Practices Code (FLPC) which were finalized by the Reserve Bank of India has been no doubt adopted by respondents 1 to 4-Bank. Clause 3.6 of the said code, which speaks about the “Terms and Conditions for Lending” makes it clear that the loan Application Forms and other documents to be signed by the customer shall contain all terms and conditions relating 22 to the product of or service of his choice. Clause 3.6 of the said code, which speaks about the “Terms and Conditions for Lending” makes it clear that the loan Application Forms and other documents to be signed by the customer shall contain all terms and conditions relating 22 to the product of or service of his choice. The said clause reads as follows: “ 3. 6. Terms and Conditions for Lending: ( a) The Bank would ordinarily give an acknowledgement of receipt of loan request and if demanded by the customer, a copy of the application form duly acknowledged would also be given, as soon as the customer chooses to buy a product of or service of his choice. (b) Immediately after the decision to sanction the loan, the Bank would show draft of the documents that the customer is required to execute and would explain, if demanded by the customer, the relevant terms and conditions for sanction and disbursement of loan. (c) Loan Applications forms, Draft documents or such other papers to be signed by a customer shall comprehensively contain all the terms and conditions relating to the product or service of his choice. (d) Reasons for rejection of loan applications would be conveyed to small borrowers seeking loans up to Rs. 2 lac. ( e) Before disbursement of loan and on immediate execution of the loan documents, the Bank shall deliver a copy of the documents to the customers.” 29. It cannot be the case of the petitioner in this case that at the time when the petitioner made application for second loan, there was no such conditions available. His request was by way of a claim stating about the prosperity of the petitioner-Company as it is seen in the application of the petitioner dated 11.10.2004. As seen in the circular issued by the respondents 1 to 4-Bank regarding the Revised Service Charges on 17.1.2006 the service charges are recovered from the users of Banking Service. His request was by way of a claim stating about the prosperity of the petitioner-Company as it is seen in the application of the petitioner dated 11.10.2004. As seen in the circular issued by the respondents 1 to 4-Bank regarding the Revised Service Charges on 17.1.2006 the service charges are recovered from the users of Banking Service. Whether the Banking Service on the facts and circumstances of this case stated to have been done by respondents 1 to 4-Bank by processing the application of the petitioner for the second loan, was completed before the sanction letter was given by the Bank, or the Bank is entitled to claim such service charges in respect of granting of loan only after the loans are availed by the customer, are all relating to the instructions of terms and conditions of loan and also various circulars issued by respondents 1 to 4, which is a Bank created under the Act. Even though it is true that the State Bank of India can be treated as “other authority” as per Article 12 of Constitution of India, in the conduct of the State Bank of India, claiming recovery of any amount as processing fee it is purely contractual, since it is only between the Bank and a customer and that cannot be the subject matter of dispute under Article 226 of Constitution of India. 30. While dealing about the guidelines issued by the Reserve Bank of India, the Supreme Court in Oriental Bank of Commerce v. Sunder Lal Jain (2008) MLJ 1181 (SC) has held that such guidelines are purely executive instructions and have no statutory force. In fact, the fifth respondent in the counter affidavit has also stated in clear terms that the code approved by Reserve Bank of India is only general code. The individual Banks are given freedom to adopt their own guidelines, based on which, the relationship with the customers can be maintained. In view of the stand taken by the Reserve Bank of India and on the basis of the judgment of the Supreme Court holding that such guidelines of Reserve Bank of India are only executive instructions and having no statutory forces, I do not see any reason in the contention of the learned senior counsel for the petitioner, that there is disobeyance of the guidelines issued by Reserve Bank of India by respondents 1 to 4-Bank. 31. 31. Even a reading of the Reserve Bank of India “Fair Practices Code on Lenders Liability” dated December 2002, makes it clear that it is an executive instruction. Further, the terms and conditions stipulated by the State Bank of India as it is seen in the Sanction Order dated 22.12.2004 contains a specific clause, viz., Clause 17, “Upfront fee at 1% of the term loan amount for processing the loan will be recovered. Further charges incurred towards obtaining credit information reports from Agencies like Dun and Bradstreet will be recovered.” Again in Clause 18, it is clearly stated that, “The Bank shall recover pre-payment charge at the rate of 2% of the pre-paid amount in the event of the Term Loan being repaid before its normal closure.” In the light of the letter written by the petitioner dated 10.1.2005 addressed to the Assistant General Manager, State Bank of India the petitioner has clearly stated that the State Bank of India has sanctioned term loan facility of Rs. 9.00 crores. The said letter dated 10.1.2005 reads as follows: Sub: Financial assistance for our hotel project at Bangalore - reg. Ref: Your letter of sanction dated 22.12.2004 No. MCR/RM III/24. Thank you for sanctioning us a term loan facility of Rs. 9.00 crores. Please grant us the following additional concessions for us to avail the sanctioned facility. On further consideration of the rate of interest you propose to charge for our FCNRB loan, the spread may please be reduced to 225 basis points over LIBOR. Given the risk involved in taking a foreign currency loan any rate higher than this will not make it a profitable proposition. Moreover, SBI has been lending at this rate for other hotel ventures and we request you to consider us at par with your other borrowers.” In the light of the said letter of the petitioner, thanking the Bank for having sanctioned the term loan facility of Rs. 9.00 crores, now it is not open to the petitioner to turn around and say that he has not availed the loan and therefore, processing fee cannot be paid. 32. The Honourable First Bench of this Court in T. N. Industrial Investment Corporation Limited rep. by its Manging Director, Chennai-35 v. Millenium Business Solution Pvt. Ltd T. N. Industrial Investment Corporation Limited rep. 32. The Honourable First Bench of this Court in T. N. Industrial Investment Corporation Limited rep. by its Manging Director, Chennai-35 v. Millenium Business Solution Pvt. Ltd T. N. Industrial Investment Corporation Limited rep. by its Manging Director, Chennai-35 v. Millenium Business Solution Pvt. Ltd T. N. Industrial Investment Corporation Limited rep. by its Manging Director, Chennai-35 v. Millenium Business Solution Pvt. Ltd . (supra) presided by Chief Justice MARKANDEY KATJU (as he then was) and Justice N.V. BAIASUBRAMANIAN (as he then was) has held that loan is granted in terms of contract and the Court cannot alter the terms of contract as follows: “ 16. A loan is granted in terms of the contract, and grant of one time settlement or re-scheduling of the loan amount is really a modification of the contract, which can only be done by mutual consent of the parties, vide Section 62 of the Contract Act, 1872. The Court cannot alter the terms of the contract.” 33. In Export Credit Guarantee Corporation of India Limited v. A. Jayakumar and Others Export Credit Guarantee Corporation of India Limited v. A. Jayakumar and Others Export Credit Guarantee Corporation of India Limited v. A. Jayakumar and Others(supra), the Division Bench of this Court presided by Justice P. SATHASIVAM (as he then was), while deciding about the maintainability of writ petition under Article 226 against the Export Credit Guarantee Corporation of India, where disputed questions of fact were involved, it was held that the plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14. The operative portion of the judgment of the Division Bench reads as follows: “25. Finally, the learned counsel for the writ petitioners heavily relied on ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. (supra). The case relates to the maintainability of a writ petition under Article 226 of the Constitution against Export Credit Guarantee Corporation of India when disputes questions of fact are involved. Finally, the learned counsel for the writ petitioners heavily relied on ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. (supra). The case relates to the maintainability of a writ petition under Article 226 of the Constitution against Export Credit Guarantee Corporation of India when disputes questions of fact are involved. Though learned single Judge of the Calcutta High Court quashed the letters of repudiation issued By ECGC and allowed the writ petition, the appellate Bench of the same High Court reversed the findings of the learned single Judge and held that the claim of appellant involving disputed questions of fact cannot be adjudicated in a writ proceedings under Article 226 of the Constitution and set aside the judgment of the learned single judge. A perusal of the Supreme Court judgment shows that the main argument relates to the maintainability of the writ petition under Article 226 of the Constitution of India in respect of disputed questions of fact. Their Lordships also discussed and arrived at the conclusion that ECGC is an instrumentality of State discharging public function. 26. After detailed discussion in para-27 their Lordships have framed the following legal principles as to the maintainability of the writ petition: “ 27( a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. (b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. (c) A writ petition involving a consequential relief of monetary claim is also maintainable. 28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the Court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. Whirlpool Corporation v. Registrar of Trade Marks (1998) 8 SCC 1 . The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. Whirlpool Corporation v. Registrar of Trade Marks (1998) 8 SCC 1 . And this plenary right of the High Court to issue a prerogative writ will‘ not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons; for which the Court thinks it necessary to exercise the said jurisdiction.” 34. While construing the banker and customer relationship in the light of bill of exchange, where the bank has instruction to collect the payment from the buyer abroad on delivery of goods, in which, this Court inY. Venkatrayulu v. General Manager, RBI and Another Venkatrayulu v. General Manager, RBI and Another Venkatrayulu v. General Manager, RBI and Another ( supra) after referring to various judgments of the Apex Court regarding the jurisdiction of the High Court under Article 226 of Constitution of India has held that in cases where there are breach of contract or non-performance of contractual obligations, Article 226 cannot be invoked. 35. On the factual matrix in this case as to whether the petitioner is bound by the terms and conditions as contained in the application for the second loan, are all the contractual obligations between the petitioner and State Bank of India and that cannot be decided in the writ petition. Further, the claim of the petitioner for payment of damages to the extent of Rs. 50 lakhs for causing irreparable business loss and damage to the petitioner can never be entertained by this Court under Article 226 of Constitution of India. Further, the claim of the petitioner for payment of damages to the extent of Rs. 50 lakhs for causing irreparable business loss and damage to the petitioner can never be entertained by this Court under Article 226 of Constitution of India. On the facts of the case, it is admitted that the petitioner in fact has made payment of the claim made by the respondents 1 to 4-Bank both in respect of pre-payment penalty as well as processing fee and having made payment under protest the present writ petition is filed to refund pre-payment premium as well as the processing fee, which in fact would amount to recovery of money and that cannot be entertained under Article 226 of Constitution of India and therefore, looking at any angle, I am of the considered view that the writ petition is not maintainable and the same is dismissed. However, it is always open to the petitioner to work out the remedy available to the petitioner in the manner known to law. No costs.