JUDGMENT : Subrata Talukdar, J. 1. The above referred batch of writ petitions, WP 54 of 2012, WP 89 of 2012, WP 90 of 2012 and WP 91 of 2012 (respectively numbered as WP-I, WP-II, WP-III & WP-IV) raise a common issue. Therefore, all the writ petitions were heard analogously and the issue common to all is decided by this common judgment and order. 2. Since WP-I has been principally argued by Ld. Counsel for both the Writ Petitioner and the Respondent/State Bank of India/the Bank, the arguments in WP-I are considered as adopted in respect of the other Writ Petitions, i.e. WPs II, III, and IV. The findings of this Court in WP-I shall accordingly also cover the other WPs (supra). 3. Now, proceeding to the essential facts as argued in WP-I, Mr. Abhrajit Mitra, Ld. Senior Counsel appearing for the Petitioner submits that the respondent No. 1/State Bank of India (SBI) has acted illegally in deducting Pre-Payment Penalty (PPP) from the Company at the time of foreclosure of its Term Loan (TL) account with the SBI prior to its Maturity. 4. It is submitted that the Petitioners/Companies in all three WPs (supra) are engaged in the business of real estate. The petitioners in all the WPs approached the SBI for sanction of TL for the purpose of developing a piece of real estate. It was agreed by and between the parties, i.e. the Companies and SBI, that the rental income from the constructed portion would be remitted to the Bank towards repayment of the TL. It is alleged that the SBI, after the sanction of the first tranche of TL, when approached by the petitioners to sanction the second and/or subsequent tranches of TLs against repayment through rentals, delayed in doing the same. 5. Mr. Mitra submits that ultimately the second and/or subsequent tranches of TLs was provided by SBI on the usual terms and conditions which, included, inter alia, collateral security, personal guarantee, corporate guarantee, fixed deposit (FD) security and PP charges. It is also alleged that for the delay caused by the SBI in sanctioning the subsequent tranches of TLs the petitioners were compelled to look for better opportunities elsewhere. 6. The petitioner company claims to have received softer funding of TLs from the Indian Overseas Bank (IOB) and hence decided to foreclose the TL altogether with the SBI. It is also alleged that for the delay caused by the SBI in sanctioning the subsequent tranches of TLs the petitioners were compelled to look for better opportunities elsewhere. 6. The petitioner company claims to have received softer funding of TLs from the Indian Overseas Bank (IOB) and hence decided to foreclose the TL altogether with the SBI. It is alleged that the petitioners were compelled to not only refund the balance repayable TL to the SBI but in addition, from their existing FDs, a PPP deducted as penalty by the SBI totalling Rs. 8,22,580/-. It is this deduction of the PPP which is under challenge in this batch of writ petitions. 7. Referring to Section 74 of the Indian Contract Act, 1972 (for short the Contract Act), Mr. Mitra submits that the concept of imposition of penalty would apply only in a situation where a breach of contract has occurred. Ld. Senior Counsel for the Petitioner argues that foreclosure of the TL account cannot be described as a breach of contract warranting levy of penalty. The concept of breach of contract would necessarily include and imply a computable loss caused to one of the contracting parties as a result of the breach. 8. Relying on the authorities of 2015 (4) SCC 136 and 2016 (3) SCC 643 , In Re: Kailash Nath Associates vs. Delhi Development Authority & Anr. and In Re: Shree Bhagwati Steel Rolling Mills vs. Commissioner of Central Excise respectively, it is argued that a levy of penalty equivalent to compensating a party for a definable/actual loss can only arise when the suffering party can demonstrate tangible proof of such loss. 9. Mr. Mitra places heavy reliance on Paragraph 32 of 2015 (4) SCC 136 (supra) which reads as follows:- "32. By an amendment made in 1899, the Section was amended to read: "74. 9. Mr. Mitra places heavy reliance on Paragraph 32 of 2015 (4) SCC 136 (supra) which reads as follows:- "32. By an amendment made in 1899, the Section was amended to read: "74. Compensation for breach of contract where penalty stipulated for.- When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for. Explanation.-A stipulation for increased interest from the date of default may be a stipulation by way of penalty. Exception.-When any person enters into any bail-bond, recognizance or other instrument of the same nature, or, under the provisions of any law, or under the orders of the Central Government or of any State Government, gives any bond for the performance of any public duty or act in which the public are interested, he shall be liable, upon breach of any condition of any such instrument, to pay the whole sum mentioned therein. Explanation.-A person who enters into a contract with Government does not necessarily thereby undertake any public duty, or promise to do an act in which the public are interested." 10. Mr. Mitra also places reliance on Paragraph 39 of 2016 (3) SCC 643 (supra) which reads as follows:- "39. A penalty can only be levied by authority of statutory law, and Section 37 of the Act, as has been extracted above does not expressly authorize the Government to levy penalty higher than Rs. 5,000/-. This further shows that imposition of a mandatory penalty equal to the amount of duty not being by statute would itself make rules 96 ZO, 96 ZP and 96 ZQ without authority of law. We, therefore, uphold the contention of the assessees in all these cases and strike down rules 96ZO, 96 ZP and 96 ZQ insofar as they impose a mandatory penalty equivalent to the amount of duty on the ground that these provisions are violative of Article 14, 19(1)(g) and are ultra vires the Central Excise Act." 11. Ld. We, therefore, uphold the contention of the assessees in all these cases and strike down rules 96ZO, 96 ZP and 96 ZQ insofar as they impose a mandatory penalty equivalent to the amount of duty on the ground that these provisions are violative of Article 14, 19(1)(g) and are ultra vires the Central Excise Act." 11. Ld. Senior Counsel for the Company asserts that it is not the case of the Respondent No. 1/SBI that it has suffered a definite loss or damage which can be read as a breach of contract by the Borrower/the Petitioner. Under the agreement/contract with SBI, the petitioners were empowered to foreclose the TL. It has not been demonstrated by SBI that it has suffered a defined quantum of loss or damage due to such foreclosure. Accordingly, the levy of PPP by SBI being patently not recognised by established legal canons, the same deserves to be set aside and the Company refunded the PPP it has been forced to part with by the Bank. 12. Mr. Mitra also relies upon the authority of the Hon'ble High Court of Delhi at New Delhi reported in, In Re: DLF Ltd. vs. Punjab National Bank. Taking this Court to Paragraphs 23 and 28 thereof, Mr. Mitra submits that although PPP may be arguably a recognised modality adopted in routine loan agreements, the same cannot be over and beyond the stipulations of Section 74 of the Contract Act. It is argued that the Hon'ble Delhi High Court correctly noticed In Re: DLF Ltd. that the Bank would be liable to prove before the appropriate forum the actual loss suffered by it on account of the breach complained of arising out of the foreclosure. As a corollary it follows that in the event actual loss is not proved, the Bank, in this case the SBI, would not have any right to unilaterally debit any penalty from the account of borrower. 13. Paragraph 23 of In Re: DLF Ltd. reads as follows:- "23. It is again not as if pre-payment is a taboo. According to the respondent Bank also, pre-payment is possible on payment of charges/penalty therefore. The parties in the present case chose not to provide for the compensation/penalty payable for breach on account of pre-payment. 13. Paragraph 23 of In Re: DLF Ltd. reads as follows:- "23. It is again not as if pre-payment is a taboo. According to the respondent Bank also, pre-payment is possible on payment of charges/penalty therefore. The parties in the present case chose not to provide for the compensation/penalty payable for breach on account of pre-payment. Even if such compensation/penalty is stipulated in the Loan Agreement, the same under Section 74 of the Indian Contract Act r/w the dicta of the Constitution Bench in Fateh Chand Vs. Balkishan Dass AIR 1963 SC 1405 is only the maximum extent of penalty/compensation payable for such breach. The respondent Bank would still be liable to prove before the appropriate fora the loss suffered by it by such breach and would be entitled to only such compensation to the extent of loss shown. Unless such compensation is determined, the respondent Bank could not have and has not disclosed any right, to unilaterally debit the account of the petitioner or to threaten the petitioner with downgrading of its account or with reporting it as a default to the agency concerned. The entire loan amount having already been received by the respondent Bank, the respondent Bank is not entitled to withhold valuable security furnished for re-payment especially when the amount claimed by it is a miniscule i.e. 2% only of the loan amount for which security was taken." 14. Per contra, Mr. Subrata Kumar Sinha, Ld. Counsel appearing for the Respondent No. 1/SBI the Bank submits that the facts presented in the writ petitions arise straight out of a contract pledging property and/or income/usufructs enjoyed by the Borrower/the Company out of such property. The Petitioner agreed with eyes open to avail of the TLs on the terms and conditions offered by the Bank. PPP features as a prominent clause of the TL agreement. 15. The attention of this Court is drawn to the sanction letter dated 4th of July, 2008 whereby the clause imposing PPP reads as follows:- "Pre-Payment charge: Interest on the Term Loan is subject to reset after every 2 years. The Company will have the exit option without paying pre-payment penalty in the event of upward revision in rate at the time of reset. The Company will have the exit option without paying pre-payment penalty in the event of upward revision in rate at the time of reset. In case of pre-payment by way of takeover of the loan by another bank/FI, and not triggered by an increase in our interest rate, however, the normal pre-payment penalty at 2% will apply for the residual period of the loan. Pre-payment penalty at 1% for the residual period will apply in the event of pre-payment from internal accruals, for reason other than upward reset of interest rate." 16. Mr. Sinha submits that both the initial and subsequent disbursement of TL were subject to covenants agreed by and between the parties, inclusive of levy of PPP. The agreements countenanced the performance of several reciprocal obligations by and between the parties. Ld. Counsel for the SBI seriously refutes the allegation of the Company that there was delay in sanctioning the second and subsequent tranche of TLs against rentals. Referring to the affidavit-in-opposition of the Bank to WP-I, Mr. Sinha submits that due to several factors attributable to the Company/the Borrower, the obligations/formalities connected to sanction of TLs could not be performed on time and for such delay the SBI is not responsible. It is also asserted that the Master Circular of the RBI provides for levy of PPP. 17. Referring to the correspondence on record and, particularly the communication of the Company to the SBI dated 18th February, 2010, Mr. Sinha clarifies that the petitioners deposited the amount due for foreclosure of the TL account and agreed to adjustment of PPP from their FDs. The communication dated 18th February, 2010 therefore requires to be reproduced in full for the present discussion:- 18.02.2010 "To The Assistant General Manager & R.M.-III, State Bank of India, Overseas Branch, 1, Strand Road, Kolkata - 700001 Sub: Closure of Loan Account A/c. No. 30536110943 Ref: Rent Securitisation loan of Rs. 3.95 Crore Sir, With reference to the above, we have deposited a Pay Order of Rs. 40820000/- (Rupees Four Crore Eight Lakh Twenty Thousand only) dated 17.02.2010 in Escrow Account No. 30531697650 towards outstanding due against the above loan account No. 30536110943 and hereby request you to kindly adjust the loan amount immediately. 3.95 Crore Sir, With reference to the above, we have deposited a Pay Order of Rs. 40820000/- (Rupees Four Crore Eight Lakh Twenty Thousand only) dated 17.02.2010 in Escrow Account No. 30531697650 towards outstanding due against the above loan account No. 30536110943 and hereby request you to kindly adjust the loan amount immediately. The pre-payment charges payable on account of closer of the above account including balance interest, if any may kindly be adjusted from cash security lying as Fixed Deposit with you and refund the balance amount by way of Pay Order immediately. We further request you to kindly release the original title deed of our premises at 145, Rash Behari Avenue, Kolkata. Your prompt action in the matter shall highly be appreciated. Thanking you, Yours faithfully, For Santosh Promoters Pvt. Ltd. Sd/- Director." 18. Mr. Sinha argues that the Company cannot be permitted to do a volte-face at this stage citing breach equivalent to computable loss having agreed throughout to act in terms of the mutual agreement by and between the Parties, inclusive of PPP. 19. Mr. Sinha submits that the Bank is in the business of banking. The business of banking involves optimum utilisation of funds. In the case of a TL or any other loan extended to a borrower for a pre-determined term, the Bank expects its money to be utilised in the form of returns spread over such period of time. Based on the returns the Bank calibrates its business qua other banks, the principal Bank as well as its diverse borrowers and customers. 20. Accordingly, the rate of the PPP is the calibrated return which the Bank expects in the event of a foreclosure. PPP can be therefore best understood as a charge or a levy which keeps the business of the Bank viable. 21. Ld. Counsel for the SBI submits that it is not the case of the Petitioners that PPP is not a part of normal banking agreements. Even with the so/called softer loan funding claimed to have been received by the Petitioner/the Company from the IOB, the loan terms of the IOB provide for charging PPP in the event of a foreclosure. The Petitioner/the Company has now contrived a situation of breach equivalent to computable loss plucking out only the word 'Penalty' out of the consolidated expression and concept of PPP in a normal banking agreement. 22. Mr. The Petitioner/the Company has now contrived a situation of breach equivalent to computable loss plucking out only the word 'Penalty' out of the consolidated expression and concept of PPP in a normal banking agreement. 22. Mr. Sinha adds the argument that in the event this Court finds the stand of the Bank acceptable, then the so-called issue of 'Penalty' embedded in a contract cannot be isolated for use in a litigation under Article 226 of the Constitution of India without the contract be appreciated holistically. The Petitioner/the Company can approach, if advised, a civil Court for its Monetary. 23. Next, relying upon the correspondence dated 18th February, 2010 (supra), Mr. Sinha points out that the conduct of the Petitioner/the Company stands undermined by waiver, acquiescence and principles analogous thereto. 24. Having heard the parties and considering the materials placed, this Court finds as follows. 25. That the parties, viz. the Petitioner/Company and the Bank agreed to bind themselves in a fiduciary relationship cemented by a contract. Normal commercial/market prudence attaches itself to all and sundry aspects of such contract which was again acted upon by the parties without fuss or demur fill the moment of foreclosure. 26. PPP is again an integral clause of the contract. The principle relevant to the mind of this Court to interpret PPP is to put the affected Party, as far as practicable, in the same position as if the contract had been performed. This Court draws its inspiration for concluding as above upon respectfully noticing the 'Reportable' decision in Civil Appeal No. 3533-3534 of 2017, In Re: M/s. Fortune Infrastructure (Now Known as M/s. Hicon Infrastructure) & Anr. vs. Trevor D'lima & Ors., wherein the Hon'ble Apex Court, observed, upon noticing the pronouncement In Re: Johnson & Anr. vs. Agnew, 1979 (1) AER 883, as follows:- "11. It is well established that the contractual damages are usually awarded to compensate an injured party to a breach of contract for the loss of his bargain. In the case of Johnson and Anr. V. Agnew, [1979] 1 All ER 883, the aforesaid case has clearly held as under- The general principle for the assessment of damages is compensatory, i.e. that the innocent party is to be placed, so far as money can do so, in the same position as if the contract had been performed. 12. In the case of Johnson and Anr. V. Agnew, [1979] 1 All ER 883, the aforesaid case has clearly held as under- The general principle for the assessment of damages is compensatory, i.e. that the innocent party is to be placed, so far as money can do so, in the same position as if the contract had been performed. 12. The aforesaid proposition remains to hold the field and has been applied consistently. This rule is more qualified when it comes to the real estate sector. If the seller wants to limit their liability for breach of contract under the aforesaid rule, they have to portray that they have performed their obligation in a prudent manner. It may be noted that the onus is on the seller to show his best efforts and bona fides in discharging the obligation. It may be noted that even in the absence of fraud, mere unwillingness to carry out the duty could constitute bad faith sufficient for the purchaser to claim damages." 27. This Court must further notice that the Hon'ble Division Bench In Re: MBL Infrastructures Ltd. (supra) has correctly noticed the long and short of what is breach and damages under Section 74 of the Contract Act. The Hon'ble Division Bench appropriately referring to Paragraph 43.6 of In Re: Kailas Nath Associates (supra), concluded and, respectfully rightly so, that when and where a genuine pre-estimate of damage exits, the proof of actual loss or damage can be dispensed with. To the mind of this Court PPP, when contextually understood within the paradigm of the contract working itself out between the parties, echoes the genuine pre-estimate of damage or loss arising in the event of a foreclosure. 28. The PPP clause, when read in fine print, provides for the happening of the following contingencies:- (a) The petitioner/company to enjoy the exit option without paying PPP in the event of an upward revision in the rate of interest by the Bank when called upon to reset the loan. (b) In the event of takeover of the loan by another Bank/Financial Institution (FI) and not triggered by an increase in the interest rate of the bank, the PPP shall be at 2 per cent for the residual period of the loan. (b) In the event of takeover of the loan by another Bank/Financial Institution (FI) and not triggered by an increase in the interest rate of the bank, the PPP shall be at 2 per cent for the residual period of the loan. (c) PPP at 1 per cent for the residual period will be charged on pre-payment taking place from internal accruals and for a reason other than the upward reset of interest rate. 29. To the mind of this Court the event at (b) above having occurred in the facts of the present case, the Bank was entitled to charge the normal PPP at 2 per cent for the residual period remaining at the stage of the takeover of the loan by another bank. The PPP rate for the residual period connotes a genuine pre-estimate of the loss suffered by the Bank on account of foreclosure of the loan under (b) above of the PPP clause. In the above view of the matter, the position of the law must be accepted that on a genuine pre-estimate of the loss, the Bank is not under any liability to further prove the actual quantum of the loss. 30. The law noticed In Re: MBL Infrastructures is also the law noticed by the Hon'ble Single Bench In Re: M/s. SPPL Hospitals Pvt. Ltd. & Anr. wherein the Hon'ble Single Bench arrived at the further conclusion that with the deposit and acceptance of PPP by the contracting parties, the contract stood discharged by accord and satisfaction. The principle of accord and satisfaction is underscored by the substitution of obligations performed between the parties pursuant to obligations originally contracted. 31. This Court also finds from the legal authorities cited at the Bar that the imposition of PPP has been held to be part of normal banking service and PPP held not to be anti-competitive by the Competition Commission of India in its majority ruling In Re: Niraj Malhotra vs. Deutsche Bank (Case No. 5 of 2009). 32. Prior to closing this discussion, it will be useful to refer to the following passage of the Forty-Ninth Series of the Hamlyn Lectures by Professor Roy Goode in 1997 on 'Commercial Law in the Next Millennium':- "English law is very reluctant to recognise change of circumstances as a ground for relieving parties of their contractual obligations. 32. Prior to closing this discussion, it will be useful to refer to the following passage of the Forty-Ninth Series of the Hamlyn Lectures by Professor Roy Goode in 1997 on 'Commercial Law in the Next Millennium':- "English law is very reluctant to recognise change of circumstances as a ground for relieving parties of their contractual obligations. The starting point is that the parties can always provide in their contract for events which substantially alter the economic equilibrium of the contract, and if they choose not to do so that is their affair: they have made their bed, they must lie in it. English law has not yet adopted the softer, American version of frustration covering cases where performance has become impracticable. Only in extreme circumstances, such as physical destruction of the subject-matter of the contract, supervening illegality or disappearance of the whole substratum of the contract, will the law give relief. And in these cases the relief takes the form of automatic termination of the contract by force of law. The all-or-nothing nature of this doctrine of frustration, as it is termed, is striking. English law knows no halfway house between full enforceability and automatic termination by force of law. Modification of a contract through change of circumstances falling short of frustration is not a remedy to be found in the medicine chest of our contract law. This reflects the long-established principle that it is not for the courts to remake the parties' bargains." 33. In the backdrop of the above discussion, this Court finds no infirmity in the action impugned of the Bank. 34. The issue of charge of PPP by the Bank stands answered in the affirmative. WP No. 54 of 2012 thus fails and stands accordingly dismissed. 35. WP No. 89 of 2012, WP No. 90 of 2012 and WP No. 91 of 2012 also fail and stand dismissed. 36. There will be, however, no order as to costs. 37. Urgent certified photocopies of this judgment, if applied for, be given to the learned advocates for the parties upon compliance of all formalities.