ORDER : 1. The instant writ petition is directed against the communication dated 12.02.2015 issued by the respondent-Bank, whereby the petitioner has been called upon to remit a sum of Rs.92,88,300/- towards interest and penalty, allegedly on account of violation of the terms and conditions of the loan agreement. 2. The case of the petitioner is that he is a medical practitioner by profession. With the intention of constructing a residential house, the petitioner purchased Site No.12 (Old No.10/A), Magrath Road, Ashok Nagar, Bangalore, from one Vikram Malhotra under a registered Sale Deed dated 30.08.2002. In order to finance the said purchase, the petitioner approached the respondent-Bank for a loan. Upon consideration of the application of the petitioner, the respondent-Bank sanctioned a sum of Rs.1.50 Crore, with interest as agreed between the parties, for the purchase of the schedule property.Thereafter, the petitioner commenced construction of a building on the said property. 2.1 One Mr. Asha John Divianathan impleaded the petitioner in RFA No.1001/2001 and sought a temporary injunction restraining the petitioner from alienating the property or proceeding with construction thereon. This Court, by order dated 07.04.2005, granted an interim injunction restraining the petitioner from putting up any construction. The said RFA pertained to a challenge to the gift deed executed in favour of the petitioner’s vendor, namely, Vikram Malhotra. The said gift deed, which related to the schedule property purchased by the petitioner, was challenged by Mr. R.P. David. By judgment and order dated 01.10.2009, this Court upheld the validity of the gift deed and, consequently, the sale deed executed in favour of the petitioner. Aggrieved by the said judgment, Mr. Asha John Divianathan preferred Special Leave Petition No.31217/2009 before the Hon’ble Supreme Court, wherein, by order dated 04.12.2009, the Hon’ble Court directed that status quo be maintained by the parties. The petitioner’s application seeking vacation of the interim order came to be rejected. Upon grant of special leave, the matter came to be numbered as Civil Appeal No.9546/2010. During the pendency of the said appeal, the petitioner filed an application seeking early hearing, citing contractual obligations. 3. The respondent-Bank, by communication dated 29.09.2014, demanded a sum of Rs.9,28,300/-, being 2% penalty, on the ground that the petitioner had failed to commence construction within the agreed period. During the pendency of the said appeal, the petitioner filed an application seeking early hearing, citing contractual obligations. 3. The respondent-Bank, by communication dated 29.09.2014, demanded a sum of Rs.9,28,300/-, being 2% penalty, on the ground that the petitioner had failed to commence construction within the agreed period. In response, the petitioner submitted a detailed reply dated 10.11.2014, drawing the attention of the respondent-Bank to the status quo order passed by the Hon’ble Supreme Court and asserting that the non-commencement of construction was due to circumstances beyond his control. The petitioner further contended that the delay did not amount to a violation of the terms and conditions of the loan agreement. Notwithstanding the same, the respondent-Bank issued a demand notice dated 27.11.2014, calling upon the petitioner to remit a sum of Rs.9,28,300/-. The petitioner, once again, submitted a reply dated 06.02.2015, reiterating the compelling reasons for the delay in commencement of construction. However, the respondent-Bank, by final communication dated 12.02.2015, insisted upon payment of Rs.9,28,300/-, disregarding the petitioner’s explanation and the constraints faced by him. This Court, by order dated 10.06.2015, directed the respondent-Bank not to precipitate the matter pursuant to the notice dated 12.02.2015. Subsequently, during the pendency of the present writ petition, the Hon’ble Supreme Court decided Civil Appeal No.9546/2010 and decreed the suit. As a consequence thereof, the gift deed and the subsequent sale deed executed in favour of the petitioner stood set aside. 4. Sri L.M. Chiddanandayya, learned counsel appearing for the petitioner, submits that the demand made by the respondent-Bank is arbitrary and in violation of the principles of fair practice. It is contended that although the loan sanction letter stipulated a condition for payment of penalty/interest in the event construction was not commenced within two years, the enforcement of such condition was contingent upon the petitioner furnishing an undertaking accepting the said stipulation. It is further submitted that no such undertaking was ever executed or furnished by the petitioner, and therefore, the said condition is not attracted in the present case. 5. Learned counsel further submits that the petitioner had taken immediate steps to commence construction upon execution of the sale deed. However, in view of the injunctive orders passed by this Court as well as by the Hon’ble Supreme Court, the petitioner was legally restrained from proceeding with the construction, which was entirely beyond his control. 5. Learned counsel further submits that the petitioner had taken immediate steps to commence construction upon execution of the sale deed. However, in view of the injunctive orders passed by this Court as well as by the Hon’ble Supreme Court, the petitioner was legally restrained from proceeding with the construction, which was entirely beyond his control. It is further submitted that during the pendency of the present writ petition, the Hon’ble Supreme Court set aside the gift deed, based on which the sale deed in favour of the petitioner had been executed. Consequently, the sale deed now stands nullified. Learned counsel contends that in light of these subsequent developments, none of which were within the contemplation or control of the petitioner, the entire contract stands frustrated. Even assuming, without admitting, that there existed any condition agreed upon between the parties regarding penalty, the supervening impossibility has rendered such condition incapable of performance, and thereby frustrated in law. Hence, the demand for interest/penalty at the rate of 2% is illegal, arbitrary, and unsustainable. 6. Learned counsel further submits that, although the sale deed pertaining to the property for which the loan was availed has been set aside, the petitioner has nonetheless fulfilled his contractual obligation by repaying the entire loan amount along with the agreed rate of interest. It is contended that the demand made by the respondent-Bank, over and above the principal and agreed interest, amounts to an arbitrary exercise of power. Learned counsel also submits that, even if the dispute arises out of a contractual relationship, any action on the part of a public authority that is arbitrary, unreasonable, or illegal is amenable to judicial review under Article 226 of the Constitution of India. 7. Learned counsel for the petitioner relies on the following judgments of the Hon'ble Supreme Court and this Court in, (i) Boothalinga Agencies vs. V.T.C. Poriaswami Nadar, AIR 1969 SC 110 (ii) Basavalingappa Mamle Desai vs. Siddalingappa, 1973 (3) SCC 180 (iii) Shanti Vijay and Co. vs. Princess Fatima Fouzia, (1979) 4 SCC 602 (iv) H.P. Krishna Reddy vs. Canara Bank, AIR 1985 Kant. 228 (v) M/s. Sathya Granites vs. New Mangalore Port Trust, Government of India and others , Writ Petition No. 7743/2021 dated 03.12.2024 8. vs. Princess Fatima Fouzia, (1979) 4 SCC 602 (iv) H.P. Krishna Reddy vs. Canara Bank, AIR 1985 Kant. 228 (v) M/s. Sathya Granites vs. New Mangalore Port Trust, Government of India and others , Writ Petition No. 7743/2021 dated 03.12.2024 8. Sri B.V. Gopal, learned counsel appearing on behalf of Sri Madhukar Deshpande, learned counsel for the respondent-Bank, submits that the liability in question arises out of a contractual obligation mutually agreed upon by the parties, and as such, the same is not amenable to judicial review under Article 226 of the Constitution of India. It is further submitted that the amount demanded represents an additional percentage of interest, treating the housing loan as a commercial loan, on account of the petitioner’s failure to commence construction and the resultant non-utilization of the loan amount for the purpose for which it was sanctioned. 9. Learned counsel further places reliance on the judgment of the Hon’ble Supreme Court in Union of India and Others v. Puna Hinda , (2021) 10 SCC 690 , as well as the order of this Court in Invest Karnataka Forum, Rep. by the Chief Executive Officer and Another v. M/s. BBP Studio Virtual Bharath Pvt. Ltd. and Another , Writ Appeal No.1095/2023 dated 14.06.2024, to contend that a writ petition is not maintainable in matters involving disputed questions of fact arising out of a contractual relationship between the parties. 10. Having considered the submissions of learned counsel for the parties, it is evident from the record that the petitioner applied for a loan from the respondent-Bank for the purchase of property to construct a residential house. The grant of the loan is not in dispute. The undisputed pleadings reveal that the loan amount was contractually disbursed to the vendor of the petitioner. The primary issue for consideration before this Court pertains to the levy and charging of an additional 2%interest/penalty. 11. It is evident from Annexure-B, the Arrangement Letter, that the loan was sanctioned for the purpose of purchasing the site and constructing a house. The parties have mutually agreed to the terms and conditions outlined therein. Annexure-I to the Arrangement Letter enumerates the specific conditions, one of which, relevant to the case at hand, is as under, "1. 11. It is evident from Annexure-B, the Arrangement Letter, that the loan was sanctioned for the purpose of purchasing the site and constructing a house. The parties have mutually agreed to the terms and conditions outlined therein. Annexure-I to the Arrangement Letter enumerates the specific conditions, one of which, relevant to the case at hand, is as under, "1. An undertaking should be furnished to the effect that the applicant would take up construction of residential property within a maximum period of 24 months from the date of disbursement. Otherwise, Bank shall be entitled to recover interest as applicable to commercial advances from the date of disbursement. 12. The petitioner contends that the condition for commencing the construction of the residential property within 24 months from the date of disbursement is contingent upon the furnishing of an undertaking to that effect. However, no such undertaking was provided by the petitioner. As a result, the respondent-Bank is seeking to recover interest over and above the agreed interest at the rate of 11% per annum. It appears that the respondent- Bank is attempting to enforce this condition. There is no dispute that the conditions agreed upon by the parties must be interpreted according to their plain text. Upon a plain reading of the condition, it is evident that the Bank is entitled to recover interest at commercial rates only if the construction is not completed within 24 months from the date of disbursement and if the borrower has furnished the required undertaking. In the present case, the respondent- Bank has not placed any such undertaking on record in compliance with the condition. In the absence of such compliance with the first part of the condition, it is impermissible for the Bank to apply the second part of the condition. Therefore, it cannot be held that the respondent-Bank is entitled to recover interest at commercial rates. In this regard, the demand made in the letter dated 12.02.2015 (Annexure-A) is beyond the terms agreed between the parties. 13. The loan availed by the petitioner was utilized for the purchase of a residential site, upon which the petitioner intended to construct a house. However, when the petitioner began proceeding with the construction, he was impleaded in RFA No.1001/2001. By order dated 07.04.2005, this Court directed the petitioner not to undertake any construction or alienate the property until further orders. The loan availed by the petitioner was utilized for the purchase of a residential site, upon which the petitioner intended to construct a house. However, when the petitioner began proceeding with the construction, he was impleaded in RFA No.1001/2001. By order dated 07.04.2005, this Court directed the petitioner not to undertake any construction or alienate the property until further orders. RFA No.1001/2001 was disposed of by this Court’s order dated 01.10.2009, dismissing the appeal and thereby confirming the validity of the sale deed executed in favour of the petitioner. The order in RFA No.1001/2001 was challenged by the petitioner in Special Leave Petition (Civil) No.31217/2009. The Hon’ble Supreme Court, by order dated 04.12.2009, directed that status quo be maintained between the parties. Subsequently, the petitioner filed objections to the interim relief granted and an application for vacation of the interim order, both of which were refused. The Hon’ble Supreme Court granted special leave and the appeal was numbered as Civil Appeal No.9546/2010. The petitioner then filed an application for early hearing in the matter. During the pendency of the appeal before the Hon'ble Supreme Court, the respondent-Bank demanded additional interest at the commercial rate, invoking the condition in the arrangement letter. The petitioner repeatedly explained the difficulties he faced in commencing construction due to the ongoing legal proceedings. Ultimately, the Hon'ble Supreme Court, by order dated 26.02.2011, decreed the suit and invalidated the gift deed, which, in turn, rendered the sale deed executed in favour of the petitioner invalid. 14. The series of events clearly indicate that there was no willful default on the part of the petitioner in carrying out the construction activity. The petitioner was prevented from commencing construction due to injunctive orders passed by the Courts. Therefore, it cannot be said that the delay in the commencement of construction was attributable to any intentional action or negligence on the part of the petitioner. On the contrary, the delay was due to the circumstances beyond the petitioner’s control. Even assuming that the parties had agreed to the payment of additional interest in the event that construction was not commenced within two years, the feasibility of performing such a condition must be considered by this Court. In light of the series of injunctive orders passed by this Court and the Hon’ble Supreme Court, the performance of this condition became not merely difficult but effectively impossible to comply with. In light of the series of injunctive orders passed by this Court and the Hon’ble Supreme Court, the performance of this condition became not merely difficult but effectively impossible to comply with. The impossibility of performance occurred subsequent to the agreement between the parties, and thus, the condition cannot be enforced in such circumstances. 15. As held by this Court in M/s. Sathya Granites vs. New Mangalore Port Trust and others , Writ Petition No. 7743/2021 , if a private enterprise is affected by conditions beyond its control, leading to the frustration of a contract over an extended period, it would neither be fair nor lawful to impose a penal fee or interest when the contract has become frustrated. In the present case, the demand made by the respondent-Bank, though purportedly based on a contractual obligation, is rendered arbitrary and illegal in light of the changed circumstances. The compliance with the contractual condition became impossible due to the subsequent injunctive orders. Therefore, the action of demanding additional interest is untenable and cannot be sustained. 16. The demand made by the respondent-Bank can be considered arbitrary for additional reasons. The petitioner borrowed a loan of Rs.1.50 Crore for the purpose of purchasing a site and constructing a house, with a fixed rate of interest at 11% and a floating rate of interest at 0.05%. However, by virtue of the order of the Hon'ble Supreme Court dated 26.02.2011 in Civil Appeal No.9546/2010, the sale deed in favour of the petitioner was annulled. Despite losing the property for which the loan was raised, the petitioner has consistently fulfilled his commitment to repay the loan to the respondent-Bank at the agreed rate of interest. In considering the petitioner’s request to refrain from levying or enforcing the additional interest of 2%, the respondent-Bank ought to have taken into account the petitioner’s fulfillment of his obligation to repay the loan without any default. The repayment of the loan reflects the petitioner’s bona fides in honoring the loan agreement, as well as his legitimate request to avoid the imposition of the 2% additional interest. The failure to consider this request and the continued demand for the additional 2% interest is not only unreasonable and unfair but also arbitrary. 17. Learned counsel for the respondent has vehemently contended that contractual obligations are not amenable to judicial review in a petition under Article 226 of the Constitution. The failure to consider this request and the continued demand for the additional 2% interest is not only unreasonable and unfair but also arbitrary. 17. Learned counsel for the respondent has vehemently contended that contractual obligations are not amenable to judicial review in a petition under Article 226 of the Constitution. There is no dispute with this proposition. It is well-established that the High Court must exercise restraint in entertaining writ petitions concerning purely contractual matters, especially when such matters involve disputed questions of fact. However, as held by the Hon'ble Supreme Court in M.P. Power Management Company Limited v. Sky Power Southeast Solar India Private Limited and Others, (2023) 2 SCC 703, judicial review is not barred merely because a dispute arises from a contract. If a party is able to establish that the action or inaction is arbitrary, judicial review may be available. The Hon'ble Supreme Court further held that, even in the context of a contractual agreement, a variety of circumstances may arise that justify judicial intervention, particularly where the aggrieved party seeks relief from the State in a writ petition. Certain disputes arising out of a contract, particularly where the aggrieved party claims that its obligations have not been fulfilled and the State’s contention is found to be a mere ruse or pretense, may warrant judicial scrutiny. Whether a writ petition is entertainable would depend upon the nature of the claim and the relief sought by the petitioner. 18. It has further been held that a constitutional remedy can be availed if the cause of action involves action or inaction that is palpably unreasonable, absolutely irrational, or completely devoid of any principled basis. An action that is entirely mala fide cannot be considered a fair action and, depending on the facts, may amount to arbitrary action, warranting judicial review. 19. Another exception recognized by the Hon'ble Supreme Court for entertaining a writ petition is that, once the Court has already entertained the matter, it is not impermissible for the Court to continue with the case at a later stage. Ordinarily, this would be a relevant consideration, which may persuade the Court to complete what it had commenced, provided it is otherwise a sound exercise of jurisdiction to decide the matter on its merits in the writ petition itself. 20. Ordinarily, this would be a relevant consideration, which may persuade the Court to complete what it had commenced, provided it is otherwise a sound exercise of jurisdiction to decide the matter on its merits in the writ petition itself. 20. If the grievance of the petitioner is examined by applying the underlying tests as articulated by the Hon'ble Supreme Court, the writ petition is maintainable and can be entertained for more than one reason. Firstly, the writ petition has been pending since 2015, and the petitioner has been protected by an interim order directing the respondent not to precipitate the matter. The petitioner has diligently pursued the writ petition for nearly ten years, and it would neither be appropriate nor justifiable to refuse to entertain the petition at this stage. Secondly, as noted earlier, although the petitioner lost the property due to the judgment of the Hon'ble Supreme Court, he has faithfully and honestly fulfilled his obligation by repaying the entire loan along with the applicable interest. Any default, if at all, in not commencing construction within two years was due to the injunctive orders that were beyond his control. Furthermore, the record shows that, at every stage of the litigation, the petitioner has made plausible attempts to either seek the vacation of the interim order or to expedite the final adjudication of the dispute. There is no evidence of intentional default on the petitioner’s part in commencing construction activity. Thirdly, the petitioner is not accused of diverting the borrowed funds for any other purpose or business activity that could indicate mala fides. It is on record that the respondent-Bank itself directly handed over the loan amount to the vendor of the petitioner. Fourthly, the imposition of additional interest is based on the terms and conditions of the arrangement letter at Annexure-B. As observed earlier, the Bank is entitled to recover interest applicable to commercial advances, but only if the petitioner executes an undertaking to complete the construction on the property within a maximum period of 24 months. As rightly contended by the petitioner, no such undertaking was furnished. In the absence of compliance with the first condition, the operation of the second condition is not permissible and cannot be enforced. 21. Upon an overall consideration of the aforementioned aspects, it is clear that the demand for additional interest, as reflected in Annexure-A, is arbitrary, unreasonable, and unsustainable. 22. In the absence of compliance with the first condition, the operation of the second condition is not permissible and cannot be enforced. 21. Upon an overall consideration of the aforementioned aspects, it is clear that the demand for additional interest, as reflected in Annexure-A, is arbitrary, unreasonable, and unsustainable. 22. In light of the above, the following, Order : (i) The writ petition is allowed-in-part. (ii) The letter/demand dated 12.02.2015 at Annexure-A is set aside to the extent as observed above. (iii) No order as to costs.