ORDER: SUNIL BENIWAL, J. 1. This writ petition has been filed by the petitioners with the following prayer :- “It is, therefore, most humbly and respectfully prayed that the instant writ petition may kindly be allowed and the impugned award dated 16.01.2024 (Annexure-4) passed by the learned Permanent Lok Adalat, Bikaner (Rajasthan), in Application no.123/2022 may kindly be quashed and set- aside and the application filed by the applicant/respondent under section 22(C)(1) of The Legal Services Authorities Act, 1987 (Annexure-2) may kindly be rejected as such. Any other appropriate order which this Hon’ble Court deems proper and just in favour of the petitioner may kindly be passed.” 2. The facts, in nutshell, as narrated in the present writ petition, are that the petitioner-Bank herein provided loan amounting to Rs.60 lacs on 31.01.2019 to the respondent. An application was submitted by the respondent for foreclosure of the loan account. The respondent repaid the entire loan amount, however, since the payment was made prior to the stipulated timeline, the petitioner-Bank levied pre-payment charges including interest and penalties. Being aggrieved by the pre-payment charges amounting to Rs.2,09,543/-, the respondent filed a claim petition before the learned Permanent Lok Adalat seeking refund of the amount, which has been charged by the petitioner-Bank upon pre-payment of the loan. The said claim petition was allowed vide award dated 16.01.2024. 2.1 Being aggrieved by the award dated 16.01.2024, the petitioners preferred the present writ petition. 3. Learned counsel appearing for the petitioner-Bank submitted that the Permanent Lok Adalat has passed the impugned award and accepted the claim of the respondent in violation of the circular dated 02.08.2019 (Annex.6) bearing No.DBR Dir. BC. No.08/13/03/00/2019-20. While elaborating his submissions, learned counsel for the petitioners submitted that the said circular has been issued in furtherance of the earlier circular, whereby it was prohibited to charge foreclosure charges / pre-payment penalties on home loans / all floating rate term loans sanctioned to individual borrowers. 3.1 It is submitted that the business loans are excluded from the purview of the above circular and therefore, the bank has rightly levied foreclosure charges and pre-payment penalties. The respondent took credit facilities for the purpose of business, hence, no relaxation could be granted for pre-payment charges. The Permanent Lok Adalat has given an incorrect interpretation of the said circular. The respondent took credit facilities for the purpose of business, hence, no relaxation could be granted for pre-payment charges. The Permanent Lok Adalat has given an incorrect interpretation of the said circular. 3.2 It is further submitted that the petitioner-bank charged foreclosure charges / pre-payment penalties, which is a part of the sanction letter. The respondent has voluntarily accepted the terms of the credit facility and he had acquiesced to the pre-deposit penalties / charges while depositing the due amount prematurely. The sanction letter was signed by the respondent and therefore, he is bound to abide by the terms and conditions of the sanction letter. 3.3 Based on the above submissions, it is contended that the present writ petition is required to be allowed and the award passed by the Permanent Lok Adalat is required to be quashed and set-aside. 4. Per contra, learned counsel for the respondent submitted that the loan was obtained in the month of January, 2019 and soon after the business was started, the pandemic COVID-19 came and created an unprecedented situation, which resulted in huge financial loss and forced the respondent to take immediate action to discontinue the bank facility and repay the entire loan amount so as to protect himself from further financial losses. In these compelling circumstances, the respondent took a decision to repay the loan. It is submitted that an e-mail dated 22.10.2021 was sent, wherein it was specifically conveyed that the amount is being deposited under protest. It is argued that though there is a condition in the sanction letter, however, the Permanent Lok Adalat has allowed the claim considering the peculiar facts and circumstances of the case, wherein the loan was paid prior to the due date and considering the fact that the amount was deposited under protest and therefore, the Bank should either have refused to accept such deposit and if they have accepted despite the protest of the respondent, then the Bank is required to refund the amount, which has been charged towards foreclosure charges /pre-payment penalties etc. 5. Heard learned counsel for the parties and perused the material available on record. 6. From a perusal of the record, it is revealed that the loan was repaid prior to the actual date of payment which has attracted foreclosure charges / pre-payment penalties upon the respondent. 5. Heard learned counsel for the parties and perused the material available on record. 6. From a perusal of the record, it is revealed that the loan was repaid prior to the actual date of payment which has attracted foreclosure charges / pre-payment penalties upon the respondent. The fact that the loan was obtained for business purposes is not disputed by the respondent. The only issue which is required to be considered is as to whether the learned PLA has passed the impugned order appreciating the correct position of law. 7. Before proceeding further, it would be apposite to refer the relevant circulars published by Reserve Bank of India in connection with charging foreclosure charges/pre-payment penalties, which are reproduced as under: Circular (DBOD. No. Dir. BC.107/13.03.00/2011-12) dated 05.06.2012 reads as under: “Please refer to our circular DBOD. No. Dir. BC. 56/13.03.00/2006-2007 dated February 2, 2007 on reasonableness of bank charges. 2. In this context, attention is invited to paragraphs 81 to 83 of the Monetary Policy Statement 2012-13 announced on April 17, 2012 with regard to home loans on floating interest rates. The Committee on Customer Service in Banks (Chairman: M. Damodaran) had observed that foreclosure charges levied by banks on prepayment of home loans are resented upon by home loan borrowers across the board especially since banks were found to be hesitant in passing on the benefits of lower interest rates to the existing borrowers in a falling interest rate scenario. As such, foreclosure charges are seen as a restrictive practice deterring the borrowers from switching over to cheaper available source. 3. The removal of foreclosure charges/prepayment penalty on home loans will lead to reduction in the discrimination between existing and new borrowers and competition among banks will result in finer pricing of the floating rate home loans. Though many banks have in the recent past voluntarily abolished pre-payment penalties on floating rate home loans, there is a need to ensure uniformity across the banking system. It has, therefore, been decided that banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis, with immediate effect.” Circular (DBOD. Dir.BC.No.110/13.03.00/2013-14) dated 07.05.2014 reads as under: “Please refer to our circular DBOD. No. Dir.BC.107/13.03.00/2011-12 dated June 5, 2012 on ‘Home Loans- Levy of Fore-closure Charges/ Pre-payment Penalty’. 2. It has, therefore, been decided that banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis, with immediate effect.” Circular (DBOD. Dir.BC.No.110/13.03.00/2013-14) dated 07.05.2014 reads as under: “Please refer to our circular DBOD. No. Dir.BC.107/13.03.00/2011-12 dated June 5, 2012 on ‘Home Loans- Levy of Fore-closure Charges/ Pre-payment Penalty’. 2. A reference is invited to Part B of the First Bi-monthly Monetary Policy Statement 2014-15 announced on April 1, 2014 proposing certain measures for consumer protection. It was indicated that in the interest of their consumers, banks should consider allowing their borrowers the possibility of prepaying floating rate term loans without any penalty. Accordingly, it is advised that banks will not be permitted to charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.” Circular (DBR. Dir.BC.No.08/13.03.00/2019-20) dated 02.08 .2019 “Please refer to our circulars DBOD. No.Dir.BC.107/13.03.00/2011-12 dated June 5, 2012 and DBOD.Dir.BC.No.110/13.03.00/2013-14 dated May 7, 2014, in terms of which banks are not permitted to charge foreclosure charges / pre-payment penalties on home loans / all floating rate term loans sanctioned to individual borrowers. 2. In this connection, it is clarified that banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned, for purposes other than business to individual borrowers with or without co-obligant(s).” 8. A bare perusal of the above circulars reflects that loan/credit facility provided for purpose of business is not included within their ambit. Meaning thereby, if a loan, availed for the purpose of business, is paid back prior to its due date then, the borrower is not exempted from the purview of foreclosure charges immaterial of the borrower being an individual or a venture. 9. In the present case, it is undisputed that the loan/credit facility was availed for purpose of business hence, its premature repayment would not attract the directions issued by the RBI vide the afore-quoted circulars providing exemption from foreclosure charges/ pre-payment penalties. Therefore, the petitioner-bank has rightly charged the same. 10. 9. In the present case, it is undisputed that the loan/credit facility was availed for purpose of business hence, its premature repayment would not attract the directions issued by the RBI vide the afore-quoted circulars providing exemption from foreclosure charges/ pre-payment penalties. Therefore, the petitioner-bank has rightly charged the same. 10. This Court also takes note of the fact that in the sanction letter dated 28.11.2019, the condition in the column titled ‘Prepayment/ Foreclosure Charges’ stipulates as under: “The facility shall attract prepayment charge on the facility limits granted to the borrower in the event of: Repayment by the borrower to the bank of any amount ahead of previously agreed repayment schedule or tenor or terms of dates of repayment or renewal as contained in the sanction letter. The prepayment/foreclosure charges would be at the rate of 5.00% if amount paid before 12 months, 3.00% if amount paid after 12 months plus applicable Goods & Service Tax on the facility limit granted/outstanding amount/ balance drawing power.” 10.1 The condition mentioned in sanction letter unambiguously provides for imposition of foreclosure/pre-payment charges therefore, it cannot be denied that this condition was not communicated to the respondent at time of availing the credit facility. The respondent was very well aware of the stipulated condition and has voluntarily entered into the arrangement with the petitioner-bank. Thus, at a later stage it could not take a u- turn by denying to accept the condition encompassed in the sanction letter. 11. Learned PLA has relied upon email sent by the respondent to conclude that the foreclosure/pre-payment charges were paid under protest. This Court is of the opinion that payment of charges under protest does not give a right to the respondent to seek refund of the same on the count that it did not agree to imposition of such foreclosure/pre-payment charges. Moreover, the petitioner-bank never accepted the request of the respondent depositing the charges under protest. Therefore, this Court is of the view that the bank was justified in charging foreclosure charges/pre-payment penalties upon premature settlement of loan. 12. This Court cannot lose sight of the fact the parties entered into an arrangement and are bound by its conditions, specifically the sanction letter which was very well in knowledge of the respondent. Therefore, this Court is of the opinion that learned PLA has erred in passing the impugned award while directing refund of the foreclosure/pre-payment charges. 12. This Court cannot lose sight of the fact the parties entered into an arrangement and are bound by its conditions, specifically the sanction letter which was very well in knowledge of the respondent. Therefore, this Court is of the opinion that learned PLA has erred in passing the impugned award while directing refund of the foreclosure/pre-payment charges. 13. In view of the discussion made above, the impugned award dated 16.01.2024 (Annexure-4) passed by the Permanent Lok Adalat is quashed and set aside. Accordingly, the present writ petition is allowed. 14. All pending application (s), if any, shall also stand disposed of.