SMT RAJESHWARI K V vs THE CHIEF MANAGER
- Court
- Karnataka High Court
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HC-KAR
NC: 2026:KHC:59265
WP No. 7499 of 2024
CNR: KAHC010137252024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 8 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA
WRIT PETITION NO.7499 OF 2024 (GM-RES)
BETWEEN:
1. SMT. RAJESHWARI .K.V
W/O SRI SRIKANTA .K
AGED ABOUT 52 YEARS,
2. SRI SRIKANTA .K
S/O LATE SRI. N.C. KEMPAIAH,
AGED ABOUT 61 YEARS,
BOTH ARE R/AT NO.3/19,
RD
3 MAIN ROAD,
VIVEKANANDANAGAR,
RD
BANASHANKARI 3 STAGE,
BENGALURU – 560020.
…PETITIONERS
(BY SRI. PRADEEP KUMAR R.H., ADVOCATE)
AND:
THE CHIEF MANAGER,
BANK OF BARODA,
GANDHI BAZAR BRANCH,
NO.106, MAIN ROAD,
GANDHI BAZAR,
BENGALURU – 560004.
…RESPONDENT
(BY SRI. VIGNESH SHETTY, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT IN THE
NATURE OF CERTIORARI QUASHING THE IMPUGNED LETTER DATED
Digitally signed by
MAHALAKSHMI B M
Location: High Court
of Karnataka
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HC-KAR
NC: 2026:KHC:59265
WP No. 7499 of 2024
CNR: KAHC010137252024
20.02.2024 ISSUED BY THE RESPONDENT VIDE ANNEXURE-G
BEARING NO.BOB/ADV/2023-24/VJGABZ/06-566 AND ETC.,
THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’
GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MRS. JUSTICE K.S. HEMALEKHA
ORAL ORDER
1. The petitioners are impugning the communication dated
20.02.2024 issued by the respondent-bank whereby the petitioners
have been called upon to pay a sum of ` 17,43,906 towards
commercial interest on the housing loan for the period from
24.05.2018, the date of first disbursement, to 31.01.2024.
Petitioners have also sought a writ of mandamus directing
respondent-bank to consider representations dated 21.06.2023 and
28.02.2024 and permit closure of the housing loan account without
charging commercial rate of interest.
PREFATORY FACTS
2. The petitioners availed a housing loan from erstwhile Vijaya
Bank now merged with respondent-Bank of Baroda, for purchase of
residential site bearing No.86/A/1154/24 more fully described in the
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HC-KAR
NC: 2026:KHC:59265
WP No. 7499 of 2024
CNR: KAHC010137252024
schedule to the writ petition [ the scheduled property ] and for
construction of a residential building thereon.
3. It is the case of the petitioners that the respondent-bank after
verification of the relevant documents and obtaining a legal opinion,
sanctioned a composite housing loan of ` 1,00,00,000 comprising
` `
of 50,00,000 towards purchase of the scheduled property and
50,00,000 towards construction of a residential building thereon,
under the sanction memorandum dated 30.04.2018. However, only
` 50,00,000 towards purchase of the site was disbursed, whereas
the remaining ` 50,00,000 sanctioned towards construction was
not released.
4. Pursuant to the sanction of the loan, the petitioners
purchased the scheduled property from their vendors under a
registered sale deed dated 25.05.2018. On the same date, the
memorandum of deposit of title deeds was executed in favour of
the respondent-bank by way of security for the loan availed. The
petitioners contended that they have been regularly paying equated
monthly instalments [ EMIs ] without committing any default.
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HC-KAR
NC: 2026:KHC:59265
WP No. 7499 of 2024
CNR: KAHC010137252024
CONTENTIONS
5. The learned counsel for the petitioners would contend that
though the respondent-bank had sanctioned a composite housing
loan of ` 1,00,00,000, only ` 50,00,000 towards purchase of the
`
scheduled property was disbursed, whereas the remaining
50,00,000 sanctioned towards construction was never released. It
is contended that the petitioners could not undertake construction
on account of interference by Bangalore Development Authority,
which resulted in several litigations apart from the circumstances
arising out of COVID-19 pandemic and ill health. It is contended
that failure to undertake construction was attributable to
circumstances beyond the control of the petitioners and, therefore
the respondent-bank was not justified in demanding commercial
interest retrospectively from the date of first disbursement. Placing
reliance on Section 56 of the Indian Contract Act, 1872 [ the
Contract Act ], the learned counsel submits that the performance
of the contractual obligation had become impossible owing to
circumstances beyond the control of the petitioners. It is submitted
that despite representations being submitted requesting closure of
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HC-KAR
NC: 2026:KHC:59265
WP No. 7499 of 2024
CNR: KAHC010137252024
the loan account without charging commercial interest, the
respondent-bank has proceeded to issue the impugned demand.
Per contra
6. , the learned counsel appearing for respondent-
bank would contend that the loan was sanctioned subject to
specific terms and conditions contained in the sanction
memorandum dated 30.04.2018, which expressly stipulates that
construction of the residential building shall be completed within 36
months from the date of first disbursement of the loan towards the
purchase of site, failing which the bank would be entitled to charge
commercial rate of interest from the date of first release. It is
submitted that the petitioners, having availed the loan subject to the
aforesaid conditions, are bound by contractual obligations
undertaken by them.
Reasons and conclusion
7. It is not in dispute that the petitioners availed a housing loan
from the erstwhile Vijaya Bank now merged with respondent-bank
pursuant to the sanction memorandum dated 30.04.2018. The said
sanction memorandum contains specific terms and conditions
governing the utilization of the loan and completion of the
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WP No. 7499 of 2024
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construction. In particular clause No.2 under the heading “for
construction common condition” stipulates as follows :
“2. On plan sanction by the competent authority
construction of house on the site financed by the Bank
will have to be completed within overall period of 36
months reckoned from the date of first drawal of the
loan for purchase of site, otherwise Bank will charge
commercial rate of interest for the proposed loan from
the date of first release.”
8. A plain reading of the aforesaid condition makes it evident
that the parties had expressly agreed the period within which
construction was required to be completed and consequence of
failure to comply with the said condition. The sanction
memorandum specifically provides that in event of failure to
complete construction within 36 months from the date of first
drawal of the loan towards purchase of the site, the bank would
entitle to charge commercial rate of interest from the date of first
release. The said condition is also reiterated in the additional terms
and conditions of the sanction memorandum. Thus, the
circumstances under which this commercial rate of interest would
be charged have been expressly stipulated in the contract entered
into the between the parties.
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WP No. 7499 of 2024
CNR: KAHC010137252024
9. Insofar as the contention founded upon Section 56 of the
Contract Act is concerned, the petitioners seek to justify their
inability to undertake construction on the ground of pending
litigation involving the BDA, the COVID-19 pandemic and the other
circumstances beyond their control. Whether these circumstances
rendered performance of the contractual obligation impossible or
merely delayed its performance and whether Section 56 of the
Contract Act would have any application to the contractual
obligations undertaken by the petitioners, are the matters requiring
examination of the relevant facts, the nature of obligation and terms
of the agreement. Such disputed questions cannot appropriately be
adjudicated in the present proceedings under Article 226 of the
Constitution of India.
10. It is well settled that extraordinary jurisdiction under Article
226 of the Constitution of India is discretionary in nature. Where the
dispute essentially arises out of contractual obligations and its
resolution requires determination of disputed questions of fact, this
Court would ordinarily decline to entertain its writ jurisdiction,
particularly when the aggrieved party has recourse to an
appropriate forum. Though the existence of a contractual dispute
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NC: 2026:KHC:59265
WP No. 7499 of 2024
CNR: KAHC010137252024
does not, by itself, constitute an absolute bar to exercise writ
jurisdiction, the nature of controversy in the present case does not
warrant such exercise. In view of the foregoing reasons, this Court
finds no ground to entertain the writ petition.
11. However, liberty is reserved to the petitioners to approach
the appropriate forum for redressal of their grievance, including the
contention that the construction could not be undertaken on
account of circumstances beyond their control and the plea
founded under Section 56 of the Contract Act. Accordingly, the writ
dismissed
petition stands with the liberty as observed above.
Sd/-
____________________
JUSTICE K.S. HEMALEKHA
CKL
List No.: 1 Sl No.: 19