Commercial interest charged under express loan-sanction terms is not liable to be quashed.

The petitioner challenged a debit of ₹9,14,476 and a further demand of ₹9,05,656 as commercial-rate interest on her home-loan account. She contended that the loan had been repaid and sought closure of the account, return of the original title deeds, and a no-dues certificate.

The bank maintained that the loan terms required construction on the financed plot within 36 months and permitted commercial-rate interest if construction was not completed within that period or the plot was sold before the loan was closed.

The petitioner filed the writ petition under Articles 226 and 227 of the Constitution.

1. Whether the bank was entitled to charge commercial-rate interest under the terms of the loan sanction.

2. Whether the petitioner was entitled to quashing of the interest demand and consequential directions for loan closure, return of title deeds, and a no-dues certificate.

The Court relied on the specific terms and conditions of the loan sanction, which provided for commercial-rate interest if the borrower failed to complete construction within 36 months and in specified circumstances involving early loan closure following sale of the plot.

The judgment did not cite any statute or precedent as the basis for its decision; it treated the sanction terms as governing the bank’s entitlement to charge the interest.

The Court noted that the petitioner had not established that the bank lacked entitlement to charge commercial-rate interest under the sanction terms.

It accepted that the bank had levied the interest in accordance with those terms. On that basis, the Court concluded that the reliefs sought—including relief concerning the resulting demand and loan closure—did not merit consideration.

Pending applications, if any, were also disposed of.