Writ jurisdiction cannot be invoked to adjudicate contractual interest disputes or allegations of commercial duress.

The Appellant, a timber import and trading company, transferred its credit facilities from Oriental Bank of Commerce to Respondent No. 2 (K.V. Bank) based on assurances of better loan terms

The Appellant later alleged that Respondent No. 2 arbitrarily revised interest rates and compelled the execution of revised sanction letters under commercial duress and threats of NPA classification

The Appellant filed complaints with the RBI Ombudsman, which were rejected on 23.09.2022 on the grounds that the rates were per signed sanction letters and the banking relationship was a commercial decision

The Appellant challenged this via a Writ Petition, which was dismissed by a learned Single Judge on 09.04.2026

The present Letters Patent Appeal (LPA) assails that dismissal

1. Whether a writ of mandamus can be issued to direct the RBI to cancel a bank's license over disputes arising from contractual interest rates and alleged commercial duress

2. Whether extraordinary writ jurisdiction is the appropriate forum for adjudicating claims of coercion or pressure in the execution of commercial loan documents

Banking Regulation Act, 1949, which governs the licensing and regulation of banking companies by the RBI

Disputes arising out of purely contractual and commercial relationships between a bank and a customer do not warrant the exercise of extraordinary writ jurisdiction under Article 226 of the Constitution of India

For grievances involving "coercion, threat or pressure" in document execution, the appropriate remedy lies in a civil suit for injunction or cancellation rather than a writ petition

The Court observed that the principal relief sought—cancellation of the bank’s license—was disproportionate to the grievance, which was essentially a private contractual dispute regarding interest rates

It noted that the Appellant had admittedly signed and accepted the sanction letters, making the interest charges a result of a voluntary commercial decision

On the allegations of "commercial duress" and arbitrary interest hikes, the Court reasoned that such factual determinations cannot be made in writ proceedings

The Court further noted that the Appellant had already pursued alternative remedies before Consumer Disputes Redressal Commissions for the same grievance, which supported the conclusion that writ jurisdiction was misplaced

The Court affirmed the Single Judge's order, stating that the Appellant’s remedy for alleged coercion lies in instituting appropriate civil proceedings as available under law

The Appeal and all pending applications were dismissed with no order as to costs