RAJ KUMAR KOHLI Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) The core grievance of the petitioners is that respondent No.2, which is a non-banking financial company, has imposed foreclosure charges qua its loan account without appreciating the fact that a proprietorship concern does not, in law, have an existence separate from its owner who is an individual.

(2.) The respondents resist the petition. RBI's stand as propounded by its counsel Mr. Ramesh Babu is that since the petitioners are carrying on business, via the proprietorship concern, the foreclosure charges will have to be imposed. The petitioners, on the other hand, contend that the proprietorship concern via which business is being run is an alter ego of petitioner no.1, i.e. an individual and hence is not a juridical entity separate from its owner. Given this position, petitioners submit that the Circular should apply to them.

(3.) Briefly, the background in which this writ petition has been filed is as follows: