SEBASTIAN JOSEPH Vs. GOVERNOR RESERVE BANK OF INDIA

JUDGEMENT

(1.) Heard the learned Senior Counsel appearing for the petitioner and the learned counsel appearing for respondents 2 and 3.

(2.) The only question raised in this writ petition is whether the petitioner, who is the proprietor of a concern called "UNI-Q Marketing", is entitled to the benefit of waiver of foreclosure charges/pre-payment penalty in a floating rate term loan on the strength of the guidelines issued by the Reserve Bank of India. Exhibit P1 dated 31.10.2017 was issued on a complaint preferred by the petitioner stating that waiver of foreclosure chargers/pre-payment penalty is available only in respect of floating rate term loan availed by "natural persons" in their individual capacity and not as proprietors or partners of a firm. It is stated that where the loan is availed jointly with a co- obligant, all persons who are party to the loan, whether as borrower or co-obligant, shall be natural persons within their individual capacity.

(3.) The learned Senior Counsel appearing for the petitioner submits that the petitioner had availed working capital term loan from respondents 2 and 3. He was entitled to waiver of the pre-closure charges on the basis of the master circular issued by the Reserve Bank of India on June 30, 2014. The master circular, which was made available by the learned Senior Counsel and was not disputed by respondents 2 and 3, provided that all floating rate term loans sanctioned to individual borrowers will be eligible for waiver of foreclosure charges/pre-payment penalty. It is contended that the stand taken by the respondents that the petitioner is a proprietor of a concern and that he is not eligible for the benefit of the waiver is completely untenable.