FAIRMONT HOTEL PRIVATE LIMITED Vs. ASSISTANT GENERAL MANAGER MID CORPORATE GROUP STATE BANK OF INDIA CHENNAI

JUDGEMENT

(1.) THIS writ petition is to issue a writ of mandamus, directing respondents 1 to 4 to:

(2.) PETITIONER-Company is a pioneer in hotel development business and has been operating Radha Park Inn at Chennai with financial assistance from State Bank of India. Since, the petitioner-Company desired to expand their business, to set up another hotel at Bangalore they wanted to obtain financial assistance. Even though, the petitioner had offers from various banks and financial institutions, the petitioner preferred to approach State Bank of India due to its prior relationship. An Application for loan was made to the respondents-State Bank of India on 11.10.2004 seeking for financial assistance as per the following terms:

(3.) ACCORDING to the petitioner, the coercive act of respondents 1 to 4-bank is against the "Fair Practices Code" and inasmuch as the petitioner has not even availed the second loan, there is no question of compelling the petitioner to pay the processing fee of Rs. 10.35 lakhs. The petitioner by two notices dated 28.6.2005 and 13.10.2005 have protested against the collection of Rs. 4.47 lakhs towards pre-payment charges of the first loan and a sum of Rs. 10.35 lakhs towards service charges for processing the second term loan and had requested the bank to furnish statement of account showing as to how the sum of Rs. 4.47 lakhs has been arrived at. It was only on 21.7.2006, State Bank of India has sent a statement showing the calculation of pre-payment premium for the amount claimed in May 2004. State Bank of India has admitted the mistake in the calculation and has agreed to refund Rs. 21,400/- and according to the petitioner, the entire calculation is wrong, and the petitioner is entitled for refund of Rs. 3.43 lakhs in respect of the processing fee.