- 1 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF APRIL, 2026 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 7247 OF 2026 (GM-DRT) BETWEEN: 1. SRI KISHORE BABU T S/O SRIRAMULU T., AGED ABOUT 50 YEARS, PERMANENT R/AT NO. 401, MALIBU PLAZA, GREEN GLEN LAYOUT, NEAR OM SHAKHTHI APARTMENT, BELLANDUR, BENGALURU SOUTH – 560 103, REPRESENTED BY POWER OF ATTORNEY HOLDER, SRIRAMULU T., S/O LATE VENKATASWAMY, AGED ABOUT 74 YEARS, 2. SRI. SRIRAMULU T S/O LATE VENKATASWAMY, AGED ABOUT 75 YEARS, R/AT NO.401, MALIBU PLAZA, GREEN GLEN LAYOUT, NEAR OM SHAKTHI APARTMENT, BELLENDUR, BENGALURU SOUTH – 560 103. …PETITIONERS (BY SRI. KALYAN R., ADVOCATE) AND: 1. THE BANK OF BARODA REGIONAL OFFICE, TRINITY CIRCLE, 4TH FLOOR, Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 VIJAYA TOWERS, 41/2, MAHATMA GANDHI ROAD, BENGALURU-560 001. REPRESENTED BY REGIONAL MANAGER. 2. THE BRANCH MANAGER, BANK OF BARODA, DOMALURU BRANCH HOUSE NO. 208, FIRST FLOOR, 5TH CROSS, 1ST MAIN, DOMALURU LAYOUT, BENGALURU – 560 071. 3. THE AUTHORISED OFFICER, BANK OF BARODA, DOMALURU BRANCH HOUSE NO. 208, FIRST FLOOR, 5TH CROSS, 1ST MAIN, DOMALURU LAYOUT, BENGALURU – 560 071. …RESPONDENTS (BY SRI. T P MUTHANNA.,ADVOCATE FOR R1 TO 3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO A) TO ISSUE A WRIT OF CERTIORARI OR ANY OTHER WRIT OR DIRECTION AND TO QUASH THE IMPUGNED COMMUNICATION / NOTICE DATED 12.02.2026 AND 17.02.2026 ISSUED BY THE 2ND AND 3RD RESPONDENT, AS PER ANNEXURE A, B, C, D, E AND F TO THE WRIT PETITION AND FURTHER DIRECT THE RESPONDENT BANK TO REFUND THE EXCESS AMOUNT OF INTEREST COLLECTED PURSUANT TO THE IMPUGNED NOTICE DATED 22/09/2025 AT ANNEXURE-N TO THE PETITIONER NO.1 OR IN THE ALTERNATIVE TO ADJUST SAME IN THE MONTHLY EMI'S AND B) TO PASS SUCH OTHER ORDER/S AS DEEMS FIT BY THIS HON'BLE COURT IN THE INTEREST OF JUSTICE AND EQUITY. THIS WRIT PETITION, COMING ON FOR DICTATING ORDER, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI - 3 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 ORAL ORDER The present writ petition is filed seeking the following prayer: "Wherefore, the petitioners humbly prays that this Hon’ble Court may be pleased to:- a) To issue a writ of certiorari or any other writ or direction and to quash the impugned communication/notice dated 12.02.2026 and 17.02.2026 issued by the 2nd and 3rd respondent, as per Annexure-a, b, c, d, e and f to the writ petition and further direct the respondent bank to refund the excess amount of interest collected pursuant to the impugned notice dated 22/09/2025 as per Annexure-N to the petitioner No.1 or in the alternative to adjust same in the monthly EMI's. b) To pass such other order/s as deems fit by this hon'ble court in the interest of justice and equity." 2. The facts of the case as stated in the writ petition are the petitioner has availed home loan of an amount of Rs.4.35 crores from the second respondent as per the sanction memo dated 29.07.2017. Out of that, a sum of Rs.2.10 crores was towards purchase of the site and a sum of Rs.2.25 crores was sanctioned towards the construction of residential building. Out of the total sanction amount of Rs.4.35 crores, respondent No.2 had - 4 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 disbursed a sum of Rs.1.90 crores towards purchase of the site and Rs.75.91 lakhs towards construction of ground plus 3 floors. Petitioner No.1 has purchased the property as per the registered sale deed dated 11.08.2017. The petitioner's name is mutated in the records also he had applied for the sanction of the building plan. Thereafter, after completing the construction, petitioner has let out the premises and also paid the property tax. Petitioner is having two loans with the respondent Bank and has been paying EMI regularly without any default from the date of sanction. On 22.09.2025, they received a notice from the bank stating that the construction is found to be in violation of the sanction terms and conditions by the internal audit and in view of the same, back dated differential rate of interest after charging commercial rate of interest from the financial year 2019-20 and the bank has retrospectively revised the rate of interest from housing loan to commercial rate of interest and asked the petitioner to pay an amount of Rs.86,87,297/- as current outstanding in the home loan account as on 22.09.2025 - 5 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 out of which to be Rs.57,34,731/- in one loan account and to be Rs.29,52,566/- in the other loan account and further re-schedule both the EMI’s. The respondent/bank unilaterally re-scheduled loan and called upon the petitioner to pay outstanding interest amount with retrospective date from 22.09.2025. After receiving the notice dated 22.09.2025 the petitioner has issued the reply that the site in question is in residential zone and the petitioner has put up construction of dwelling houses. 3. Petitioner being aggrieved by the order dated 22.09.2025 has filed the writ petition i.e., W.P.No.32636/2025 and initially an interim order was granted on 22.09.2025. Later the said writ petition came to be disposed of on 27.01.2026, whereby the court directed the bank that they can charge the commercial rate of interest after ascertaining all the material data. Subsequent to that the petitioner along with the copy of the order has given a representation on 11.02.2026. The respondents have passed the impugned proceedings dated 12.02.2026. Whereby it is stated that they are in receipt - 6 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 of the order from the High Court dated 27.01.2026 and on perusal of the order it has been observed that the High Court has clearly denied the prayer for quashing of the communication dated 22.09.2025, wherein the bank has communicated regarding application of commercial rate of interest from 22.07.2019 and it is informed that in the said letter dated 12.02.2026, bank has debited the differential amount between the applicable home loan interest and commercial rate of interest amounting to a total of Rs.87,47,566/-. In terms of the order passed by the High Court, they requested the petitioner to pay the amount and it is further stated that the court has not quashed the communication issued by them and not ordered to refund the amount collected pursuant to the notice dated 22.09.2025. 4. Learned counsel appearing for the petitioners submits that the letter dated 12.02.2026 is in violation of the orders passed by this Court. The respondents have not done any exercise as ordered by this court and according - 7 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 to the respondents the court has not quashed the proceedings, as such, as per the earlier order, the petitioner has to pay the amount and they are entitled for the commercial interest. It is submitted that this is contrary to the order passed in WP No.32636/2025 dated 27.01.2026. It is submitted that the impugned proceedings are liable to be set aside. 5. Learned counsel appearing for the respondent/Bank submits that in the earlier writ petitions, Court has not passed any order in favour of the petitioner. In fact, the court has upheld the commercial interest to be charged as per earlier proceedings issued by the bank. It is submitted that as the petitioner's account is declared as NPA, they issued a proceeding under Section 13(2) of the SARFAESI Act. It is submitted that as per the procedure invogue, the bank has charged the commercial interest and there are no grounds to interfere with the impugned procedure. It is submitted that, based on the documents, - 8 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 they have levied the commercial interest on the loan amount. 6. Having heard the learned counsels on either side, perused the material on record. Earlier when the respondents have levied the commercial interest as per the proceedings dated 22.09.2025, petitioner has filed WP No.32636/2025, which came to be disposed of by order dated 27.01.2026. It is appropriate to extract paragraph Nos.4 and 5 of the said order. “4. This Court, on perusal of the records, more specifically the declaration as aforesaid, is of the view that the petitioner cannot take any exception with the second respondent calling upon him to pay interest at the commercial rate of interest if he has utilised the loan extended for construction of a residential building (a home) to build a commercial construction. However, the second respondent cannot, relying upon the impugned Communication, assert that the petitioner will be liable to pay interest at the commercial rate of interest from the date of sanction ог disbursement because firstly, the Communication does not state that, secondly, the date of construction, the date of assessment for commercial purposes and the other details will have to be examined before there could be any demand. 5. As such, the petition stands disposed of observing that the second respondent will be entitled to charge commercial rate of interest - 9 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 from 22.09.2025, but if it has to charge rate of interest at that rate for any period of time from 22.09.2025, it must be only after ascertaining all the material data such as the above. It is needless to observe that if the petitioner has filed any application for pre-closure of the loan, the Bank will also consider the same accordingly.” 7. A bare perusal of the said order discloses that the Court has observed that the respondent Bank will be entitled to charge commercial rate of interest from 22.09.2025. But it can charge the commercial rate of interest for the period of time from 22.09.2025, only after ascertaining all the material data such as above. The impugned proceedings were issued on 12.02.2026 and 17.02.2026. The impugned proceedings does not disclose what is the exercise that is done by the bank pursuant to the order dated 27.01.2026. The documents or other things that the respondent bank is referring to, this Court cannot consider the same for the reason, when they have issued the impugned proceeding, the impugned proceedings should have a reference to the order and the exercise that is done pursuant to the order passed by the Court. In the considered opinion of the Court, the said - 10 - HC-KAR NC: 2026:KHC:19885 WP No. 7247 of 2026 exercise is not done by the Bank. If at all it had been done, the bank would have disclosed the exercise they did and the amount they arrived at, or the earlier amount that was arrived at by them, in the light of the order passed by the Co-ordinate Bench of this Court. In the considered opinion of this Court, the proceedings dated 12.02.2026 and 17.02.2026 cannot be sustained. Accordingly, this Court is passing the following: ORDER i. The impugned proceedings date 12.02.2026 and 17.02.2026 are set aside. ii. In consonance with the order passed by the Co-ordinate Bench of this Court dated 27.01.2026, the respondent Bank shall complete the exercise and shall take necessary action. iii. Accordingly, the writ petition is disposed of. iv. All pending I.As., in the writ petitions shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE PKNList No.: 1 Sl No.: 36