Writ Court Cannot Examine Transactions Between Bank & Borrower As They Are Essentially Contractual In Nature: Karnataka High Court

The Karnataka High Court has said that writ courts neither have means nor the expertise to re-evaluate the "prudential decisions" of the Banks that are made in the ordinary course of their commercial transactions with accumulated wisdom in the trade. Further it said, "Credit facilities have been recalled at once reveals that the transaction has the overtones of commercial elements; despite vociferous submissions made on behalf of the petitioner, sufficient public law elements warranting invocation of writ jurisdiction are not demonstrated." The bench said, "There was a duty owed by the petitioner to the respondent-Bank to disclose about the notice of termination of lease when it had first applied for a huge loan furnishing the said lease deed as one of the securities for repayment; it also owed the duty to disclose this when it was availing the said additional credit facility when already there was an arbitral award. Case Title: M/S NITESH RESIDENCY HOTELS PVT.LTD v. UNION OF INDIA & Others Case NO: WRIT PETITION NO.2004 OF 2022 Citation: 2022 LiveLaw 318 Date of Order: 8TH DAY OF AUGUST, 2022 Appearance: Senior Advocate K SUMAN,for Advocate SIDDHARTH SUMAN for petitioner; ASG H SHANTHI BHUSHAN, for R1; Senior Advocate DHYAN CHINNAPPA, a/w Advocate RITHIKA RAVIKUMAR, for R3 Click Here To Read/Download Order