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Kerala High Court
S.J. Eye Hospital vs State Bank Of India on 7 January, 2026
2026:KER:796
WP(C) No.2380 of 2017
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE HARISANKAR V. MENON
WEDNESDAY, THE 7TH DAY OF JANUARY 2026 / 17TH POUSHA, 1947
WP(C) NO. 2380 OF 2017
PETITIONERS:
1 S.J. EYE HOSPITAL
KARUKACHAL P.O, KOTTAYAM - 6865940. REPRESENTED
BY ITS PROPRIETOR, DR.SANTHOSH KUMAR.
2 DR. SANTHOSH KUMAR
S/O. M.R. SIVARAMA PANICKER, AGED 55 YEARS,
MAZHAVANCHERRIL HOUSE, KANGAZHA KARA, KANGAZHA
VILLAGE, KANJIRAPPARA P.O, (VIA) DEVAGIRI,
KOTTAYAM 686 555.
BY ADVS.
SHRI.SHYAM PADMAN (SR.)
SHRI.C.M.ANDREWS
SMT.BOBY M.SEKHAR
RESPONDENTS:
1 STATE BANK OF INDIA
KOTTAYAM BRANCH, K.K ROAD, KOTTAYAM-686 001
REPRESENTED BY ITS ASST.GENERAL MANAGER.
2 THE BANKING OMBUDSMAN
OFFICE OF THE BANKING OMBUDSMAN, RESERVE BANK OF
INDIA, BAKERY JUNCTION, THIRUVANANTHAPURAM - 695
033.
BY ADVS.
SRI.GEORGE THOMAS(MEVADA), SC, SBI
SRI.AMAL GEORGE
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 07.01.2026, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
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WP(C) No.2380 of 2017
2
JUDGMENT
The 1st petitioner is an eye care hospital, which is run
by the 2nd petitioner, who had obtained a loan from the 1 st
respondent Bank for the construction of a hospital building in
the year 2005. During 2009, there was an outstanding of
around Rs.48 lakhs towards interest. At the request of the
petitioner, the loan obtained was restructured by converting the
outstanding interest of around Rs.48 lakhs into a separate loan
account. A reference to Ext.P1 would show that the aforesaid
separate loan account so created did not visualise the
petitioners remitting any amount towards interest. It specifically
states that the rate of interest would be zero.
2. Later, during 2015, the petitioner decided to shift
the term loan obtained from the 1st respondent to another
financial institution, and a request was also made before the 1 st
respondent. In reply, the Bank informed the petitioner through
Ext.P3 about the outstanding payable by the petitioner, which
did not include any interest payable with respect to the
additional loan account created as above. However, when the
petitioner decided to transfer the loan account to the financial
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institution as proposed, the 1st respondent Bank informed the
petitioner that it had a liability to pay interest with respect to
the additional loan created under Ext.P1. This was intimated
through Ext.P5 communication dated 06.08.2015, informing
that the interest payable by the petitioner would be
Rs.9,77,873/-.
3. The petitioner remitted the aforesaid amount and
thereafter made a complaint before the Banking Ombudsman--
the 2nd respondent herein--as evidenced by Ext.P6. The 2 nd
respondent, in Ext.P7 hearing minutes, specifically recorded the
contention raised by the petitioner and also noticed that the
Bank had not included any clause reserving its right to claim
interest in Ext.P1, and so much so, the contention raised by the
petitioner required consideration. However, the Banking
Ombudsman found that this could only be an omission on the
part of the 1st respondent Bank and, therefore, directed the
Bank to send an apology letter, taking note of its misconduct.
4. On that basis, Ext.P8 letter was forwarded by the
Bank to the 2nd respondent herein, and an amount of
Rs.1,00,000/- was offered towards compensation, which the
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petitioner refused to accept. The 2 nd respondent ultimately
issued the order at Ext.P15, finding that the deficiency in
service, if any, was sought to be compensated by offering
Rs.1,00,000/-, which had been refused as noticed above, and
therefore, there was no further scope for interference in the
matter. Stating so, the complaint filed by the petitioner stood
rejected. It is seeking to challenge the aforesaid order that this
writ petition has been instituted.
5. I have heard Mrs. Laya Mary Joseph, the learned
counsel for the petitioner, as well as Sri. Amal George, the
learned Standing Counsel for the 1st respondent herein.
6. The short issue that arises for consideration in this
writ petition is with regard to the sustainability or otherwise of
the findings contained in Ext.P15 issued by the 2nd respondent
herein.
7. The facts are not in dispute. A reference to Ext.P1,
on the basis of which the fresh loan account against the
outstanding interest on the original term loan was created,
would show that the petitioners were not expected to remit any
interest on the loan so created. It was only when the petitioner
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sought to transfer the term loan to another financial institution
that the 1st respondent Bank raised a demand for interest,
contending that it had omitted to mention anything about
interest in Ext.P1. It is on that basis that the communication at
Ext.P5 was issued demanding an amount in excess of Rs.9.77
lakhs as interest from the petitioner.
8. The fact that there was no mention about interest
in any of the documents has also been noticed by the 2 nd
respondent Ombudsman in the hearing minutes at Ext.P7. But
that cannot be bypassed by issuing an apology letter and
offering an amount of Rs.1,00,000/- towards compensation and
thereafter demanding interest from the petitioner. The
approach of the Ombudsman in Ext.P15 that, since the
petitioner refused to accept Rs.1,00,000/-, the matter did not
require any further intervention, does not appear to be a
correct approach.
9. In the result, the writ petition stands allowed,
setting aside Ext.P15 and directing that the 1 st respondent Bank
shall not demand any interest from the petitioner. Any amount
paid by the petitioners towards interest on the basis of the
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communication at Ext.P5 shall be refunded to the petitioners as
expeditiously as possible, at any rate within a period of six
weeks from the date of receipt of a certified copy of this
judgment.
sd/-
sab HARISANKAR V. MENON
JUDGE
2026:KER:796
APPENDIX OF WP(C) NO. 2380 OF 2017
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE LETTER DATED
22.11.2010 ISSUED BY THE 1ST RESPONDENT
WITH REGARD TO THE TERM LOAN OF RS. 48
LAKHS.
EXHIBIT P2 TRUE COPY OF THE LETTER DATED
22.11.2010 ISSUED BY THE 1ST RESPONDENT
WITH REGARD TO THE TERM LOAN OF RS. 310
LAKHS.
EXHIBIT P3 TRUE COPY OF THE CERTIFICATE DATED
14.07.2015 ISSUED BY THE 1ST
RESPONDENT.
EXHIBIT P4 TRUE COPY OF THE REQUEST DATED
26.07.2015 SENT BY THE PETITIONER TO
THE 1ST RESPONDENT BANK.
EXHIBIT P5 TRUE COPY OF THE REPLY DATED 06.08.2015
ISSUED BY THE 1ST RESPONDENT.
EXHIBIT P6 TRUE COPY OF THE COMPLAINT NO. CTS
1977/15-16 FILED BY THE PETITIONER
BEFORE THE 2ND REPONDENT.
EXHIBIT P7 TRUE COPY OF THE MINUTES OF THE HEARING
OF COMPLAINT NO. CTS 1977/15-16 HELD ON
30.03.2016 BEFORE THE 2ND RESPONDENT.
EXHIBIT P8 TRUE COPY OF THE APOLOGY LETTER DATED
14.04.2016 ISSUED BY THE 1ST
RESPONDENT.
EXHIBIT P9 TRUE COPY OF THE LETTER DATED
20.04.2016 ISSUED BY THE 1ST RESPONDENT
BANK.
EXHIBIT P10 TRUE COPY OF THE ACCOUNT STATEMENT OF
THE 1ST PETITIONERS TERM LOAN A/C
NO.30319629457 HANDED OVER BY THE 1ST
RESPONDENT.
EXHIBIT P11 TRUE COPY OF THE LETTER DATED
09.05.2016 ISSUED BY THE 1ST RESPONDENT
THE BANKERS CHEQUE NO. 762538 DATED
09.05.2016 BEARING AN AMOUNT OF RS.
1,00,000/-
EXHIBIT P12 TRUE COPY OF THE BANKERS CHEQUE NO.
762538 DATED 09.05.2017 BEARING AN
AMOUNT OF RS. 1,00,000/-
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EXHIBIT P13 TRUE COPY OF THE LETTER SENT BY THE
PETITIONER DATED 17.05.2016 TO THE 1ST
RESPONDENT.
EXHIBIT P14 TRUE COPY OF THE LETTER SENT BY THE
PETITIONER DATED 17.05.2016 TO THE 2ND
RESPONDENT.
EXHIBIT P15 TRUE COPY OF THE COMMUNICATION DATED
08.06.2016 PASSED BY THE 2ND RESPONDENT
EXHIBIT P16 TRUE COPY OF THE MASTER CIRCULAR NO.
DBOD NO. BP.BC. 20/21.04.048/2008-09
DATED 01.07.2008 ISSUED BY THE RESERVE
BANK OF INDIA.
