1. The challenge in this appeal is to the decision of the High Court who in exercise of its jurisdiction under Article 226 of the Constitution directed the appellants to disburse the loan to the respondent which she had asked for.
2. Briefly stated the facts appear to be that the respondent had applied to the bank for a loan. The loan was sanctioned by the bank subject to two conditions, namely, that the respondent should mortgage her land and secondly guarantee of a particular person should be furnished. As the guarantee was not furnished, the bank refused to disburse the loan.
3. The respondent chose to file a writ petition and the High Court observed that the bank cannot refuse loan merely on the ground that the guarantee had not been furnished.
4. The decision of the High Court is beyond comprehension. The proposed transaction between the parties was of a commercial nature. The terms and conditions for giving the loan were laid down by the appellants. If the terms do not suit the respondent, she was free not to accept the loan. The respondent could not in law insist on the terms on which the loan should be disbursed. Similarly the High Court had no jurisdiction either in law or in equity to direct the appellants to deviate from sound commercial and banking practice requiring the disbursal of a loan merely against the mortgage of land and when the bank thought it necessary to ask for a person to stand as a guarantee for repayment of loan in addition to the mortgage. The decision of the High Court was completely unsustainable and is, therefore, set aside.
5. The appeal is allowed, the effect of which would be that the writ petition filed by the respondent before the High Court stands dismissed.