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SUPREME COURT OF INDIA
M.R. SHAH, KRISHNA MURARI, JJ.
State Bank of India – Appellant
Versus
Arvindra Electronics Pvt. Ltd. – Respondent
Civil Appeal No. 6954 of 2022
Decided On : 04-11-2022
Constitution of India - Article 226 - Contract Act, 1872 - Section 62 - Recovery of debt - OTS Scheme - No borrower can, as a matter of right, pray for grant of benefit of onetime settlement scheme - No writ of mandamus can be issued by High Court in exercise of Article 226 of Constitution of India, directing financial institution/bank to positively grant benefit of OTS to a borrower - Grant of benefit of OTS Scheme is subject to eligibility criteria and guidelines issued from time to time - Bank mutually can agree to extend time which is permissible under Section 62 of Contract Act - Borrower as a matter of right cannot claim that though it has not made payment as per sanctioned OTS Scheme still it be granted further extension as a matter of right - There cannot be any negative discrimination claimed - Borrower has to establish any right in their favour to claim extension as a matter of right - Impugned judgment and order passed by High Court granting further time to respondent-borrower to make balance payment under OTS Scheme in exercise of powers under Article 226 of Constitution of India is unsustainable and accordingly quashed and set aside. (Paras 6.4, 7 and 8)
Facts of the Case:
Short question which is posed for consideration of this Court is whether in the facts and circumstances of the case the High Court is justified in extending the period to make the payment of balance amount under sanctioned OTS Scheme beyond the time granted under sanctioned OTS Scheme, while exercising the powers under Article 226 of the Constitution of India?
Findings of Court:
In the sanctioned letter dated 21.11.2017 it was specifically mentioned in Clause (iv) that the entire payment under the OTS Scheme was to be made by 21.05.2018, otherwise OTS would be rendered infructuous. Therefore, borrowers were bound to make the payment as per the sanctioned OTS Scheme. Therefore, the High Court ought not to have granted further extension de hors the sanctioned OTS Scheme while exercising the powers under Article 226 of the Constitution of India.
Result: Appeal allowed.
JUDGMENT :
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 10.03.2022 passed by the High Court of Punjab and Haryana at Chandigarh in CWP No. 12953 of 2018 by which in exercise of powers under Article 226 of the Constitution of India the High Court has granted further six weeks’ time to the original writ petitioner to make the payment of balance amount (Rs. 2.02 crores with interest) as per the sanctioned letter of OTS dated 21.09.2017, the State Bank of India has preferred the present appeal.
2. The facts leading to the present appeal in a nutshell are as under:
2.1 That the State Bank of India (hereinafter referred to as ‘the Bank’) sanctioned a cash credit in favour of the respondent Arvindra Electronics Private Ltd. (hereinafter referred to as ‘Borrower’). In 2012, the account of the borrower was classified as NPA in 2015. The Bank came out with one time settlement (hereinafter referred to as ‘OTS Scheme’) dated 01.09.2017. OTS specifically provided for making payment as settled under the OTS scheme within six months from the date of sanction, else infructuous. The Bank sent OTS offer to the borrower for OTS and ledger outstanding as on 31.03.2017 was Rs. 13,99,89,273.99. The amount payable under the OTS was Rs. 10,53,75,069.74. The borrower accepted the OTS offer and deposited an amount of Rs. 1.40 crores with the Bank on 31.10.2017.
2.2 The Bank sanctioned OTS and confirmed receipt of Rs. 1.40 crores. Under the sanctioned OTS the borrower was required to deposit 25% of the OTS amount by 21.12.2017 and the balance amount to be deposited within six months from the date of letter upto 21.05.2018 with interest. The borrower was also informed that on nonpayment of the aforesaid amount within the time stipulated under the OTS, the OTS will be rendered infructuous. The borrower deposited amounts of Rs. 4,51,45,000/- on 31.12.2017/ 21.05.2018. The borrower agreed/committed to pay Rs. 3.50 crores on 21.05.2018 and requested extension of 8 to 9 months for repayment of the balance amount of Rs. 2.50 crores. The bank declined extension of 9 months and directed the borrower to make the payment of 2.52 crores by 21.05.2018. Feeling aggrieved the borrower filed the writ petition before the High Court for extension of 8 to 9 months to pay the outstanding amount of Rs. 2.52 crores beyond 21.05.2018.
2.3 That thereafter the Bank floated another OTS Scheme for settlement of outstanding payment of Rs. 9,48,39,614/- for an amount of Rs. 4,48,79,711/-. However, the borrower did not opt for the said scheme. That thereafter one another OTS Scheme was floated by the Bank in the year 2019 and the Bank made an offer to the borrower to settle the account for an amount of Rs. 4,11,13,953/- against outstanding amount of Rs. 5,98,39,614/-. The borrower again did not opt for the scheme. Even one another OTS Scheme was floated which was offered to the borrower and the borrower did not opt for the scheme. Vide communication dated 24.02.2021 the bank rejected the OTS offer of Rs. 2.05 crores as according to the Bank amount due by the borrower was Rs. 23.54 crores. By the impugned judgment and order the High Court has set aside the communication dated 24.02.2021 rejecting the OTS offer of Rs. 2.05 crores made by the borrower and has granted further six weeks’ time from the impugned judgment and order passed by the High Court to the borrower to make the payment of Rs. 2.02 crores with interest as per the OTS sanctioned letter dated 21.09.2017.
2.4 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court granting further six weeks’ time to the borrower to make the payment of balance amount under the OTS Scheme, the Bank has preferred the present appeal.
3. Shri Sanjay Kapur, learned counsel appearing on behalf of the Bank has vehemently submitted that the High Court has committed a very serious error in granting further six weeks’ time to the borrower to make the payment of bala
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