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IN THE HIGH COURT OF KERALA AT ERNAKULAM
Amit Rawal, J, K. V. Jayakumar,J
Idukki District Police Co-Operative Society Ltd. – Appellant
Versus
Rasheed A.K., S/o Late Sri. Kochu Mohammad – Respondent
JUDGMENT :
K.V. JAYAKUMAR, J
This intra-court appeal is preferred against the judgment of the learned Single Bench in WP(C) No.26956/2024 dated 09.09.2024. The appellant herein is the Idukki District Police Co-operative Society Ltd., 7th respondent in the aforesaid writ petition.
2. The writ petitioner, Rasheed A. K., had availed four loans from the appellant, Idukki District Police Co-operative Society Ltd. and defaulted the repayment. The writ petitioner/1st respondent had claimed benefits under various One Time Settlement Schemes [for short, ‘OTS Schemes’] for clearing the outstanding loan amount. The last OTS Scheme announced was under Ext.P14 circular dated 07.06.2024. The request submitted by the writ petitioner/1st respondent was turned down by the Assistant Registrar of the Co-operative Society as per Ext.P20 communication. Thereafter, 1st respondent approached the writ Court claiming the following reliefs:
“(1) Issue a writ of certiorari and quash Exhibit P20 letter issued by the Assistant Registrar General, Idukki.
(ii) Declare that the petitioner is entitled to be considered for the benefits under Exhibit P14 Circular or Exhibit P10 to P13 Circulars as may be fixed by this Ho
A writ of mandamus cannot compel a financial institution to extend benefits of an expired One-Time Settlement Scheme if the borrower has previously defaulted on the contract terms.
Courts cannot compel banks to provide benefits of One Time Settlement Schemes if borrowers fail to meet payment obligations under the scheme, preserving the contractual sanctity and banks' discretion....
Borrowers must comply with One Time Settlement terms to claim benefits; courts cannot interfere with banks' discretion in such matters.
Borrowers cannot demand specific benefits under One Time Settlement schemes if they fail to properly engage in the process; such benefits are discretionary and not a right.
(1) No borrower can, as a matter of right, pray for grant of benefit of One Time Settlement Scheme.(2) No bank can be compelled to accept a lesser amount under OTS Scheme despite the fact that Bank i....
The main legal point established in the judgment is that the acceptance of OTS lies within the domain of the conscious decision of the bank and cannot be claimed as of right by the borrower. No writ ....
The bank has the exclusive discretion to determine a borrower's eligibility under an OTS Scheme, and the grant of benefit is subject to the eligibility criteria mentioned under the Scheme and the gui....
Parties cannot demand an extension of time for a One Time Settlement when they fail to comply within the specified period, as such OTS agreements are time-bound under their own terms.
The Court mandates that banking institutions must consider One Time Settlement applications under relevant schemes, ensuring compliance with procedural norms.
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