Non-compliance with stipulated conditions in a One Time Settlement leads to cancellation of OTS scheme, validating bank's actions under SARFAESI Act.

JUDGMENT :

Mohammed Nias C.P., J.

This original petition is filed with the following reliefs:-

i. Issue order, or Direction calling for the records leading up to Ext.-P14 from Respondent and to direct the Respondent to refund an amount of Rs.12,14,286.60 towards incentive as eligible as per Ext.-P4 along with the excess amount paid and to close the loan account, and to return all the title documents pertaining to immovable properties within a time frame;

ii. Issue such other and further Writ, Order, or Direction as this Hon’ble Court may deem fit to grant under the facts and circumstances of the case.

2. The petitioner had availed of a cash credit facility in 2006, which was enhanced later, after creating a security interest. As the petitioner defaulted in repayment of the amounts due to the bank, the accounts were classified as Non-Performing Assets on 28.08.2017. Action was initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘SARFAESI Act’). The petitioner had challenged the same by filing W.P. (C) No. 3445/2017, including for the grant of an instalment facility. In the writ appeal filed by the petitioner, the judgment itself was modified, directing the petitioner to pay the unserved interest portion remaining overdue for payment under the cash credit facility in two equal monthly instalments, and the bank was directed to consider the question of renewing the cash credit facility for further periods.

3. Alleging that the petitioner did not comply with the directions of this Court, the bank again proceeded under the SARFAESI Act, which resulted in the petitioner filing Securitisation Application No.251/2017, which was disposed of. Pending the said Securitisation Application, the petitioner has sought a one-time settlement facility from the bank, which was rejected. Thereafter, the petitioner had filed S.A. 216/2020, again challenging the actions of the bank, and during its pendency, the petitioner was served with Annexure-1, intimating him that he was eligible for a settlement under the SBI OTS 2020. The same was sanctioned on 25.11.2020 with the following conditions:

“Scheme for One Time Settlement of NPAs & AUCAS (SBI OTS 2020)

We refer to your letter No. dated for settlement of your dues to the Bank under the captioned scheme. We are pleased to advise that your application under the captioned scheme has been accepted by the appropriate authority.

1. OTS amount payable under the OTS Scheme will be Rs.22721872.02 Only.

2. Application money of Rs. 1150000.00 paid by you will be appropriated towards your OTS amount.

3. Another 10% of the OTS Amount will have to be deposited by you as first instalment within thirty days from the date of sanction of OTS failing which the OTS sanction will be rendered infructuous and OTS treated as failed.

4. Another 10% of the OTS Amount will have to be deposited by you as second instalment of money within sixty days from the date of sanction of OTS failing which the OTS sanction will be rendered infructuous and OTS treated as failed.

5. The balance amount can be paid within 8 months from the date of this letter, i.e. // (the validity period) together with interest @ 6 Months MCLR on reducing balance basis effective from the date of this letter, i.e. within, failing which the OTS sanction will be rendered infructuous.

6. However, no interest will be charged if the entire OTS amount is paid within 6 months from the date of this letter.

4. The petitioner contends that only the payment to be made under condition No.4 of Ext.P4 dated 25.11.2020 was not complied with on time, but the