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ORISSA HIGH COURT
M/S IPINIT VANASPATI LTD. CUTTACK – Appellant
Versus
THE PRINCIPAL SECY. MSME DEPT. AND CHAIRMAN OSFC BBSR – Respondent
JUDGMENT :
KRISHNA S. DIXIT, J.
The tone of this judgment can be set by quoting what Richard Brinsley Sheridan, an Irish dramatist of 18th century had said when asked to pay his dues:
“It is not my interest to pay the principal, nor my principle to pay the interest”
These two petitions by the borrower, in essence seek to lay a challenge to the demand and recovery of a huge sums of money in crore of rupees, lent by the Orissa State Financial Corporation under the provisions of the State Financial Corporations Act 1951.
i. In W.P.(C) No.4296 of 2024, the prayer column runs as under:
“(a) Quash the impugned letter dated 24.01.2024 as under Annexure-15;
(b) Direct the Opp. Party - Corporation to carry out a joint verification to assess the damage cause to the seized unit of the petitioner,
(c) Direct the Opp. Party - corporation to adjust /factor in the loss caused to the petitioner due to the damage in the seized unit, as against the principal amount and thereafter re-calculate the outstanding dues of the petitioner;
(d) Direct the opp. Party - corporation to allow the petitioner to submit a fresh OTS proposal on the basis of the re-calculate dues as mentioned in (c) above;”
ii. In W.P.(C) No.
A borrower must fulfill debt obligations despite financial hardship; equitable relief is not warranted without demonstrable legal rights.
Borrowers cannot abuse legal processes to avoid repayment, as courts will not grant relief without a justiciable right, especially in public interest matters.
Debt Recovery and Monetary Laws - Bank - Loan - Mortgaged properties - Where public money is involved, a Writ Court has to assume a realistic role of a trustee in ensuring that public money is not lo....
OTS scheme is non-discriminatory and ncn- discretionary. Once the Scheme is in place, a borrower or guarantor is entitled to the benefit of the Scheme
Point of law: Loans by financial institutions are granted from public money generated at the taxpayer’s expense. Such loan does not become the property of the person taking the loan, but retains its ....
Banks are not mandated to disclose benchmarks or consider OTS proposals, and courts cannot compel alteration of existing financial agreements under Article 226.
(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....
A bank cannot proceed with auction proceedings after issuing a one-time settlement proposal unless it has revoked the proposal and the acceptance period has expired.
The duty of a litigant to disclose all material facts and the bank's right to protect its recovery were the central legal points established in the judgment.
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