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IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
SHEKHAR B.SARAF, PRAVEEN KUMAR GIRI
Jaharveer Maharaj Agro Pvt. Ltd. – Appellant
Versus
Union Of India – Respondent
Shekhar B. Saraf, J.
1. This is a writ petition under Article 226 of the Constitution of India wherein the writ petitioners are aggrieved by the cancellation of the One Time Settlement that was offered by the Bank. The prayers in the writ petition are as follows:-
“a. A writ order or direction in the nature of certiorari call for the record and to quash the first One Time Settlement Cancelation Order dated 25/04/2024, second One Time Settlement Cancelation Order dated 10/05/2024, third One Time Settlement Cancelation Order dated 22/05/2024 and also Sale/Auction notice dated 16/12/2024 all are issued by the respondent no.4 (Annexure no. 1, 2, 3 and 4 to this writ petition).
b. A writ, order or direction in the nature of mandamus commanding and directed the respondent Bank not to proceeded further and also stay the entire proceeding initiated in pursuance of One Time Settlement Cancelation Orders dated 25/04/2024, 10/05/2024 and 22/05/2024 and Sale Notice for Sale of Immovable Properties dated 16/12/2024 till the disposal of the present writ petition.
c. A writ, order or direction in the nature of mandamus commanding and directing the respondent no. 6, to accept the entire balance amoun
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 can extend the time for repayment under an OTS scheme, considering the impact of external factors such as the COVID-19 pandemic and the borrower's efforts to raise funds for repayment.
Borrowers must comply with One Time Settlement terms to claim benefits; courts cannot interfere with banks' discretion in such matters.
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....
The High Courts have the jurisdiction to extend the period of settlement as originally provided for in OTS letter, subject to certain guidelines, and the Court may consider granting extension of time....
Point of Law : The terms of one-time settlement scheme cannot also be interfered with or varied to the advantage or disadvantage of any person by resorting to the powers under Article 226 of the Cons....
The court emphasized that the OTS scheme cannot be extended as a matter of right and must be exercised with discretion, considering the borrower's bonafide intent and substantial payments made.
The Court emphasized the Bank's obligation to act fairly and reasonably, and held that the refusal to grant an extension for OTS payment was arbitrary and violative of constitutional provisions.
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