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.

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 amount/remaining amount dues as per the terms and condition prescribed in the paragraph no. 2 and 6 of the One Time Settlement dated 10/05/2023 (Annexure no. 7 to this writ petition), after deducting the deposited amount deposited by the petitioners within the period as fixed by this Hon’ble Court.

d. A writ order or direction in the nature of mandamus directing and commanding the respondent no. 4 to 6 not to interfere in peaceful possession of both the petitioners’ properties except in accordance with law.

e. A writ, order or direction in the nature of mandamus commanding and directing the respondent no. 4 to 6 do not take any coercive action against the property mortgaged by the petitioners.

f. A writ, order or direction in the nature of mandamus commanding and directed the respondent no. 4, to consider and passed appropriate order on the representation dated 04/11/2024 and 03/01/2025 submitted by the petitioner Company for compliance the terms and condition prescribed in the paragraph no. 2 and 6 of the One Time Settlement dated 10/05/2023 expeditiously within a suitable period as fixed by this Hon’ble Court (Annexure no. 15 and 17 to this writ petition)....”

2. The facts of the present case, as emerge from the pleadings of the parties, are as under:-

(a) The petitioners, a registered company, took a Cash Credit Limit of Rs.1,00,00,000/- and also Over Draft Facility of Rs.10,00,000/- as well as a Term Loan of Rs.2,80,000,00/- in the year 2017. On May 10, 2021, as the petitioners could not maintain payment of the loan accounts, due to financial constraint, the loan accounts were declared as non performing asset.

(b) On March 31, 2023, the petitioners deposited a sum of Rs.34,50,000/- and applied for the One Time Settlement, and thereafter, on May 10, 2023, the bank and the petitioners have entered into an agreement for One Time Settlement.

(c) On April 25, 2024, as the petitioners failed to comply with the OTS Scheme, the Bank rejected the OTS and further declared the account of the petitioners as a non performing asset. Thereafter, on October 8, 2024 auction notice was published. As per the petitioners, they have made several representations to the Bank but the Bank without considering the same, again issued auction notice dated October 22, 2024 under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

(d) The petitioners filed a writ petition bearing Writ-C No.36133 of 2024 before this Court which was disposed of on November 5, 2024 directing the petitioners to deposit 20% of the amount indicated in the notice under Section 13(2) of the Act and thereafter remaining amount was to be paid in three equal bimonthly installments.

(e) Thereafter, the guarantor namely Kali Charan Sharma approached