The High Court cannot mandate a bank to grant One Time Settlement benefits not compliant with established terms or after scheme expiration.

JUDGMENT

Anil K. Narendran, J.

The appellant-petitioner filed W.P.(C)No.34771 of 2025 invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P6 proceedings dated 09.06.2025 of the 1^st respondent Kerala State Co-operative Bank, Perumbavoor Branch, whereby, his request in Ext.P1 representation dated 25.11.2024 for One Time Settlement stands rejected, as the said proceedings is null and void; a writ of mandamus commanding the 1^st respondent to dispose of Ext.P1 representation dated 25.11.2024 made by the petitioner for One Time Settlement of the loan account, within a reasonable time, as fixed by this Court, as per the scheme envisaged in Ext.P7 Navakeraleeyam One Time Settlement Scheme for clearing the arrears in loan accounts in Primary Co- operative Societies/Co-operative Banks under the jurisdiction of the Registrar of Co-operative Societies, or such other One Time Settlement scheme; and a declaration that the petitioner is entitled for the benefit of the One Time Settlement Scheme, as envisaged in Ext.P7.

2. The appellant-petitioner, who availed a cash credit facility for Rs.30 lakhs in the year 2018 from Ernakulam District Co-operative Bank (presently Kerala State Co-operative Bank), defaulted repayment, which had resulted in the loan account being classified as Non-Performing Asset (NPA), in the year 2020 and initiation of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Section 13 (4) notice was issued on 16.02.2022. In M.C.No.792 of 2024 filed by the Bank before the Chief Judicial Magistrate, Ernakulam, invoking the provisions under Section 14 of the SARFAESI Act, an Advocate Commissioner was appointed.

3. The appellant-petitioner had earlier approached this Court in W.P.(C)No.41213 of 2024, seeking consideration of Ext.P1 representation dated 25.11.2024 for one time settlement. That writ petition was disposed of by Ext.P2 judgment dated 21.11.2024, whereby the Bank was directed to consider the proposal, as per the existing norms. Thereafter, the petitioner filed W.P.(C)No.16420 of 2025, again for consideration of Ext.P1 representation and for other consequential reliefs. That writ petition was dismissed by Ext.P5 judgment dated 08.09.2025. Paragraphs 5, 6 and also the last paragraph of that judgment read thus;

"5. This Court exercises very limited jurisdiction in matters arising under the SARFAESI Act, as repeatedly held by the Honourable Supreme Court in several judgments, including inSouth Indian Bank Ltd. and Ors. v. Naveen Mathew Philip and Ors. [2023 17 SCC 311] that the powers conferred under Article 226 of the Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal. When this Court is approached with a prayer to permit the borrowers to clear the liability in instalments, the borrowers must prove bona fides. The non- compliance of the interim order indicates that the petitioner in this case has not shown any bona fides to enable this Court to permit him to clear the liability in instalments.

6. Therefore, I find no reason to grant the reliefs sought for in this writ petition, and the same will stand dismissed without prejudice to the right of the petitioner to challenge the measures taken by the secured creditor as provided under the SARFAESI Act, if so advised.

The writ petition is dismissed as above."

It is, thereafter, that the Bank considered the proposal made by the petitioner in Ext.P1 representation dated 25.11.2024, as evident from Ext.P6 proceedings dated 09.06.2025. As can be seen from Ext.P6