A bank has a legal right to exercise a lien on the savings account of a surety for a loan, and the court cannot mandate a modification of the terms or timelines of a One Time Settlement scheme sanctioned under an existing policy.

JUDGMENT

Petitioner’s husband availed a loan from the 1^st respondent bank. The petitioner is a surety for the said loan transaction. The petitioner has approached this Court being aggrieved by the fact that her Savings Bank Account with the 1^st respondent bank is not permitted to be operated despite the fact that there is a credit of a sum of Rs.11,50,000/- in the said account. The petitioner also prays that the 1^st respondent bank be directed to offer a more reasonable One Time Settlement.

2. A perusal of the pleadings in the writ petition will indicate that the loan account was permitted to be settled under the നവ കേ(cid:4)രളീയം കുടിശ്ശി(cid:4) നിവാരണ പദ്ധതി, for a sum of Rs.41,00,000/- (Rupees Forty one lakhs only) through Exhibit P2 communication dated 19.11.2025. A perusal of Exhibit P2 indicates that the loan account was permitted to be settled by grating a waiver of Rs.27,05,415.49. As per Exhibit P2, the borrower was required to pay the amount in two instalments, namely a sum of Rs.5,00,000/- on 29.11.2025 and the balance amount on 30.12.2025. There is also another prayer in this writ petition for a direction to the respondent bank to permit the petitioner to settle the loan liability in six month’s time.

3. When this matter came up for consideration on

16.03.2026, this court passed the following interim order:-

‘’There will be an interim stay of confirmation of the sale on condition that the petitioner remits an amount of Rs.10,00,000/- (Rupees ten lakhs only) within one month from today.

2. It is made clear that if the above payment is not made, the respondents will be free to proceed further in accordance with law. Post on 21.05.2026.’’

4. Learned counsel appearing for the respondent bank submits that the petitioner has not paid the amount directed to be paid in terms of the interim order dated 16.03.2026. 5. Having considered the facts and circumstances of the case and the reliefs sought for in this writ petition, I am of the view that the petitioner is not entitled to any of the reliefs sought for. The petitioner is not entitled to an order directing the respondent bank to permit the petitioner to operate her Savings Bank Account. It is admitted by the petitioner that she is a surety for the loan availed by her husband. It is open to 1^st respondent bank to exercise a lien on the amount in the Savings Bank Account of the petitioner and there is nothing to indicate that the exercise of such lien is illegal in the facts and circumstances of this case.

6. The petitioner is also not entitled to an order directing the bank to revise the terms of One Time Settlement. It is settled law that where the grant of One Time Settlement is in terms of a Scheme, it is not open to the borrower or any other person claiming such relief to seek that the terms of such One Time Settlement be modified in some manner (See State Bank of India V. Sham P.S; 2025(1) KHC 81]. Further, it is to be noted from Exhibit P2 that substantial waiver of a sum of Rs.27,05,415.49 was offered in terms of the One Time Settlement Scheme and it is not within the province of this Court to direct that further concessions be extended to the petitioner. That apart, the petitioner has not proved bona fides by remitting the amount directed to be paid as a condition for the interim order dated 16.03.2026. In such circumstances, the petitioner is not entitled to any of the reliefs sought for in this writ petition in exercise of the discretionary jurisdiction vested in this Court under Article

226 of the Constitution of India .

The writ petition fails and it is accordingly dismissed.