The court may allow a borrower to settle outstanding loan liabilities through a one-time settlement scheme even after failed interim compliance, provided the borrower strictly adheres to the terms of said scheme thereafter.

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.11.2025, THE COURT ON 19.06.2026 DELIVERED THE FOLLOWING:

J U D G M E N T

The petitioner has approached this court challenging the proceedings initiated by the 1st respondent bank for recovery of amounts due under credit facilities availed by the petitioner from the respondent bank in the year 2021. Substantially the only relief sought for by the petitioner is for a direction to the 1st respondent bank to permit the petitioner to clear the liability in instalments and to regularise the loan account.

2. When this matter is taken up for consideration today the learned counsel appearing for the respondent bank submits that the petitioner has not complied with the condition imposed in the interim order dated 29-11-2025. It is submitted that in such circumstances the petitioner is not entitled to any relief in this writ petition.

3. Faced with the situation, the learned counsel for the petitioner submits that the petitioner may be permitted to approach the bank with an application for one time settlement under the one time settlement scheme now in force (Ashwas-2026).

4. The learned counsel appearing for the respondent bank has no objection.

5. Accordingly this writ petition will stand disposed of directing that if the petitioner were to submit an application for one time settlement under the one time settlement scheme now in force (Ashwas-2026) within a period of 10 days from today, the said application shall be considered by the competent authority of the respondent bank and a decision shall be taken on the application without undue delay. If the petitioner is offered one time settlement, he shall duly and faithfully comply with the terms of one time settlement. If the petitioner fails to comply with the terms of one time settlement, it will be open to the respondent bank to continue with the proceedings initiated against the petitioner.

Writ petition is ordered accordingly.