No right to compel a bank for One Time Settlement under Article 226; entitlement depends on bank’s discretion.

ORDER

The above writ petition is filed seeking a mandamus to the respondents to settle the balance amount payable by way of a one time settlement by giving adequate number of instalments to the petitioner within the stipulated time.

2. The facts as set out in the affidavit filed in support of the writ petition are as follows:-

The petitioner is an agriculturist by profession and he has two children, i.e., one daughter and one son. The petitioner's daughter namely Gowri, after completing her 12^th standard course, secured seat for MBBS at Karpaga Vinayagar Medical College, Chengalpattu, Chennai for a period of five years. In order to fund her education, the petitioner along with his daughter had approached the respondent Bank for financial assistance for her continued studies in the MBBS Course for 2^nd to 5^th year and the 3^rd respondent bank had agreed to extend a loan for a sum of Rs.11,80,000/- which was to be disbursed in over a period of time.

3. It is also the case of the petitioner that he had stood guaranteed for the said loan and had offered his property document as surety. The petitioner would further submit that his daughter has been periodically remitting the equated monthly instalments of Rs.28,200/- and due to financial crisis had defaulted in the payment of few instalments.

4. It is further case that towards the loan and interest, a total sum of Rs.11,50,000/- had been paid through monthly remittance. While so, on 30.07.2025, the 2^nd respondent bank had issued a demand notice to the petitioner informing him that a sum of Rs.21,55,976/- was outstanding and demanded payment within a period of 60 days. From the narration in the affidavit, it appears that the petitioner's daughter after becoming a Doctor had failed to help her parents to clear the loan. Therefore, the petitioner had sent a detailed representation to the respondents bank on 24.06.2025, narrating the facts and requesting the 3^rd respondent to furnish the latest statement and to enable him to make a one time settlement. The said representation has not been considered to date. Therefore, the petitioner has come forward with a writ in question.

5. Though the prayer would read as follows:-

“Writ Petition filed under Article 226 of the Constitution of India , praying this Court to issue a Writ of Mandamus directing the respondents herein to settle the balance amount payable to the respondent bank by way of One Time Settlement by providing adequate opportunity of hearing to the petitioner”, the petitioner now seeks a direction to the respondents to permit him to settle the balance amount as a one time settlement.

6. Mr.N.Dilip Kumar, learned Standing Counsel appearing on behalf of the respondents produced the judgment of the Hon'ble Supreme Court in the case of Bijnor Urban Cooperative Bank Limited vs. Meenal Agarwal and others, reported in (2023) 2 SCC 805 , wherein the Hon'ble Supreme Court had held that High Court cannot exercise any powers under Article 226 of the Constitution of India to direct the financial institution/bank to positively grant the benefit of OTS to borrower.

7. In the case on hand, relief claimed is for a direction to the Bank to to accept the amount payable as one time settlement. In the Judgment relied upon by the learned Standing Counsel appearing on behalf of the respondent, the Hon'ble Supreme Court has observed as follows:-

“12. Even otherwise, as observed hereinabove, no borrower can, as a matter of right, pray for grant of benefit of one-time settlement scheme. In a given case, it may happen that a person would borrow a huge amount, for example, Rs.100 crores. After availing the loan, he may deliberately not pay any amount towards instalments, though able to make the payment. He would wait for the OTS scheme and the