W.P.(C) 1591/2022 Page 1 of 11

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IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: 22^nd July, 2022

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W.P.(C) 1591/2022

PRAYAG POLYTECH PRIVATE LIMITED & ANR.

..... Petitioners

Through:

Mr. Vipul Ganda with Mr. Chaitanya

Gaurang Tripathi, Advocates.

versus

STATE BANK OF INDIA

..... Respondent

Through:

Ms. Jaya Tomar, Advocate.

CORAM:

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

SANJEEV NARULA, J. (Oral):

CM APPL.32079/2022 (seeking condonation of delay in filing counter

1. For the grounds and reasons stated in the application, the same is

allowed and disposed of. The counter affidavit filed on 19^th July, 2022 is

taken on record.

W.P.(C) 1591/2022

2. Briefly stated, Petitioner No. 1 – Prayag Polytech Private Limited

had availed credit facilities from Respondent – State Bank of India (“SBI”).

Subsequently, somewhere in 2018, after deterioration of Petitioner-

company’s financial condition and non-availability of funds, SBI declared

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W.P.(C) 1591/2022 Page 2 of 11

Petitioner-company’s account to be a Non-Performing Asset (“NPA”) and

initiated proceedings before the Debt Recovery Tribunal (“DRT”).¹

3. In the meantime, on 28^th October, 2020, SBI sent a communication to

Petitioner-company informing it of a One Time Settlement (“OTS”) scheme

of NPAs and offered to settle the total outstanding amount i.e., Rs.

7,15,72,836/- for Rs. 2,29,51,380.10/-. The said proposal was discussed by

the board of Petitioner-company in its meeting held on 10^th November, 2020

and the acceptance was conveyed to SBI on 11^th November, 2020.

4. Thereafter, SBI issued a letter dated 24^th November, 2020

[hereinafter, “sanction letter”], setting-out the terms of the OTS. Since the

controversy revolves around the construction of the said terms, for quick

reference, the same are reproduced hereinbelow:

“Scheme for One Time Settlement of NPAs & AUCAs (Sill OTS 2020)

1State Bank of India v. Prayag Polytech Private Limited & Anr. in (OA/ 490/2020).

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W.P.(C) 1591/2022 Page 3 of 11

5. The balance amount can he paid within 8 months from the date of this

letter, i.e. 24/11/2020 (the validity period) together with interest @ 6

Months MCLR on reducing balance basis effective from the date of this

letter, i.e. 24.11.2020 failing which the OTS sanction will be rendered

infructuous.

6. However, no interest will be charged if the entire OTS amount is paid

within 6 months from the date of this letter, i.e. 24 /11/2020.

A :

B. Incentive on 50% payment of OTS Amount:

5%”

[Emphasis Supplied]

5. In terms of the above-extracted conditions no. 5 & 6, the OTS amount

of Rs. 2,29,51,380.10/- could have been paid either (i) within six months

without interest from the date of the sanction letter (condition no. 6); or (ii)

within eight months with interest @ six-months Marginal Cost of Funds

Based Lending Rate (“MCLR”) on reducing balance basis, effective from

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W.P.(C) 1591/2022 Page 4 of 11

the date of the sanction letter (condition no. 5). It is further stipulated in

condition no. 5 that failure of payment would render the OTS sanction

infructuous.

6. Petitioner-company complied with the terms of sanction letter and

made payments to SBI in the following manner:

STATE BANK OF INDIA-OTS

Date

Account

Amount

CHQ. No. / RTGS No.

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W.P.(C) 1591/2022