Smt.Jannu Veronika, vs The Indian Overseas Bank,

               HON'BLE SRI JUSTICE P.NAVEEN RAO
                                  AND
              HON'BLE SRI JUSTICE J.SREENIVAS RAO


                 WRIT PETITION No.41497 OF 2018


                           Date:25.08.2022
Between:

Smt Jannu Veronika W/o.Jannu Jakariaha,
Aged about 50 yrs, Occu : Household,
R/o.H.No.2-6-85, Circuit House Road,
Hanamkonda, Warangal Urban District & another

                                                .....Petitioners
     And

The Indian Overseas Bank,
Regional Office, D.No.2-4-686,
3rd Floor, ABK Mall, Ramnagar,
Hanamkonda, Warangal,
Rep., by its Authorized Officer & others


                                                .....Respondents

The Court made the following:

HON'BLE SRI JUSTICE P.NAVEEN RAO AND HON'BLE SRI JUSTICE J.SREENIVAS RAO WRIT PETITION No.41497 OF 2018 ORDER : (Per Hon'ble Sri Justice P.Naveen Rao) Heard Sri A.Prabhakar Rao, learned counsel for the petitioners and learned counsel representing the respondent-Bank.

2. Petitioners in this writ petition are the guarantors and mortgaged their property for the loan obtained by the 3rd respondent from the Indian Overseas Bank. The borrower defaulted in repayment of the loan and the account became Non-Performing Asset leading to the respondent-Bank initiating steps to recover the money under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act'). At that stage this writ petition is filed challenging the rejection of request to grant instalments for repayment of due amount pertaining to loan account and consequential relief sought is to settle the amount due under One Time Settlement scheme by permitting the petitioners to pay loan account in instalments.

3. As held by the Hon'ble Supreme Court in Bijnor Urban Cooperative Bank Limited, Bijnor & Others Vs Meenal Agarwal & others in Civil Appeal No.7411 of 2021, the writ Court cannot mandate the Bank to extend One Time Settlement Scheme or to grant -3- instalments in payment of loan. Paragraph No.11 of the judgment reads as under :

"The sum and substance of the aforesaid discussion would be that no writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India, directing a financial institution/bank to positively grant the benefit of OTS to a borrower. The grant of benefit under the OTS is always subject to the eligibility criteria mentioned under the OTS Scheme and the guidelines issued from time to time. If the bank/financial institution is of the opinion that the loanee has the capacity to make the payment and/or that the bank/financial institution is able to recover the entire loan amount even by auctioning the mortgaged property/secured property, either from the loanee and/or guarantor, the bank would be justified in refusing to grant the benefit under the OTS Scheme. Ultimately, such a decision should be left to the commercial wisdom of the bank whose amount is involved and it is always to be presumed that the financial institution/bank shall take a prudent decision whether to grant the benefit or not under the OTS Scheme, having regard to the public interest involved and having regard to the factors which are narrated hereinabove."

4. In view thereof, this writ petition is dismissed. Pending miscellaneous petitions, if any, shall stand closed.

__________________ P.NAVEEN RAO,J _______________________ J.SREENIVAS RAO, J 25th August, 2022 Rds