2. In this regard, we state in reply thereto as under:
3. Accordingly, the subject representations are
disposed-off. Kindly take note that as per the directions of
the Hon'ble High Court, Bank has stalled the recovery
action to permit you to submit the OTS offer within four
weeks from the date of order. Since, proper OTS offer
was not submitted within the said period, Bank hereafter
will continue with actions as per the provisions of Law for
recovery of entire dues."
NC: 2025:KHC:11116
7. The petitioners now call in question the said order
and again seeks a direction for grant of an OTS.
8. Learned counsel appearing for the petitioners seeks
to place reliance upon plethora of judgments of the Apex Court
or that of the Co-ordinate Bench or the Division Bench of this
Court contending that in all the cases, there has been a
direction to the Bank to consider One Time Settlement in terms
of the prevailing scheme. He would seek to place reliance upon
the following judgments:
1. Sardar Associates v. Punjab & Sind Bank - (2009) 8
SCC 257
2. Bijnor Urban Co-op Vs. Meenal Agarwal -
AIRONLINE 2021 SC 1210
3. State Bank of India Vs. Arvindra Electronics -
(2023) 1 SCC 540
4. Shekhar resorts Ltd. Vs. Union of India - (2023) 3
SCC 220
5. Canara Bank Vs. Leatheroid Plastics - AIRONLINE
2020 SC 560
6. Manne Guru Praasad Vs. Pavaman Ispat - 2021
SCC Online Kar 12934
7. Mohanlal Patidar Vs. Bank of Maharashttra - 2022
(2) MP MPLJ
8. Tripureswari Enterprises Vs. State Bank of India -
2022 SCC Online Tri 796
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NC: 2025:KHC:11116
9. Syed Moinuddin Vs. Chief General Manager -
AIRONLINE 2022 KAR 51
10. Jnana Sarvora Vs. Housing & Urban Development -
W.P.No.33016/2021 dated 29/10/2021
11. Devidayal Castings Vs. Haryana Financial
Corporation - (2022) 16 SCC 411
12. Comptroller & auditor General Vs. K S Jagannathan
- AIR 1987 Supreme Court 537
13. Nikhil Mathew Vs. State Bank of India - AIR 2018
KERALA 203
9. All the afore-quoted judgments which the learned
counsel appearing for the petitioners seeks to place reliance
upon at least in a few cases where at the time when the
judgment of Apex Court in the case of STATE BANK OF INDIA
V. ARVINDRA ELECTRONICS PRIVATE LIMITED1 was not in
place.
10. The Apex Court in the case of ARVINDRA
ELECTRONICS supra, while considering identical issue as to
whether this Court would be empowered to direct by way of a
positive direction to grant an OTS holds that the Court would
not have the power. The Apex Court holds as follows:
(2023) 1 SCC 540
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NC: 2025:KHC:11116
"14. While considering the aforesaid issue the recent
decision of this Court in Meenal Agarwal [Bijnor Urban Coop.
Bank Ltd. v. Meenal Agarwal, (2023) 2 SCC 805 : 2021 SCC
OnLine SC 1255] is required to be referred to.
15. In Meenal Agarwal [Bijnor Urban Coop. Bank
Ltd. v. Meenal Agarwal, (2023) 2 SCC 805 : 2021 SCC OnLine
SC 1255] this Court answered the following two questions :
(SCC para 6)
"6.1. (i) Whether benefit under the OTS Scheme can be
prayed as a matter of right?
6.2. (ii) Whether the High Court in exercise of powers
under Article 226 of the Constitution of India can issue a writ
of mandamus directing the Bank to positively consider the
grant of benefit under the OTS Scheme and that too dehors
the eligibility criteria mentioned under the OTS Scheme?"
16. On a detailed analysis of the OTS Scheme, it is observed
and held by this Court in Meenal Agarwal [Bijnor Urban Coop.
Bank Ltd. v. Meenal Agarwal, (2023) 2 SCC 805 : 2021 SCC
OnLine SC 1255] that:
(i) No borrower can, as a matter of right pray for a grant
for the benefit of One Time Settlement scheme;
(ii) No writ of mandamus can be issued by the High Court
in exercise of Article 226 of the Constitution of India,
directing the financial institution/bank to positively grant a
benefit of OTS to a borrower;
(iii) The grant of benefit of OTS Scheme is subject to the
eligibility criteria and the guidelines issued from time to time.
17. Though the decision of this Court in Meenal
Agarwal [Bijnor Urban Coop. Bank Ltd. v. Meenal Agarwal,
(2023) 2 SCC 805 : 2021 SCC OnLine SC 1255] was specifically
pressed in service on behalf of the Bank and was pointed out to
the High Court, the High Court instead following the binding
decision of this Court in Meenal Agarwal [Bijnor Urban Coop.
Bank Ltd. v. Meenal Agarwal, (2023) 2 SCC 805 : 2021 SCC
OnLine SC 1255] has not followed the same by observing that
the earlier decision of this Court in Sardar Associates [Sardar
Associates v. Punjab & Sind Bank, (2009) 8 SCC 257 : (2009) 3
SCC (Civ) 350] is more elaborate. We do not approve such an
observation by the High Court and not following the subsequent
binding decision of this Court which as such was on the point.
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NC: 2025:KHC:11116
Being a subsequent decision on the point/issue, the High Court
was bound to follow the same.
18. Even otherwise it is required to be noted that the
decision of this Court in Sardar Associates [Sardar
Associates v. Punjab & Sind Bank, (2009) 8 SCC 257 : (2009) 3
SCC (Civ) 350] is distinguishable on facts. In Sardar
Associates [Sardar Associates v. Punjab & Sind Bank, (2009) 8
SCC 257 : (2009) 3 SCC (Civ) 350] it was found that the Bank
deviated from the OTS guidelines issued by Reserve Bank of
India and therefore this Hon'ble Court held that the RBI
Guidelines are binding on the Bank and that the Bank shall deal
with the case of the borrower under the RBI Guidelines on OTS.
Therefore, even otherwise on facts the said decision was not
applicable at all.
19. In the present case in the sanctioned letter dated 21-11-
2017 it was specifically provided that the entire payment to be
made by 21-5-2018. The schedule to make the payment under
the instalments was also mentioned. It is an admitted position
that the borrower did not make the payment due and payable
under the sanctioned OTS Scheme on or before the date
mentioned in the sanctioned letter. The prayer of the borrower
for extension of nine months came to be rejected as far as back
on 16-5-2018 and the borrower was directed to make the
payment of Rs 2.52 crores by 21-5-2018, the borrower failed to
make the payment."
11. The judgment that the learned counsel appearing
for the petitioners seeks to place reliance upon in the case of
SARDAR ASSOCIATES AND OTHERS V. PUNJAB & SIND
BANK AND OTHERS2 is relied on and distinguished.
12. In that light, the petitioners become entitled to only
a mandamus directing the Bank to consider the case of the
(2009) 8 SCC 257
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petitioners for grant of an OTS in terms of the scheme that is
prevailing.
13. Learned counsel appearing for the respondent -
Bank would vehemently object to any such direction being
given on the score that the petitioners seek finance of Rs.70.00
lakhs, comes forward to the Bank by giving a proposal for OTS
of Rs.40.00 lakhs, not even the principal amount. Therefore,
there was no option to the Bank, but to reject the offer of OTS.
She would further contend that the scheme of OTS, which the
petitioners seek to place reliance upon was subsisting only up
to the end of the financial year of 2022 and is no longer in
subsistence. The OTS is considered by the Bank on a case to
case basis now.
14. In that light, I deem it appropriate to direct the
Bank to consider the case of the petitioners for grant of an
OTS, it should not be construed as a positive direction. It is
only a direction to consider in terms of the extant guidelines/
scheme/ policy or the manner in which the Bank would consider
cases for grant of an OTS on a case to case basis.
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NC: 2025:KHC:11116
15. The petitioners have deposited Rs.10.00 lakhs
pursuant to the interim order granted by this Court. The interim
order was granted on the score that the Bank would not take
any precipitative action qua the proceedings under the
SARFAESI Act, 2002. Therefore, the Bank while considering the
OTS of the petitioners in a manner known to law, shall take
note of the deposit that is made pursuant to the direction of
this Court, add the amount to the OTS amount and then pass
necessary orders, in accordance with law.
16. Learned counsel appearing for the petitioners,
at this juncture, submits that the auction is slated to be held
on 27.03.2025.
17. Learned counsel appearing for the respondent
submits that since 2021, not a rupee is paid by the petitioners
except Rs.10.00 lakhs pursuant to the order passed by this
Court.
18. In that light, before the intended date of auction
i.e., 27.03.2025, the petitioners shall deposit Rs.10.00 lakhs to
the Bank.
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NC: 2025:KHC:11116
19. In the event the said deposit comes about, the
auction shall be deferred.
20. In the event the petitioners would not deposit the
amount, the Bank is at liberty to proceed with the auction.
With the aforesaid observations, the petitions stand
disposed.
Sd/-
(M.NAGAPRASANNA)
JUDGE
SJK
