Kerala High Court
Omanakuttan Pillai. C vs Authorised Officer & Chief Manager on 24 September, 2025
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OP(DRT) 48/2025 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 24TH DAY OF SEPTEMBER 2025 / 2ND ASWINA, 1947
OP (DRT) NO. 48 OF 2025
SA NO.216 OF 2020 OF DEBT RECOVERY TRIBUNAL- 2, ERNAKULAM
PETITIONER/APPLICANT:
OMANAKUTTAN PILLAI. C,
AGED 58 YEARS
S/O. CHELLAPPAN PILLAI, PROPRIETOR OF MANGALATHU GLASS
HOUSE, PULAMON.P.O, KOTTARAKKARA, KOLLAM, PIN - 691531
BY ADV SHRI.P.SHRIHARI
RESPONDENT/1ST DEFENDANT:
AUTHORISED OFFICER & CHIEF MANAGER,
STATE BANK OF INDIA, KOTTARAKKARA ,TEMPLE JUNCTION
BRANCH, KOTTARAKKARA, KOLLAM, PIN - 691506
BY ADV.SRI.JITHESH MENON, SC, SBI
SMT.S.LAKSHMY
THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION
ON 18.09.2025, THE COURT ON 24.09.2025 DELIVERED THE FOLLOWING:
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OP(DRT) 48/2025 2
MOHAMMED NIAS C.P., J.
......................................................
O.P(DRT) No.48 of 2025
.............................................................
Dated this the 24th day of September, 2025
JUDGMENT
This original petition is filed with the following reliefs:-
i. Issue order, or Direction calling for the records
leading up to Ext.-P14 from Respondent and to direct the
Respondent to refund an amount of Rs.12,14,286.60 towards
incentive as eligible as per Ext.-P4 along with the excess amount
paid and to close the loan account, and to return all the title
documents pertaining to immovable properties within a time
frame;
ii. Issue such other and further Writ, Order, or Direction
as this Hon'ble Court may deem fit to grant under the facts and
circumstances of the case.
2. The petitioner had availed of a cash credit facility in 2006,
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which was enhanced later, after creating a security interest. As the
petitioner defaulted in repayment of the amounts due to the bank, the
accounts were classified as Non-Performing Assets on 28.08.2017. Action
was initiated under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (hereinafter
referred to as 'SARFAESI Act'). The petitioner had challenged the same
by filing W.P. (C) No. 3445/2017, including for the grant of an instalment
facility. In the writ appeal filed by the petitioner, the judgment itself was
modified, directing the petitioner to pay the unserved interest portion
remaining overdue for payment under the cash credit facility in two equal
monthly instalments, and the bank was directed to consider the question
of renewing the cash credit facility for further periods.
3. Alleging that the petitioner did not comply with the directions
of this Court, the bank again proceeded under the SARFAESI Act, which
resulted in the petitioner filing Securitisation Application No.251/2017,
which was disposed of. Pending the said Securitisation Application, the
petitioner has sought a one-time settlement facility from the bank, which
was rejected. Thereafter, the petitioner had filed S.A. 216/2020, again
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challenging the actions of the bank, and during its pendency, the
petitioner was served with Annexure-1, intimating him that he was
eligible for a settlement under the SBI OTS 2020. The same was
sanctioned on 25.11.2020 with the following conditions:
"Scheme for One Time Settlement of NPAs & AUCAS (SBI
OTS 2020)
We refer to your letter No. dated for settlement of your dues
to the Bank under the captioned scheme. We are pleased to
advise that your application under the captioned scheme has
been accepted by the appropriate authority.
1. OTS amount payable under the OTS Scheme will be
Rs.22721872.02 Only.
2. Application money of Rs. 1150000.00 paid by you will be
appropriated towards your OTS amount.
3. Another 10% of the OTS Amount will have to be deposited
by you as first instalment within thirty days from the date
of sanction of OTS failing which the OTS sanction will be
rendered infructuous and OTS treated as failed.
4. Another 10% of the OTS Amount will have to be deposited
by you as second instalment of money within sixty days
from the date of sanction of OTS failing which the OTS
sanction will be rendered infructuous and OTS treated as
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failed.
5. The balance amount can be paid within 8 months from
the date of this letter, i.e. // (the validity period) together
with interest @ 6 Months MCLR on reducing balance basis
effective from the date of this letter, i.e. within, 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.
4. The petitioner contends that only the payment to be made
under condition No.4 of Ext.P4 dated 25.11.2020 was not complied with on
time, but the entire payment mentioned in Ext.P4 was made well before
the eight months granted therein.
5. The bank, on the other hand, contends that the payment
under condition No.3 itself was defaulted, which led to the cancellation of
the scheme, and, therefore, they continued their proceedings under the
SARFAESI Act. The Debts Recovery Tribunal, through Ext.P15 order dated
20.11.2024, dismissed SA 216/2020, which, inter alia, considered the
question of the compliance with the OTS conditions by the petitioner and
found that the petitioner had admittedly not complied with the same and
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therefore the bank was justified in cancelling the same. Ext.P15 has not
been challenged to date.
6. The learned Senior counsel appearing for the petitioner
mainly challenged the correctness of the order of the Tribunal, which
affirmed the decision of the bank rejecting the OTS proposal. According
to him, the petitioner had made payments as follows:
Exhibit.P2 16-10-2020 Letter from Bank about OTS addressed to
petitioner fixing the OTS amount as
Rs.2,27,21,872/-
Exhibit.P3 23-11-2020 Petitioner remits Rs.11,50,000/- as upfront
amount
Exhibit.P4 25-11-2020 Bank inform that amount paid as per Exhibit.P3
will be appropriated towards OTS
Exhibit.P5 23-12-2020 Petitioner remits Rs.11,50,000/- towards
instalment which fall due on 25-12-2020.
23-02-2021 Last date for payment of 2nd instalment
06-03-2021 Pays Rs.45,00,000/-
06-03-2021 Pays Rs.50,00,000/-
08-03-2021 Pays Rs.100,00,000/-
The period of eight months expired on 24-07-2021
Total amount paid as on 08-03-2021
Rs.2,28,00,000/-
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7. According to the respondent bank, the payments were made as
follows:
• 23-11-2020 - Rs. 11,50,000/- deposited by the
petitioner being 5% of the amount to
consider OTS.
• 25-11-2020 - OTS was sanctioned for an amount of
Rs.2,27,21,872.02, on payment of
Rs.11,50,000/- as the upfront amount on
23.11.2020.
• 25-12-2020 - The petitioner had to deposit
Rs. 22,72,187.20 being the 10% of the OTS
amount as per Exhibit P2. However, the
petitioner remitted only 5% being
Rs.11,50,000/- as against Rs. 22,72,187.20.
Hence the OTS failed.
• 24-01-2021 - The petitioner had to deposit
Rs. 22,72,187.20 - 10% of the OTS amount
as per Exhibit P2. No remittances made.
• 08-03-2021 - The petitioner remitted Rs.2.05 crores as
per the undertaking in SA 216 of 2020 to
avert the sale as per sale notice dated
15-02-2021.
Total amount remitted from 23-11-2020 to 08-03-2021 = Rs.2,28,00,000/-
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8. Thus, in short, both the petitioner and the respondent bank
would concede that within the outer limit of eight months granted under
Ext.P4, the petitioner had remitted the amount fixed by the bank, though
the payment was not in terms of condition Nos. 3 and 4 in Ext.P4 sanction
letter.
9. The learned Senior Counsel for the petitioner submits that
though the petitioner had made the payment within the outer time limit
fixed in Ext.P4 with a delay, it must be treated as compliance with the OTS
and findings to the contrary by the Tribunal are clearly wrong and liable
to be interfered with under Article 227 of the Constitution of India.
10. The learned counsel for the respondent bank, Smt.S.
Lakshmi, on the other hand, contends that, going by the admitted case,
the petitioner had defaulted in complying with condition No.4. As a
matter of fact, the petitioner has not complied with condition No. 3
either, as could be seen from the date of the payments effected. It is also
submitted that a recovery certificate was also issued in DRC 22/2025 in OA
126/2018 on 19.02.2025 itself. It is also to be noted that payments made
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by the petitioner, after the lapse of the OTS scheme and pursuant to the
directions of the Tribunal, cannot be considered as payments towards
OTS. Thus, no relief can be granted to the petitioner.
11. The learned counsel also relies on the decisions in Bijnor
Urban Cooperative Bank Ltd. v. Meenal Agarwal [2022 (1) KLT SN
2(C.No.3) SC], State Bank of India v. Arvindra Electronics Pvt. Ltd.
[2022 (6) KLT OnLine 1115 (SC)], Hyder C.A. v. Authorised Officer,
India Bank [2025 KHC OnLine 864], PHR Invent Educational Society v.
UCO Bank and others [Civil Appeal No. 4845 of 2024], State Bank of
India v. Sham [2024 (6) KLT 865] and Assistant General Manager State
Bank of India v. Tanya Energy Enterprises Through its Managing
Partner Shri Alluri Lakshmi Narasimha Varma [2025 KHC OnLine
6802 SC], to justify the cancellation of the OTS sanctioned to the
petitioner.
12. Having heard the learned counsel appearing on both sides
and going by the admitted case and the dates on which payments were
made, there cannot be any doubt at all that the OTS scheme was not
complied with by the petitioner as stipulated in Ext.P4 read along with
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the eCircular dated 12.10.2020 issued by the State Bank of India. The facts
of the case, however, would show that the petitioner did make the
payment within the outer limit of eight months granted in Ext.P4, despite
not complying with condition Nos. 3 and 4 of the scheme. The right of the
bank to proceed under the SARFAESI Act after cancelling the OTS scheme
also cannot be disputed, more so when the challenge to the same ended
through Ext.P15 order of the Tribunal dated 20.11.2024. It is also to be
noted that a recovery certificate has also been issued, as referred to
above.
13. As such, in normal circumstances, no interference is
warranted in this original petition, as the actions of the bank rejecting the
OTS proposal cannot be faulted. However, taking note of the fact that the
petitioner had made the entire payments, within the outer limit granted
in Ext.P4, I am inclined to grant a limited relief to the petitioner, as has
been done by the Hon'ble Supreme Court in the judgment in Tanya
Energy Enterprises (supra) by granting the petitioner an opportunity to
submit a fresh proposal for OTS not under the OTS 2020 scheme. If the
terms and conditions put forth by the petitioner are found to be workable
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and acceptable, the respondent bank may take such decision on it, in
accordance with law, as it deems fit and proper in the circumstances. In
case the decision of the bank is not acceptable to the petitioner, it will be
open to the petitioner to work out his remedies against Ext.P15 order or
other steps for recovery taken by the respondent bank, if so advised.
The original petition is disposed of as above.
Sd/-
MOHAMMED NIAS C.P.
JUDGE
okb/
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APPENDIX OF OP (DRT) 48/2025
PETITIONER EXHIBITS
Exhibit P1 TRUE COPY OF S.A.216/2020 (WITHOUT
ANNEXURES).
Exhibit P2 TRUE COPY OF LETTER DATED 16/10/2020 ISSUED
BY THE BANK
Exhibit P3 TRUE COPY OF PAY-IN-SLIP DATED 23/11/2020 FOR
RS.11,50,000/-.
Exhibit P4 TRUE COPY OF LETTER DATED 25/11/2020 ISSUED
BY THE BANK.
Exhibit P5 TRUE COPY OF PAY-IN-SLIP DATED 23/12/2020 FOR
RS.11.50 LAKHS
Exhibit P6 TRUE COPY OF ACCOUNT STATEMENT OF THE
GUARANTOR KOCHUKESAVAN PILLAI @ K.K.PILLAI
Exhibit P7 TRUE COPY OF LETTER DATED 29/12/2020 ISSUED
BY THE BANK.
Exhibit P8 TRUE COPY OF PASS-BOOK EVIDENCING PAYMENTS OF
OTS AMOUNTS
Exhibit P9 TRUE COPY OF PROCEEDINGS DATED 12/03/2021 IN
EXT.P1 S.A.216/2020 ON THE FILE OF DRT-2,
ERNAKULAM.
Exhibit P10 TRUE COPY OF LETTER DATED 05/05/2021 SENT BY
THE PETITIONER TO THE RESPONDENT.
Exhibit P11 TRUE COPY OF REPLY LETTER DATED 12/05/2021
RECEIVED FROM THE RESPONDENT
Exhibit P12 TRUE COPY OF SECTION 14 APPLICATION DATED
03/08/2020, WHICH IS NUMBERED AS
M.C.NO.177/2022 ON THE FILE OF CJM COURT,
KOLLAM.
Exhibit P13 TRUE COPY OF ORDER DATED 24/06/2022 IN
M.C.NO.177/2022 PASSED BY CJM COURT, KOLLAM
Exhibit P14 TRUE COPY OF NOTICE DATED 21/01/2025 ISSUED
BY THE ADVOCATE COMMISSIONER IN
M.C.NO.177/2022 PASSED BY CJM COURT, KOLLAM.
Exhibit P15 TRUE COPY OF FINAL ORDER DATED 20/11/2024 IN
S.A.NO.216/2020 PASSED BY DRT-2, ERNAKULAM.
RESPONDENT EXHIBITS
Exhibit R1 True Copy of judgement in W.P.(c) 3445 /2017
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Dt.17 .2.2017.
Exhibit R1(a) True copy of judgement in Writ Appeal No.550
of 2017
Exhibit R1(b) True copy of LetterNo.SARB/TVM/KNB/1924/2020-
21 Dt.29.12.2020
