The Supreme Court has granted relief to a Company who defaulted on payment under OTS scheme on account of hardships due to Covid.
The Division-Bench comprising of Justice Vineet Saran and Justice Aniruddha Bose while considering an SLP granted liberty to pay late but within a stipulated period of time.
The petitioner-Company is a Debtor to SBI. Upon default in repayment of the loan, the petitioner entered into a One Time Settlement under the OTS Scheme with the bank. Out of the installments due to be paid under the OTS Scheme, the petitioner paid approximately 25% of the amount but, thereafter defaulted again.
The petitioner then approached the Madras High Court seeking extension of time for a period of 180 days to settle the final payment under the OTS Scheme.
The High Court dismissed the writ stating that however sympathetic Courts may get wit businesses doing poorly during pandemic, they can't come to rescue and grant such inordinate relief and noted that the matter is neither of 'public interest'
For one, OTS terms are offered to similarly placed constituents and there can be no good ground as to why the terms should be relaxed for one constituent simply because such constituent has come to court or has the ability to come to court.
The Counsel for petitioner has submitted that the default was on account of Covid pandemic as the business was not doing very well. Counsel further made a statement for depositing the entire amount due, as per the OTS Scheme, with the Bank by the 14th of this month. The petitioner further undertook to pay 12% interest on the defaulted OTS amount from the respective due dates, within five days thereafter.
The Court accepted the prayers and granted the petitioner liberty to deposit the amount as per the OTS scheme. In this view, the directed bank to furnish within 3 days from date of order the amount of interest due to be paid by the petitioner at the rate of 12% per cent from the date the amount became due till 14th March, 2022.
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