Telangana High Court: While exercising its powers under Article 226 in case relating to delay in payment under One Time Settlement (‘OTS’) Scheme, K. Lakshman, J., grants extension of time to repay the Bank as there was only a day’s delay in making the payment, hence the OTS Scheme will not be cancelled.
Facts:
The petitioner is in the real estate business, constructing and selling flats. He took a loan from State Bank of India (‘Bank’) during his course in business. Due to Covid- 19 pandemic situation, the petitioner sustained huge losses. The petitioner was unable to repay the loan amount therefore, the Bank declared the account of the petitioner as Non-Performing Asset (‘NPA’) on 30-10-2020. However, to pay the said amount in terms of OTS, the petitioner sold his agricultural land.
Vide circular dated 12.10.2020, SBI OTS Scheme was offered which was applicable to all the NPAs as on 31-03-2020 with outstanding dues of above Rs. 20 lakh and up to Rs. 50 Crore.
According to the terms and conditions of the OTS Scheme, the balance amount was supposed to be paid by 27-07-2021. The petitioner submitted a letter dated 28-07-2021 enclosing the cheque which the bank refused to accept based on time lapse. On 31-07-2021, the bank cancelled the OTS scheme and demanded the entire outstanding amount with interest.
Arguments:
The Counsel for the petitioner contended that there is delay of only one day as on 28-07-2021. Further the counsel contended that the bank failed to consider the request made by the petitioner that due to the present COVID-19 pandemic situation, the petitioner is unable to pay the loan amount within the stipulated time.
Observation and Analysis
The Court relied on the illustrative guidelines laid down in Anu Bhalla v. DM, Pathankot, 2020 SCC OnLine P&H 4387 where the division bench held that the Court has power to extend the period of settelement while exercising its jurisdiction under Article 226 of the Constitution. Keeping in view of the guidelines, the Court held that the petitioner is granted extension to repay the OTS amount within 10days.
The Court held that as there is only one day’s delay hterefore, it is a fit case to extend the time to the petitioner to repay the loan amount.”
[Md. Afroz Baig v. State Bank of India, 2022 SCC OnLine TS 1804, decided on 19-09-2022]
Advocates who appeared in this case:
For the Petitioner: E. Madan Mohan Rao, Senior Counsel
For the Respondents: Mettu Srinivas Reddy, SC for SBI
