Asokan Vasu vs. State Bank Of INDIA
Held
The High Court upheld the single judge's decision, refusing to compel the bank to extend the OTS scheme or reschedule the loan. It ruled that courts cannot force a contract on an unwilling party or interfere in contractual matters between a bank and a borrower under Article 226, especially when the borrower has defaulted on agreed terms.
Facts
The appellant, a hotel proprietor, defaulted on a term loan from State Bank of India, leading to his account being classified as NPA. He was offered an One Time Settlement (OTS) scheme but failed to pay the final installment by the due date, citing the COVID-19 pandemic and his hotel being converted into a quarantine facility. He sought a six-month extension from the bank, which was denied, leading him to file a writ petition and subsequent appeal.
Key Issues
Whether the High Court, exercising its writ jurisdiction under Article 226 of the Constitution, can direct a bank to extend the time for payment under an One Time Settlement (OTS) scheme or reschedule a loan, despite the borrower's default on the agreed terms.
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY MONDAY, THE 28TH DAY OF SEPTEMBER 2020 / 6TH ASWINA, 1942 WA. No. 1264 OF 2020 (AGAINST THE JUDGMENT IN WP(C) NO. 9126/2020(M) DATED 16.09.2020 OF HIGH COURT OF KERALA) APPELLANT/PETITIONER: ASOKAN VASU, AGED 70 YEARS PROPRIETOR, M/S.MANGALATH HOTELS AND RESORTS, CHADAYAMANGALAM, KOTTARAKKARA, KOLLAM DISTRICT, PIN-691534. BY ADVS. SRI. JOHN K.GEORGE SRI.P.P.BIJU RESPONDENT/RESPONDENT: STATE BANK OF INDIA, STRESSED ASSETS RECOVERY BRANCH, LMS COMPOUND, OPP.MUSEUM WEST GATE, VIKAS BHAVAN P.O, THIRUVANANTHAPURAM-695033. BY ADV. SRI. JAWAHAR JOSE, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 28.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.A.1264/2020 2 “C.R.” JUDGMENT Dated this the 28th day of September, 2020 Manikumar, CJ Instant writ appeal is filed against the judgment in W.P.(C) No.9126 of 2020 dated 16.09.2020, by which, a learned single Judge of this court, taking note of the default committed by the petitioner, including under the OTS Scheme, declined to grant the reliefs sought for, and dismis
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