The Supreme Court had rejected a case on Friday put forth by the Bank of Maharashtra challenging a High Court’s order.
The High Court had ordered the Bank of Maharashtra to accept the OTS proposal given by a farmer who had withdrawn a loan from the bank.
The panel of Justices DY Chandrachud and Surya Kant remarked to the bank, “Go after bigger fish. Such litigation in the Supreme Court will spoil the families of farmers financially.” After which, the SC had dismissed the plea, assailing Madhya Pradesh High Court’s order dated February 21, 2022.
The Supreme Court criticized the Bank for not taking action and acting unlawfully against people who scam 1000s of crores and also accused the Bank of filing a case against farmers or poor people. The SC said that the bank had accepted the down payment given by the farmer.
In the present case, the respondent had withdrawn a loan from the Bank of Maharashtra,
which quantified to a sum of Rs. 36,50,000/- to be paid as a One Time Settlement to the Bank in a stipulated time. The respondent had deposited Rs. 35,00,000/- to the bank.
The respondent sought help from the Madhya Pradesh High Court when the Asset Recovery Branch of the Bank had informed him to deposit Rs. 50.50 lakhs as a full and final settlement of his dues.
The respondent’s counsel raised an argument before the court that a letter dated March 9, 2021, showed that he was required to pay a minimum of 10% of the OTS amount within the stipulated time, biding to which he had deposited Rs.35,00,000/- out of Rs. 36,50,000/-.
The respondent further stated that the only option left with the Bank was to proceed further after issuing ‘the intimation letter’ and, if the respondent was eligible, issue a ‘sanction letter.’ His counsel also added that the Bank had failed to accept the above and, on the contrary, decided to enhance the compromise amount to Rs.50.50 lakhs against the OTS scheme.
The bench of Justices Sujoy Paul and Dwarka Dhish Bansal said that they are unable to approve the impugned orders and actions of the Bank. The respondent promptly filed instant petitions within two months from the date of the issuance order, which is 22.9.2021. Hence, the bench of Justices cannot hold that because of Clause-7 of the OTS scheme; the offer expired automatically. It is also evident to the Justices that the respondent never agreed to the unilateral decision dated 25.08.2021.
The Court heard the respondent’s plea and ordered the bank to accept the OTS proposals given by the respondent and issue sanction letters with immediate effect. The Court also added that the Bank must complete all the formalities and provide the respondent with the consequential benefits.
