The Supreme Courtroom has mentioned a borrower can not declare additional extension of time as a matter of proper for making cost below the one-time settlement (OTS) scheme.
The apex court docket mentioned the borrower has to ascertain any proper in its favour to assert the extension as a matter of proper.
A bench of Justices M R Shah and Krishna Murari quashed the Punjab and Haryana Excessive Courtroom judgement delivered in March, which had granted additional six weeks to a borrower, an organization, to make the cost of stability quantity with curiosity to the State Financial institution of India in response to the sanctioned letter of OTS .
The highest court docket noticed that rescheduling the cost below the OTS scheme and granting extension of time would tantamount to “rewriting the contract”, which isn’t permissible whereas exercising the powers below Article 226 of the Structure.
The modification of the contract will be performed solely by mutual consent below part 62 of the Indian Contract Act, it mentioned.
Article 226 of the Structure offers with the facility of excessive courts to situation sure writs.
“The borrower as a matter of proper can not declare that although it has not made the cost as per the sanctioned OTS scheme, nonetheless or not it’s granted additional extension as a matter of proper. There can’t be any unfavourable discrimination claimed,” the bench mentioned.
The highest court docket delivered its verdict on an enchantment filed by the SBI towards the excessive court docket judgement.
It famous that the financial institution had sanctioned a money credit score in favour of the borrower.
Later, the financial institution got here out with OTS scheme in September 2017 which particularly offered for making cost as settled below the scheme inside six months from the date of sanction, else infructuous.
The apex court docket famous that the financial institution despatched OTS supply to the borrower, who accepted it.
It mentioned below the sanctioned OTS, the borrower was required to deposit 25 per cent of the quantity by December 21, 2017, and the stability quantity with curiosity was to be deposited inside six months from the date of the letter.
The borrower requested extension of eight to 9 months for compensation of stability quantity of Rs 2.52 crore, which the financial institution declined and directed it to make the cost by Might 21, 2018.
The borrower then approached the excessive court docket in search of eight to 9 months to pay the excellent quantity past Might 21, 2018.
In its verdict, the apex court docket famous that the financial institution had floated different OTS schemes and supplied to the borrower to settle the account however the firm didn’t go for them.
It mentioned the query which arises for consideration of the highest court docket is whether or not within the info and circumstances of the case, the excessive court docket was justified in extending the interval to make the cost of stability quantity below the sanctioned OTS scheme whereas exercising powers below Article 226.
The bench mentioned within the sanctioned letter dated November 21, 2017, it was particularly offered that your entire cost was to be made by Might 21, 2018.
“It’s an admitted place that the borrower didn’t make the cost due and payable below the sanctioned OTS scheme on or earlier than the date talked about within the sanctioned letter,” it mentioned.
Whereas permitting the enchantment, the bench mentioned the judgement handed by the excessive court docket granting additional time to the borrower to make stability cost below the OTS scheme in train of powers below Article 226, was “unsustainable and the identical deserves to be quashed and put aside and is accordingly quashed and put aside”.