2026:JHHC:16347 Page | 1 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 3855 of 2026 ----- Ashok Kumar Agarwal, aged about 65 years, Son of Late Banwari Lal Agarwal, Resident of Govind Nagar, Near SBI ATM, Kadma, Jamshedpur, P.O. & P.S.-Kadma, District-East Singhbhum, Jharkhand. ....Petitioner(s). Versus 1. Canara Bank through its Managing Director, having its head office, No. 112, JC Road, Bengaluru, P.O. & P.S.-JC Road, District- Bengaluru, Karnataka. 2. Manager, Recovery Legal & Fraud Prevention Section, Canara Bank, Regional Office, having its office at Tee Kay Corporate Tower, Jamshedpur, P.O. & P.S.-Jamshedpur, District-East Singhbhum, Jharkhand - 831001. … Respondent(s). ------ CORAM : SRI ANANDA SEN, J. ------ For the Petitioner(s) : Mr. Shashank Shekhar, Advocate For the Respondent(s) : Mr. P.A.S. Pati, Advocate …...... 02/08.06.2026: By way of filing this writ petition, the petitioner has sought for the following reliefs:- i. For issuance of an appropriate writ(s)/order(s)/direction(s) or a writ in the nature of Mandamus commanding upon the respondents to issue the One Time Settlement (OTS) letter in terms of the letter dated 19.03.2026, which was agreed between the petitioner and the bank officials. ii. Further direction upon the respondents to remove the hold from the accounts of the petitioner as on the request of the respondent- Bank, the recovery officer, D.R.T., Ranchi attached the PAN Number of the petitioner and accordingly, the other account of the petitioner has been attached by the concerned bank. 2. The fact of the case is that the petitioner, a proprietor of M/s Ashok & Company, had obtained a loan from Canara Bank for his business. Due to financial losses, the loan account was declared NPA, therefore, the bank filed an Original Application before the DRT, Ranchi which was decided ex-parte. Recovery Case No. 778 of 2016 was started before the Recovery Officer. During the recovery proceedings, the Recovery Officer attached all the bank accounts of the petitioner. The petitioner later applied for a One Time Settlement (OTS) and deposited the required amount. However, despite processing the proposal and providing unsigned OTS letters, the bank refused to issue the final sanction letter. 3. Learned counsel for the petitioner submits that instead of attaching all bank accounts of the petitioner, the bank and the Recovery Officer 2026:JHHC:16347 Page | 2 should have taken steps to recover the dues from the mortgaged property which was already available with the bank for recovery purposes. He further submits that the unsigned OTS letters dated 19.03.2026 shows that the settlement proposal had already been considered and approved by the bank. Therefore, the later refusal to issue the signed letters is unjustified. He also submits that the petitioner is ready and willing to pay the OTS amount, but the bank has failed to complete the settlement process without any valid reason. 4. Learned counsel for the respondents submits that the loan account was rightly declared as NPA as the petitioner failed to repay the loan. He also submits that the attachment of the petitioner's bank accounts was done in accordance with law and merely because a mortgaged property was available with the bank does not prevent the Recovery Officer from taking other recovery measures against the petitioner. He also submits that the bank has the authority to reject the OTS proposal of lesser amount of Rs.3,45,000/- and Rs.1,60,000/- and continue with the recovery proceedings. He further submits that the unsigned letter has got no value in eye of law. 5. After hearing both the parties and upon perusal of the records, I find that the petitioner had admittedly defaulted in repayment of the loan, resulting in the loan account being classified as NPA and recovery proceedings being initiated before the DRT, Ranchi. A Recovery Certificate has already been issued against the petitioner for recovery of the outstanding dues. It appears from the OTS offer letters dated 04.03.2026 (annexure 3 and 4 to this writ petition) that liability for the Loan Account No.75701250001399 is Rs.1,53,20,047.56/- and for the Loan Account No. 75701250000980 is Rs.1,69,75,426.14/- whereas the petitioner has offered a meagre amount of Rs.3,45,000/- and Rs.1,60,000/- respectively for the one-time settlement. Applying for OTS, depositing the upfront amount, and receiving unsigned draft letters does not give right to the petitioner to claim settlement. In Bijnor Urban Co-operative Bank Ltd. v. Meenal Agarwal, (2023) 2 SCC 805 the Hon’ble Supreme Court held that no borrower can, as a matter of right, pray for grant of benefit of one-time settlement scheme. Further, held that no Court can, by issuing a writ of mandamus, direct a secured creditor to positively grant benefit of one-time settlement to 2026:JHHC:16347 Page | 3 a defaulting borrower. Paragraph Nos.12 to 14 of the Judgment reads as under: “12. Even otherwise, as observed hereinabove, no borrower can, as a matter of right, pray for grant of benefit of one-time settlement scheme. In a given case, it may happen that a person would borrow a huge amount, for example, Rs 100 crores. After availing the loan, he may deliberately not pay any amount towards instalments, though able to make the payment. He would wait for the OTS scheme and then pray for grant of benefit under the OTS scheme under which, always a lesser amount than the amount due and payable under the loan account will have to be paid. This, despite there being all possibility for recovery of the entire loan amount which can be realised by selling the mortgaged/secured properties. If it is held that the borrower can still, as a matter of right, pray for benefit under the OTS scheme, in that case, it would be giving a premium to a dishonest borrower, who, despite the fact that he is able to make the payment and the fact that the bank is able to recover the entire loan amount even by selling the mortgaged/secured properties, either from the borrower and/or guarantor. This is because under the OTS scheme a debtor has to pay a lesser amount than the actual amount due and payable under the loan account. Such cannot be the intention of the bank while offering OTS scheme and that cannot be the purpose of the scheme which may encourage such a dishonesty. 13. If a prayer is entertained on the part of the defaulting unit/person to compel or direct the financial corporation/bank to enter into a one-time settlement on the terms proposed by it/him, then every defaulting unit/person which/who is capable of paying its/his dues as per the terms of the agreement entered into by it/him would like to get one- time settlement in its/his favour. Who would not like to get his liability reduced and pay lesser amount than the amount he/she is liable to pay under the loan account? In the present case, it is noted that the original writ petitioner and her husband are making the payments regularly in two other loan accounts and those accounts are regularised. Meaning thereby, they have the capacity to make the payment even with respect to the present loan account and despite the said fact, not a single amount/instalment has been paid in the present loan account for which original petitioner is praying for the benefit under the OTS Scheme. 14. The sum and substance of the aforesaid discussion would be that no writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India, directing a financial institution/bank to positively grant the benefit of OTS to a borrower. The grant of benefit under the OTS is always subject to the eligibility criteria mentioned under the OTS scheme and the guidelines issued from time-to-time. If the bank/financial institution is of the opinion that the loanee has the capacity to make the payment and/or that the bank/financial institution is able to recover the entire loan amount even by auctioning the mortgaged property/secured property, either from the loanee and/or guarantor, the bank would be justified in refusing to grant the benefit under the OTS scheme. Ultimately, such a decision should be left to the commercial wisdom of the bank whose amount is involved and it is always to be presumed that the financial institution/bank shall take a prudent decision whether to grant the 2026:JHHC:16347 Page | 4 benefit or not under the OTS scheme, having regard to the public interest involved and having regard to the factors which are narrated hereinabove.” 6. Considering the judgment of the Hon’ble Supreme Court and the facts of this case, I am of the view that this court cannot issue writ of mandamus in exercise of powers conferred under Article 226 of the Constitution of India, directing a financial institution/bank to grant the benefit of OTS to a borrower-petitioner. The unsigned letter obtained by the petitioner from the bank on the offer of the petitioner has got no relevance. The petitioner cannot take benefit of the same. Further, the bonafide of the said letter can be questioned as against due of Rs.1,53,20,047.56p, the offer of settlement is Rs.3,45,000/- in one account and in another is Rs.1,60,000/- for Rs.1,69,75,426.14/-. In the absence of any final approval or signed sanction letter issued by the competent higher authority of the bank, no one time settlement can be said to have come into existence. The bank is entitled to recover its outstanding dues through the recovery mechanism available under law. Thus, the recovery authorities are empowered to take appropriate measures and recover the entire amount. 7. Accordingly, the writ petition is dismissed. (ANANDA SEN, J.) 08th June, 2026 S.K.D./CP-2 A.F.R. Uploaded on 17.06.2026