2026:JHHC:17385 1 IN THE HIGH COURT OF JHARKHAND AT RANCHI WP(C) No.4072 of 2026 ----- 1.Nayeemuddin Ansari, S/o Shaikh Manir, R/o Tipu Road, near Badi Talab, Po Chitarpur, PS and District Ramgarh, Jharkhand 2.Naibun Nisha, w/o Shaikh Manir, R/O Tipu Road, near Badi Talab, PO Chitarpur, PS and District Ramgarh, Jharkhand … Petitioner(s). Versus 1.Branch Manager, Punjab National Bank, Indrapuri Chowk, Shiv Shopping Center, PO Head Post Office, PS Sadar Police Station, Hazaribagh, Jharkhand 2.General Manager, Punjab National Bank, Circle Office, Sector-IV, Bokaro, PO and PS Sector IV, Bokaro, Jharkhand … Respondent(s). CORAM : SRI ANANDA SEN, J. ------ For the Petitioner(s) : Mr. Avishek Prasad, Advocate For the Bank : Mr. P.A.S. Pati, Advocate …...... 02 /16.06.2026: Heard the learned counsel representing the petitioner and the learned counsel representing the respondent-Bank. 2. The petitioner prays for Mandamus directing the Bank to settle the loan account of the petitioner, which is maintained by the Punjab National Bank, a Settlement Scheme which the petitioner has offered. 3. Admittedly the petitioner is a borrower and there is balance dues outstanding. The petitioner is admittedly a defaulter. The petitioner on one ground or another has stated that now he is not in a position to repay the entire amount demanded by the Bank, thus, his account be settled in terms of an offer which the petitioner has offered as one time settlement. It is also his case that in respect of one borrower the respondent-Bank has accepted the One-Time Settlement Scheme and liquidate the dues. 4. One-Time Settlement Scheme is an agreement between the Bank and the borrower. The offer has to come from the bank 2026:JHHC:17385 2 and not from the borrower. Borrower needs to accept the said offer which the bank offers him. This type of arrangement is not statutory arrangement but normally adopted by the Banks in normal course of banking business. 5. Since this agreement is not a statutory agreement, the Court cannot exercise jurisdiction under Article 226 of the Constitution and issue Mandamus to the banks to settle any loan account under One-Time Settlement Scheme. 6. In this context the Hon’ble Supreme Court in the case of “SBI vs. Arvindra Electronics (P) Ltd.”, reported in 2023(1) SCC 540 has decided the law and held as under: “15. In Meenal Agarwal [Bijnor Urban Coop. Bank Ltd. v. Meenal Agarwal, (2023) 2 SCC 805 : 2021 SCC OnLine SC 1255] this Court answered the following two questions : (SCC para 6) “6.1. (i) Whether benefit under the OTS Scheme can be prayed as a matter of right? 6.2. (ii) Whether the High Court in exercise of powers under Article 226 of the Constitution of India can issue a writ of mandamus directing the Bank to positively consider the grant of benefit under the OTS Scheme and that too dehors the eligibility criteria mentioned under the OTS Scheme?” 16. On a detailed analysis of the OTS Scheme, it is observed and held by this Court in Meenal Agarwal [Bijnor Urban Coop. Bank Ltd. v. Meenal Agarwal, (2023) 2 SCC 805 : 2021 SCC OnLine SC 1255] that: (i) No borrower can, as a matter of right pray for a grant for the benefit of One-Time Settlement scheme; (ii) No writ of mandamus can be issued by the High Court in exercise of Article 226 of the Constitution of India, directing the financial institution/bank to positively grant a benefit of OTS to a borrower; (iii) The grant of benefit of OTS Scheme is subject to the eligibility criteria and the guidelines issued from time to time. 22. Even otherwise as rightly submitted on behalf of the Bank directing the Bank to reschedule the payment under OTS would tantamount to modification of the contract which can be done by mutual consent under Section 62 of the Contract Act. By the impugned judgment and order rescheduling the payment under the OTS Scheme and granting extension of time would tantamount to rewriting the contract which is not permissible while exercising the powers under Article 226 of the Constitution of India.” 7. The Hon’ble Supreme Court in the case of “Bijnor Urban 2026:JHHC:17385 3 Cooperative Bank Limited, Bijnor and Others vs. Meenal Agarwal and Others” reported in (2023) 2 SCC 805 has held 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 2026:JHHC:17385 4 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 benefit or not under the OTS scheme, having regard to the public interest involved and having regard to the factors which are narrated hereinabove.” 8. Considering what has been discussed above and the law laid down by the Hon’ble Supreme Court in the cases of “Arvindra Electronics (P) Ltd.” (supra) and “Bijnor Urban Cooperative Bank Limited” (supra), I find no merit in the prayer made in this writ petition. 9. So far as acceptance of One-Time Settlement offer in respect of some other borrowers is concerned, the same cannot be taken to be a precedent. The bank is not bound by the same. 10. A Bank cannot be forced to accept the amount which the petitioner wants to deposit for settlement of the account, more so, when the amount is not equal to the balance amount outstanding. 11. Considering what has been held above, this writ petition is dismissed. (ANANDA SEN, J.) 16.06.2026 Tanuj/CP-2 Uploaded on 23.06.2026