2026:JHHC:21563 1 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 4848 of 2024 M/s Chola Tailors, (Proprietor Md. Sarwar) S/o Late Makbul Ahmad officiated at City Centre, P.O. Sector-4, A-14, P.S. B.S, City, District Bokaro Jharkhand 827004. 2. Md. Sarwar S/o Late Makbul Ahmad, resident of House No. 4013, Sector 4/A P.O, & P.S. Bokaro Steel City District Bokaro Jharkhand presently residing at Near Oman Market, Ghous Nagar Bharra P.O. & P.S. Chas District Bokaro 827013 Jharkhand …………… Petitioner(S). Versus 1. The State of Jharkhand 2. Punjab National Bank (EW United Bank of India) through General Manager, Chas Bazar Branch P.O. & P.S. Chas District Bokaro Jharkhand. ………… Respondent(s) CORAM : SRI ANANDA SEN, J. …...... For the Petitioner(s) : Mr. S. Eqbal, Advocate For the Resp-Bank : Mr. P.A.S. Pati, Advocate …...... 09/ 20.07.2026: By way of filing this writ petition, the petitioner has sought for following reliefs - (i) Issuance of writ / writs, order/order(s), direction/directions for upon the respondent No. 2 dispose the representation letter dated 16/09/2023 and issue No due Certificate and hand over the mortgaged house cum land documents (annexure no. 3). (ii) Issuance of writ / writs, order/order(s), direction/directions to the respondent and may be pleased to stay the Proceedings in connection with R. C. Case No. 2402018 Corresponding No. O.A. Case No. 198/2017. 2. The facts of the case are that petitioner, M/s Chola Tailors, a proprietorship concern represented by its proprietor Md. Sarwar, obtained a Cash Credit/ Loan facility of Rs. 32.72 lakhs from the respondent Bank on 26.08.2014 by mortgaging his residential house and land through deposit of sale deeds. Upon default in repayment, the loan account was declared NPA on 30.06.2016, following which the Bank instituted O.A. No.198 of 2026:JHHC:21563 2 2017 before the Debts Recovery Tribunal, Ranchi for recovery of Rs.35,22,669/- together with interest. By judgment dated 11.05.2018, the DRT allowed the Original Application ex-parte and issued a Recovery Certificate in favour of the Bank. During execution proceedings in R.C. No. 240 of 2018, the dispute was referred to the National Lok Adalat where the parties arrived at a One-Time Settlement (OTS) for Rs.26,00,000/-. The petitioner paid Rs.24,00,000/- and only Rs.2,00,000/- remained outstanding. By order dated 13.08.2022, the Recovery Officer directed the petitioner to deposit the balance Rs.2,00,000/- along with Rs.1,00,000/- as delayed payment with interest by September 2022. According to the petitioner, the entire OTS amount along with the delayed payment charges was deposited, yet the Bank neither issued the No Dues Certificate nor returned the documents of the mortgaged house and land rather continued with the recovery proceedings. Consequently, the petitioner submitted a representation dated 16.09.2023, which remained undisposed of. 3. Learned counsel on behalf of the petitioner submits that after the settlement arrived at before the National Lok Adalat, the entire OTS amount together with the delayed payment interest has been deposited in compliance with the order dated 13.08.2022. Once the Bank has accepted the entire settlement amount, it cannot continue with the recovery proceedings under the Recovery Certificate, as such the said action is arbitrary, unreasonable and amounts to abuse of the recovery process. The Recovery Officer specifically observed that upon receipt of the balance amount and delayed payment interest, the Bank was expected to issue a No Due Certificate. The respondent Bank is acting contrary to the Lok Adalat settlement by refusing to do so. He further submits that the continued retention of the petitioner's 2026:JHHC:21563 3 original sale deeds despite complete payment is illegal and infringes the petitioner's proprietary rights. The continuation of R.C. No.240 of 2018 despite settlement defeats the very purpose of the One Time Settlement and the proceedings before the National Lok Adalat. 4. Learned Counsel on the behalf of Respondent-Bank submits that the writ petition is not maintainable and the petitioner has failed to establish any enforceable legal right. Although the order dated 13.08.2022 granted the petitioner time to deposit the balance Rs.2,00,000/- together with Rs.1,00,000/- as delayed payment and interest by September 2022, the petitioner admittedly failed to comply within the stipulated period. The petitioner deposited the balance amount only in March 2023, long after expiry of the period fixed by the Recovery Officer, thereby violating the terms of the One Time Settlement. He further submits that the petitioner himself approached the Recovery Officer by filing an application dated 30.06.2023 but thereafter failed to pursue the said proceedings and has suppressed these material facts before this Court. He further submits that the Bank specifically denies having realised the entire settlement amount and has produced the statement of account to demonstrate that the dues have not been fully adjusted. Since the petitioner committed default in complying with the essential terms of the OTS, no enforceable right survives to seek issuance of a No Due Certificate or release of the mortgaged documents. The respondent further submits that the Hon'ble Supreme Court has consistently held that a failed One Time Settlement cannot be revived or enforced through a writ petition, and therefore the present writ petition is misconceived. 5. After hearing both the parties and upon perusal of the records, I find that the petitioner is a borrower and upon default in repayment, the loan account was declared NPA. It is also 2026:JHHC:21563 4 admitted that the parties arrived at a One Time Settlement (OTS) for Rs.26,00,000/-. The petitioner paid Rs.24,00,000/- and only Rs.2,00,000/- remained outstanding. Although the order dated 13.08.2022 granted the petitioner time to deposit the balance Rs.2,00,000/- together with Rs.1,00,000/- as delayed payment and interest by September 2022, the petitioner admittedly failed to comply within the stipulated period. Thus admittedly, the petitioner has not honoured the OTS. 6. One Time Settlement Scheme is an agreement between the Bank and the borrower. This type of arrangement is not statutory arrangement but normally adopted by the Banks in normal course of banking business. Since, this agreement is not a statutory agreement, the Court cannot exercise jurisdiction under Article 226 of the Constitution and issue a mandamus directing a bank to extend or favourably consider extension of an OTS timeline. Such directions would amount to rewriting or modifying the contract, contrary to Section 62 of the Contract Act, 1872, which are within the domain of the bank’s commercial discretion. 7. The Hon’ble Supreme Court in “SBI vs. Arvindra Electronics (P) Ltd.”, reported in (2023) 1 SCC 540 observed that “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.” In paragraph Nos.15, 16 & 22 of the judgment the Hon’ble Supreme Court has 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 2026:JHHC:21563 5 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.” 8. In this context, the Hon’ble Supreme Court in the case of “Bijnor Urban 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. 2026:JHHC:21563 6 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 benefit or not under the OTS scheme, having regard to the public interest involved and having regard to the factors which are narrated hereinabove.” 9. In this case admittedly the petitioner defaulted in honouring the OTS scheme. When it was agreed between the parties that settlement amount as to be paid within a specified date, the petitioner had to pay the same within the deadline. Failure to make payment in entirety within the deadline will amount to failure in compliance of the agreement. Once there is failure on the part of the petitioner to adhere to the agreed timeline, the entire agreement is breached. 10. 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 2026:JHHC:21563 7 Bank Limited” (supra), I find no merit in the prayer made in this writ petition. Accordingly, this writ petition is dismissed. 11. Pending I.A.(s), if any, stands disposed of. (ANANDA SEN, J.) 20th July, 2026. RS/ SKC/-Cp2. Uploaded on: 23/07/2026. A.F.R.