- 1 - HC-KAR NC: 2026:KHC:21344 WP No. 20391 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF APRIL, 2026 BEFORE THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI WRIT PETITION NO. 20391 OF 2025 (GM-DRT) BETWEEN: 1. SRI. B M RAMACHANDRAIAH S/O. B.L.MALLAPPA, AGED ABOUT 76 YEARS 2. SMT. SHARADAMMA @ SHIVAMMA, W/O. SRI. B.M. RAMACHANDRAIAH, AGED ABOUT 74 YEARS 3. SMT. B.R.VISHWANATHA, S/O. SRI. B.M. RAMACHANDRAIAH, AGED ABOUT 42 YEARS, ALL ARE RESIDING AT M.G.ROAD, KOLLUR NEW BADAVANE, NEAR VENKATESHWARA KALYANA MANTAPA SRINIVASAPURA TOWN, KOLAR DISTRICT-563 135. …PETITIONERS (BY SRI. ZULFIKIR KUMAR SHAFI, ADVOCATE) AND: THE CANARA BANK REPRESENTED BY ITS CHIEF MANAGER HI-TECH AGRICULTURAL FINANCE BRANCH SITUATED AT M BLOCK, UNITY BUILDING, J.C. ROAD, BENGALURU-560 002 …RESPONDENT (BY SRI. VIGNESH SHETTY, ADVOCATE) Digitally signed by SUVARNA T Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:21344 WP No. 20391 of 2025 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI OR ANY OTHER WRIT OF ORDER TO QUASH THE LETTER DATED 24.02.2025 VIDE REFERENCE NO.2356/OTS/AF/SP/2024 UNDER ANNEXURE-J ISSUED BY THE RESPONDENT BANK, WITHDRAWING THE OTS SANCTION DATED 20.09.2024 ISSUED IN FAVOUR OF THE PETITIONERS. THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI ORAL ORDER The present writ petition is filed seeking the following prayer. “Wherefore, this Hon’ble Court be pleased to: a) Issue a writ of certiorari or any other writ or order to quash the letter dated 24.02.2025 vide reference No.2356/OTS/AF/SP/2024 under Annexure-J issued by the Respondent Bank, withdrawing the OTS sanction dated 20.09.2024 issued in favour of the petitioners. b) Issue a writ or a direction in the nature of mandamus directing the respondent bank to revive the OTS letter dated 20.09.2024 vide reference No.2366/OTS/AF/SP/2024 under Annexure-G and grant reasonable time to pay the remaining amount of Rs.7,35,00,000/- (Rupees Seven Crore Thirty Five Lakhs Only) to the respondent bank. - 3 - HC-KAR NC: 2026:KHC:21344 WP No. 20391 of 2025 c) Issue a writ or a direction, directing the respondents to release the commercial properties from the mortgage in favour of the petitioners as against the payment of Rs.5,40,00,000/- (Rupees Five Crore Forty Lakhs Only) already made under the OTS scheme and allow the petitioner to pay remaining amount of Rs.7,35,00,000/- (Rupees Seven Crore Thirty Five Lakhs Only) to the respondent bank. d) To pass any other suitable order as this Court deems fit and proper in the circumstances and in the interest of justice and equity.” 2. Learned counsel appearing for the petitioners submits that the petitioners, pursuant to the OTS letter dated 20.09.2024 have already paid an amount of Rs.5,40,00,000/-. As they could not mobilize the remaining amount, they could not pay the same. It is submitted by the learned counsel that as per the letter dated 20.09.2024, basing on the payments, the commercial properties which are mortgaged will be released and they have already paid an amount of Rs.5,40,00,000/-. If the said property is released, they would be in a position to sell the property and pay the entire outstanding amount. It is submitted that in the Lok-Adalath for negotiations, the Bank is not coming forward. Hence they seek a direction to the Bank. - 4 - HC-KAR NC: 2026:KHC:21344 WP No. 20391 of 2025 3. Learned counsel appearing for the respondent/Bank submits that when the petitioners have failed to honour the OTS letter dated 20.09.2024, as per that, they have to pay the entire amount by 20.12.2024. The Bank in fact has waited till 24.02.2025 and thereafter they have cancelled the proposal earlier given to the petitioner. It is submitted that the Bank has accommodated the petitioners and later cancelled the proposal. It is submitted that this Court may not pass an order as sought for by the petitioners in the light of the law laid down by the Hon’ble Apex Court in State Bank of India Vs. Arvindra Electronics Pvt. Ltd., arising out of Civil Appeal No.6954/2022. Learned counsel has relied on paragraph Nos.3.1 to 3.4 and 6.6, 7 and 7.1 which reads as follows: “3.1 Shri Kapur, learned counsel appearing on behalf of the Bank relying upon the decision of this Court in the case of Bijnor Urban Cooperative Bank Limited, Bijnor and Others vs. Meenal Agarwal and Others, (2021) SCC Online SC 1255 has submitted that as observed and held by this Court, the grant of benefit of OTS Scheme cannot be claimed as a matter of right and shall always be subject to fulfilling the eligibility criteria mentioned in the scheme. It is submitted that in the present case the borrower was required to fulfil the terms and conditions of the OTS and was required to make the payment as per the schedule mentioned in the sanctioned letter of OTS. It is submitted that any deviation from making the payment as per the sanctioned - 5 - HC-KAR NC: 2026:KHC:21344 WP No. 20391 of 2025 OTS Scheme would render the OTS sanction infructuous, as per the sanction letter dated 21.11.2017. It is submitted that therefore the High Court in exercise of powers under Article 226 of the Constitution of India ought not to have granted any further time de hors the sanctioned scheme and/or the sanction letter dated 21.11.2017 and that too in exercise of powers under Article 226 of the Constitution of India. 3.2 It is submitted by Shri Kapur, learned counsel appearing on behalf of the Bank that the Hon’ble High Court under Article 226 of the Constitution of India cannot direct rescheduling the payment under the OTS as it amounts to modification of the contract which can be done by mutual consent under Section 62 of the Indian Contract Act. 3.3 It is submitted that the Hon’ble High Court ought to have appreciated that the OTS does not involve any public element and the OTS is/was nondiscriminatory and nondiscretionary and shall be applicable uniformly to all borrowers. 3.4 It is submitted that by the impugned judgment and order the Hon’ble High Court has rewritten the contract which is not permissible that too while exercising the powers under Article 226 of the Constitution of India. 6.6 It is required to be noted that under the OTS Scheme which was originally sanctioned in the year 2017 the borrower was required to pay Rs.10,53,75,069.74 against the outstanding of Rs.13,99,89,273.99. Therefore, under the original sanctioned OTS Scheme the borrower was getting the substantial relief of approximately 3 crores. The Bank agreed and accepted the OTS offer on the terms and conditions mentioned in the letter dated 21.11.2017. In the sanctioned letter dated 21.11.2017 it was specifically mentioned in - 6 - HC-KAR NC: 2026:KHC:21344 WP No. 20391 of 2025 Clause (iv) that the entire payment under the OTS Scheme was to be made by 21.05.2018, otherwise OTS would be rendered infructuous. Therefore, borrowers were bound to make the payment as per the sanctioned OTS Scheme. Therefore, the High Court ought not to have granted further extension de hors the sanctioned OTS Scheme while exercising the powers under Article 226 of the Constitution of India. 7. The submissions on behalf of the borrower that in case of some other borrowers the time was extended is concerned, the same is neither here nor there. The Bank mutually can agree to extend the time which is permissible under Section 62 of the 18 Indian Contract Act. The borrower as a matter of right cannot claim that though it has not made the payment as per the sanctioned OTS Scheme still it be granted further extension as a matter of right. There cannot be any negative discrimination claimed. The borrower has to establish any right in their favour to claim the extension as a matter of right. 7.1 Now so far as the reliance placed upon the decision of Punjab and Haryana High Court in the case of Anu Bhalla (supra) is concerned, in view of the direct decision of this Court in the case of Bijnor Urban Cooperative Bank Limited (supra), he decision of this Court would be binding on the High Court.” 4. In the light of the above judgment, it is submitted that there cannot be any direction from the Court exercising the jurisdiction under Article 226 of the Constitution of India and the writ petition is liable to be dismissed. - 7 - HC-KAR NC: 2026:KHC:21344 WP No. 20391 of 2025 5. Having heard the learned counsels on either side, perused the material on record. The undisputed facts of this case are that the Bank has given a One Time Settlement offer on 20.09.2024 and the petitioner has to comply with the same by 24.02.2025. Admittedly, the petitioner has not honoured the said letter. Only a part payment of an amount of Rs.5,40,00,000/-was paid. Then waiting for two months, the Bank has cancelled the offer in the month of February. This Court do not find any reasons to interfere with the same, the Bank has given an offer, which was accepted by the petitioner and the same was not honoured by the petitioner and the Bank is always at liberty to cancel the same. This Court cannot find fault with the same. Further in the light of law laid down in the State Bank of India’s case (referred supra) this Court cannot extend the time as the same is granted by the Bank as per their own commercial terms, which are viable to the parties. 6. The next submission is that there may be a direction to the Bank to release the said property. The petitioner is entitled to the release of the properties in a phased manner if they pay the amount as part OTS. When the Court is - 8 - HC-KAR NC: 2026:KHC:21344 WP No. 20391 of 2025 not finding fault with the letter, this court cannot grant any positive direction to the Bank. However, the petitioner is always at liberty to give a representation to the Bank and the Bank can consider the same in accordance with law within one week from the date of receipt of the representation. In that view of the matter, this court is passing the following: ORDER i. This Court has not inclined to interfere with the order impugned. However, liberty is given to the petitioner to give a representation to the respondent/Bank and within one week from the date of receipt of the representation, the same shall be considered by the respondent/Bank in accordance with law. ii. Accordingly, the writ petition is disposed of. iii. All pending I.As., in the writ petition shall stand closed. SD/- (LALITHA KANNEGANTI) JUDGE PKN, List No.: 1 Sl No.: 17