The Supreme Court in the case State Bank of India v Arvindra Electronics Pvt Ltd observed weather under Article 226 the High Court can can extend the time period mentioned in the One Time Settlement (“OTS”) even when under the OTS a specific time limit was fixed and concession was granted.
Case before the Punjab and Harayana High Court:
The Court observed that the deadline fixed in the OTS sanction letter is sacrosanct and cannot be extended by the Bank for any reason whatsoever. Thereafter the court set aside the rejection letter Annexure P1 dt.16.5.2018 issued by the respondent refusing to grant time to petitioner to comply with the terms of the OTS.
The Court referred to the case in Anu Bhalla and another Vs. District Magistrate , Pathankot while refering to the ratio of the case and exercising the jurisdiction under Article 226 of the Constitution of India specifically the Division Bench held that the High Courts would have the jurisdiction to extend the period of settlement as originally provided for in OTS letter but in the Sardar Associates Vs. Punjab and Sind Bank, the High Court laid down the certain guidelines which needs to be followed.
seeking issuance of a writ of certiorari for quashing communication dated 16.05.2022 Arvindra Electronics had approached the High Court by which the Bank had declined the petitioner’s request to grant a further time beyond stipulated date of 21.05.2018 for making repayment of balance amount of `2.52 Crores (alongwith interest on Bank rate) out of total One Time Settlement amount of `10.54 Crores.
The bench observed that For Consideration of this court The question before the court is weather in exercise of powers under Article 226 of the Constitution of India, the High Court can extend the time period mentioned in the One Time Settlement (OTS) when under the OTS a specific time- limit was fixed by the court and the concession was given and the amount due and payable was reduced substantially and on 12.08.2022, the bench issued the notice and the same is returnable.
The bench comprising of Justice MR Shah and the justice BV Nagarathna observed and contended order dated March 10, 2022 the bench agreed to examine the question while considering a Special Leave Petition assailing Punjab and Haryana High Courts.