Summary: The Bombay High Court dismissed Archana Wani's petition against Indian Bank, which refused to accept a One Time Settlement (OTS) for a loan that wasn't paid back. The court agreed with the bank, highlighting the importance of handling public money responsibly and sticking to agreements.
Archana Wani, a leader and owner of N. Kumar Housing and Infrastructure, took Indian Bank to court. The bank had given a loan of ₹62 crores to Poonam Resorts Ltd. for building a project. When the loan wasn't paid back, it was labeled as a bad loan in 2017.
The bank started legal steps under a specific law to get back the money. They also went to special courts focused on recovering debts and handling company law issues. Archana Wani claimed the bank was acting like a private lender and turned down several settlement offers without explaining why.
The court, led by Judges Rajnish R. Vyas and Anil S. Kilor, looked into whether the bank had to accept the settlement offers. The bank argued that agreeing to the settlement would mean changing the original agreement and wasn't in the public's interest.
"The bank deals with public money, and therefore, asking it to settle the account by accepting OTS would not be in the interest of public at large."
The court found no rule that required the bank to show how they decide on settlement offers. It stressed that the bank's refusal wasn't random, and the court couldn't force the bank to accept the settlement.
The petition was dismissed, and the court said it wasn't right to use its power to force the bank into accepting the settlement. They allowed a temporary pause on further action for six more weeks to let Wani consider other legal options.
"No order can be given by the High Court forcing a bank to give the benefit of a settlement to a borrower."
This decision highlights the importance of sticking to agreements and the freedom banks have in managing public money.
