Excelsior Correspondent
Srinagar, Apr 26: The High Court today while upholding the One-time Settlement (OTS) Scheme introduced by the Jammu & Kashmir Bank (JKB) for liquidation of outstanding loan for its borrowers dismissed the plea of a borrower challenging the Scheme by recording that the same is non-discretionary and non-discriminatory in nature.
The petitioner-Ghulam Ahmad Mir (borrower of the bank) challenged Special OTS Scheme, 2022, floated by the Bank to the extent it excludes the cases where compromise is under process and the offer amount is on higher side visà-a-vis the OTS amount prescribed under the said scheme.
He was seeking direction upon the bank that his case be processed and settled with regard to his financial outstandings in terms of the Scheme of 2022 not to give effect to the communication whereby he has been informed by the bank that his case is not eligible under the One-time Settlement Scheme of 2022 guidelines.
His case before the court is that he had obtained a composite loan facility from the respondent Bank in the aggregate amount of Rs 9,24,35,000. The loan was secured against hypothecation of furniture and fixture etc. and collateral security of mortgage of land measuring three kanals along with a double storeyed residential house standing in the name of Shafeeqa.
It has been submitted that the loan facility extended to the petitioner has been classified as a Non-performing Asset on 31.12.2019 and a notice dated 01.07.2021 under Section 13(2) of the SARFAESI Act stands issued by the respondents against the petitioner.
He has challenged the aforesaid covenant of the Scheme, whereby his case has been found to be ineligible, on the grounds that the same is arbitrary in nature being against public policy declared by Reserve Bank of India. It has been submitted that by such an act of the respondent Bank, an honest borrower has been subjected to hostile discrimination.
Justice Sanjay Dhar after having perusal of the OTS Scheme dismissed the plea of the petitioner-borrower by recording that the same is non-discretionary and non-discriminatory in nature. “….. the scheme is applicable to all NPAs with NPA balance from Rs.15.00 lacs to Rs.10.00 crores as on 30th June, 2022. However, the scheme excludes certain categories of cases”, the Court said.
It said, a financial institution like the respondent Bank would be well within its jurisdiction to exclude a particular class of borrowers from a scheme in the interests of its financial health and a banking company is free to make policies and issue guidelines so as to differentiate the cases of those borrowers where the chances of recovery are bright from those, where the chances of recovery are bleak.
The OTS schemes court said, offered by the banks in accordance with the guidelines of the Reserve Bank of India are in nature of concessions offered to defaulting borrowers with an aim to recover the dues from the borrowers whose accounts have been rendered as Non-performing Assets.
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