[Article 226] Writ Courts Can't Command Banks To Not Cancel One Time Settlement Facility Granted To Customers: Kerala High Court
The Kerala High Court has held that a party cannot invoke the writ jurisdiction under Article 226 of the Constitution to seek a direction to a bank not to cancel the OTS (One Time Settlement) facility granted to it.The appellant had approached the Single Bench seeking a writ of mandamus against Indian Overseas Bank not to cancel the OTS facility and to consider favourably their request to...
The Kerala High Court has held that a party cannot invoke the writ jurisdiction under Article 226 of the Constitution to seek a direction to a bank not to cancel the OTS (One Time Settlement) facility granted to it.
The appellant had approached the Single Bench seeking a writ of mandamus against Indian Overseas Bank not to cancel the OTS facility and to consider favourably their request to extend the timeline granted in the facility.
The writ petition was disposed of directing the bank to communicate the decision in the request within a week. Aggrieved, the writ appeal was filed.
The Division Bench of Justices Anil K. Narendran and Muralee Krishna S. relied on the settled positions of law laid down by the Supreme Court in South Indian Bank Ltd. v. Naveen Mathew, Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, Varimadugu Obi Reddy v. B. Sreenivasulu, State Bank of India v. Arvindra Electronics Pvt. Ltd., Bijnor Urban Cooperative Bank Limited v. Meenal Agarwal.
Reiterating the dictum laid down in the decisions, the Court opined that a writ for keeping in abeyance coercive steps against secured assets is not maintainable and that directing a bank to reschedule payment under OTS would amount to modification of the contract entered into between the bank and its customer.
Thus, the Division Bench dismissed the writ appeal.
Case No: WA No. 2095 of 2025
Case Title: M/s Classic Agencies and Ors. v. The Regional Office, India Overseas Bank and Ors.
Citation: 2025 LiveLaw (Ker) 553
Counsel for the appellants: Dhananjay Deepak
Counsel for the respondents: Sunil Shankar – SC – Indian Overseas Bank