Case Note & Summary
The petitioners, borrowers of the respondent bank, challenged the order dated 22.09.2022 passed by the Debt Recovery Tribunal-I, Bangalore in Diary No.1985/2019 and the order dated 03.06.2019 passed by the 24th Addl. Chief Metropolitan Magistrate, Bangalore in Crl.Mis.No.04/2019. They also sought a direction to the respondent bank to adhere to a One Time Settlement (OTS) dated 25.09.2019. The High Court of Karnataka, after hearing the parties, dismissed the writ petition. The court held that the OTS proposal submitted by the petitioners was merely an offer which was not accepted by the bank, and therefore no binding contract came into existence. The bank's rejection of the OTS was valid. Consequently, the orders of the DRT and the Magistrate were upheld. The court found no merit in the petition and dismissed it with no order as to costs.
Headnote
A) Debt Recovery - One Time Settlement - Binding Contract - Offer and Acceptance - SARFAESI Act, 2002 - Petitioners submitted OTS proposal which was not accepted by the bank - Held that mere submission of OTS does not create a binding contract; bank's rejection was valid and DRT order upheld (Paras 1-5).
Issue of Consideration
Whether the One Time Settlement (OTS) proposal submitted by the petitioners was binding on the respondent bank and whether the orders passed by the Debt Recovery Tribunal and the Chief Metropolitan Magistrate were liable to be quashed.
Final Decision
Writ petition dismissed. No order as to costs.
Law Points
- One Time Settlement
- Binding Contract
- Offer and Acceptance
- SARFAESI Act
- Debt Recovery Tribunal
- Writ Jurisdiction
- Alternative Remedy
Case Details
WP No. 21349 of 2022 (GM-DRT)
D.R. Ravishankar (Senior Counsel for petitioners), Prashant L. Kanal (Advocate for petitioners), M.S. Suryanarayan Rao (Advocate for respondent), K. Nagaraj (Advocate for respondent), B.S. Shreyas (Advocate for R2)
H.V. Gopal, H.V. Suresh, H.V. Nagarathna, H.V. Nirmala
The Bangalore Souhardha Central Co-operative Bank Ltd., now called as The Shamrao Vithal Co-operative Bank Ltd.
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging orders of Debt Recovery Tribunal and Chief Metropolitan Magistrate, and seeking direction to adhere to One Time Settlement.
Remedy Sought
Petitioners sought quashing of DRT order dated 22.09.2022 and Magistrate order dated 03.06.2019, and direction to bank to adhere to OTS dated 25.09.2019.
Filing Reason
Petitioners challenged the orders passed by DRT and Magistrate in connection with recovery proceedings initiated by the respondent bank.
Previous Decisions
Debt Recovery Tribunal-I, Bangalore passed order dated 22.09.2022 in Diary No.1985/2019; 24th Addl. Chief Metropolitan Magistrate, Bangalore passed order dated 03.06.2019 in Crl.Mis.No.04/2019.
Issues
Whether the One Time Settlement proposal was binding on the bank?
Whether the orders of DRT and Magistrate are liable to be quashed?
Submissions/Arguments
Petitioners argued that the bank had agreed to the OTS and should be directed to adhere to it.
Respondent bank contended that the OTS was not accepted and therefore not binding.
Ratio Decidendi
Mere submission of a One Time Settlement proposal does not create a binding contract unless accepted by the bank. The bank's rejection of the OTS was valid, and the orders of DRT and Magistrate were upheld.
Judgment Excerpts
In this petition, petitioners have sought for the following reliefs: ...
This petition, coming on for preliminary hearing, this day, the court made the following: ORDER
Procedural History
Petitioners filed writ petition under Articles 226 and 227 of Constitution of India challenging DRT order dated 22.09.2022 and Magistrate order dated 03.06.2019. The High Court dismissed the petition.
Acts & Sections
- Constitution of India: Articles 226, 227
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002:
