HC requests SBI to reconsider OTS terms on accounting for disruption of normal life owing to pandemic

The Madras High court has urged the State Bank of India to consider whether it can give some more time for those who could not pay some of the installments, as per the One Time Settlement (OTS) scheme, due to disruption of normal life during the pandemic.

The first bench comprising Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy disposed of a couple of pleas by requesting the State Bank to re-consider its stand on enlarging across the board the obligation to make further payments in terms of the OTS so that the petitioners and all other similarly placed persons may avail of such benefit.

“There is no doubt that the pandemic caused complete disruption of normal life and businesses were the hardest hit,” the bench stressed.

Also, seeking the State Bank to communicate its fresh decision on the petitioners' request within four weeks from date, the bench held “It is needless to say that if the petitioners are shown any lenience, the similar benefit should be passed on to other similarly placed constituents of State Bank.” Based on this, the bench also sought SBI to not take any precipitous action against the petitioners for six weeks till the petitioners have sufficient time after the receipt of the bank's decision on re-considering the matter.

However, the bench also clarified that the court cannot come to the assistance of the petitioners, however sympathetic the court may be in recognising the plight of business entities in the wake of the lockdowns imposed pursuant to the second surge of the pandemic.

“For one, OTS terms are offered to similarly placed constituents and there can be no good ground as to why the terms should be relaxed for one constituent simply because such constituent has come to court or has the ability to come to court. Secondly, there is no element of public interest involved in such matter particularly since the contract pertaining to the credit facilities and the OTS terms are private agreements made between two parties, and the status of the bank as a nationalized bank has nothing to do with the terms of the contracts,” the bench held.