Cuttack: The Orissa High Court has declined to interfere in the loan recovery process undertaken by the State Bank of India (SBI). The court emphasized the importance of judicial restraint to ensure the stability of the credit system.
Justice S.K. Panigrahi, presiding over the case, stated that courts should avoid intervening in financial matters where banks have acted within the legal framework. The judgment was delivered while dismissing a petition challenging the cancellation of a one-time settlement (OTS) scheme by SBI.
“In the present case, where the petitioner failed to honour the terms of the OTS scheme, this court is of the view that judicial intervention would set an undesirable precedent, discourage fiscal discipline and hinder effective debt recovery mechanisms. Consequently, no interference is warranted in this matter,” Justice Panigrahi observed.
According to the case diary, the petitioner from Udala in Mayurbhanj district had availed cash loan and a car loan in 2013 and 2019 respectively from the State Bank of India (SBI). Both the loans became non-performing assets (NPA) due to delay in payment of installments.
In addition, the petitioner’s son had also availed an education loan, for which he stood as guarantor. That account too was declared as NPA.
Under OTS, the petitioner was to pay Rs 60L in three equal installments of Rs 20L each. The bank cancelled the sanctioned settlement under OTS after the petitioner failed to pay the Rs 60L by the stipulated date.
Taking into consideration the facts of the case, the court said, “It is abundantly clear that the petitioner has no legal right to seek an extension of the deadline for settlement, particularly when the bank has already extended significant concessions to settle the NPA account.”
