In Brief
State Bank of India challenged a High Court order extending the payment deadline for a borrower's One-Time Settlement (OTS) obligation by six weeks beyond the sanctioned period. The borrower, Arvindra Electronics, had agreed to settle its debt under an OTS letter dated 21 September 2017, requiring full payment by 21 May 2018. The borrower sought a nine-month extension, which the bank rejected. The Supreme Court held that a borrower cannot claim OTS benefits or extended payment timelines as a matter of right. The High Court has no power under Article 226 to modify contractual payment terms; such modification requires mutual consent under the Indian Contract Act. The Court distinguished and did not follow the earlier Sardar Associates decision, instead relying on the subsequent Bijnor Urban Cooperative Bank judgment. The appeal was allowed and the writ petition dismissed.
The lawyer headnote and full judgment text are available to registered users.