Borrowers Cannot Claim One-Time Settlement as Right : Bombay High Court

The Nagpur Bench of the Bombay High Court has ruled that borrowers or guarantors cannot claim a One-Time Settlement (OTS) as an enforceable right against banks.

The Court, while hearing a plea filed by the director of N Kumar Housing and Infrastructure Pvt. Ltd., upheld the Indian Bank’s decision to reject her OTS proposal.

The Court clarified that courts cannot compel banks to disclose their internal criteria or benchmarks for considering settlements, and noted that such decisions fall within the commercial discretion of banks, not judicial oversight.

[Archana Wani v Bank of India]