Court grants extension for OTS repayment due to Covid-19 challenges

The Court allowed the petitioner to reschedule the repayment of the second installment of the One Time Settlement (OTS) agreement due to challenges posed by the Covid-19 lockdown. Despite the Bank's initial rejection, citing RBI Circulars and the pandemic's impact, the Court intervened to prevent coercive actions against the petitioner. The Court granted an extension for payment, emphasizing the need to consider the exceptional circumstances of the pandemic and ensuring compliance with the revised repayment schedule to avoid coercive measures by the Bank.

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Issues:
1. One Time Settlement (OTS) agreement terms and default in repayment.
2. Impact of Covid-19 lockdown on repayment schedule.
3. Request for rescheduling repayment based on RBI Circulars.
4. Court intervention due to pandemic situation.

Analysis:
1. The petitioner had entered into a One Time Settlement (OTS) agreement with the respondent-Bank due to defaults in repayment. The terms of the OTS included a total payable amount, appropriation of the application money, and installment payment deadlines. The petitioner paid the first installment but faced challenges in paying the second installment of a significant amount due to the Covid-19 lockdown.

2. The Bank directed the petitioner to deposit the second installment by a specific date to keep the OTS valid. However, due to the lockdown and restrictions, the petitioner requested an extension to make the payment, citing the impact of the pandemic on his ability to meet the deadline. The petitioner referred to RBI Circulars allowing repayment rescheduling and moratorium due to Covid-19.

3. Despite the petitioner's commitment to pay the pending installments by specific dates, the Bank rejected the request for an extension. In light of the Covid-19 situation and RBI Circulars, the petitioner sought the Court's intervention to allow him to make the payments at a later date without facing coercive actions from the Bank. The Court considered the exceptional circumstances and agreed that coercive actions should be avoided during the pandemic.

4. The Court, acknowledging the unprecedented situation created by the pandemic, decided that if the petitioner makes the second installment payment by the revised date as proposed in his email, the Bank should not take any coercive actions against him. The Court scheduled a follow-up date for the petitioner to provide proof of payment, ensuring compliance with the revised repayment schedule. This intervention aimed to balance the interests of both parties in light of the extraordinary circumstances caused by the Covid-19 pandemic.

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