Widow and minor children of a deceased lessee challenged the bank's rejection of their application under the SBI OTS Scheme 2021. The court held clauses 2.1(a)(iv) and 2.1(a)(v) barred accounts of units in liquidation or with DRT decrees, and the petitioners being third parties were ineligible; the writ petition was dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 02-03-2026
CORAM
THE HON'BLE MR JUSTICE KRISHNAN RAMASAMY WP No. 2885 of 2022 and WMP.Nos.3009, 3011 and 3012 of 2022
1.M.Sailaja W/o. Late Mr.M. Lakshmi Narayana Choudhary,
2.Selvi. M.Niyathi Raam Choudhary D/o. Late Mr.M. Lakshmi Narayana Choudhary, Minor, Rep. by their Mother and sole surviving natural Guardian 1st Petitioner.
3.Selvan M.Nihar Mohan Choudhary S/o. Late Mr.M. Lakshmi Narayana Choudhary, Minor, Rep. by their Mother and sole surviving natural Guardian 1st Petitioner.
..Petitioners
Vs
State Bank of India, Commercial Branch, represented by its Assistant General Manager, Stressed Assets Recovery Branch, Red Cross Building, II Floor, No.32, Montieth Road, Egmore, Chennai-600 008.
..Respondent
Prayer: Writ Petition filed under Article 226 of Constitution of India seeking for issuance of Writ of Certiorarified Mandamus calling for the records of the Respondents order dated 27.01.2022 in Ref. No. SARB / AJI / 589 to quash the same and consequently direct the appropriate authority of the respondent bank to favourably
consider the petitioner’s application dated 15.01.2022 under clause 12(a) at Page No.12 of the respondents SBI OTS Scheme 2021.
For Petitioner: Mr.B.Ravi Raja
For Respondent: Mr.C.Mohan and Ms.A.Rexy Josephine Mary for M/s.King and Patridge
ORDER
This Writ Petition has been filed challenging the order of the Respondents dated 27.01.2022 in Ref. No. SARB / AJI / 589 and to quash the same and consequently direct the appropriate authority of the respondent bank to favourably consider the petitioner’s application dated 15.01.2022 under clause 12(a) at Page No.12 of the respondents SBI OTS Scheme 2021.
2 . The case of the petitioner in the nutshell is as follows:
(i) The Petitioners are the widow and minor twin children of late Mr.Lakshmi Narayana Choudhary, who unfortunately purchased the lease hold rights of 354 sq.f.t. of specified land area at No.672/476, Anna Salai, Chennai from a Company viz., Sethuram Thyagarajan Engineers Pvt. Ltd., (STEPL). He also caused to be put up a entire superstructure on the 5th floor admeasuring about 3600 sq.feet in an office complex known as Temple Towers. It comprised of a single module with a single entry and exit and all the toilets and wash rooms are situated on one side only.
(ii) It is further stated that the aforesaid M/s.Sethuram Thyagarajan Engineers
Pvt. Ltd. faced winding up proceedings and was ultimately ordered to be wound up in
10.12.1999. The Respondent-Bank had filed a Civil Suit before this Court for recovery of its dues from STEPL and the said Suit later came to be transferred to the Debt Recovery Tribunal at Chennai which passed a decree erroneously on the aforesaid office premises without notice to late Lakshmi Narayana Choudhary. The Respondent-Bank staked a claim based on the order of the DRT-I, Chennai, wherein the lease hold right of the 99 years was said to be mortgaged to the said Bank. Admittedly the original title deed evidencing the lease is not with the Respondent Bank and is now not traceable.
(iii) The Petitioners filed C.A.No.125 of 2011 in C.P.No.103 of 1993 before this Court for validation of the transfer of the lease hold right which took place during the winding up proceedings. The same was disallowed and the appeal filed against the said order in OSA.No.222 of 2013 was also dismissed by order dated 19.03.2020.
(iv) In order to buy peace, the 1st petitioner made several offers to the Respondent Bank. However, the officers of the Respondent-Bank though purportedly wanted to recover some amounts for the Bank could not consent for any viable and amicable settlement. The Respondent-Bank has admitted the existence of private property within the single module.
(v) That by circular dated 15.01.2022 the Respondent-Bank has come out with the present SBI OTS 2021 scheme. The scheme mentions how even “ineligible borrowers” can be considered by the appropriate authority at page No.12 clause 12(a) of the SBI OTS Scheme 2021. Therefore, the petitioner on behalf of the estate of late M.Lakshmi Narayana Choudhary approached the Respondent- Bank by letter dated 15.01.2022 along with cheque dated 15.01.2022 for a sum of Rs.4,52,116/-(which being 10% of the outstanding amount of Rs.49,21,160/-) to avail the scheme and retain the property in memory of late M.Lakhsmi Narayana Choudhary. The Respondent-Bank vide letter dated 27.01.2022 rejected the same by stating that under Clause 2.1(a)(iv) of the OTS scheme, units under liquidation will not be eligible and therefore the borrower company which is under liquidation cannot be covered under the scheme. That apart as per Clause 2.1.(a)(v) of the said Scheme, Units where the decree awarded by DRT will not be eligible. Challenging the said order, the present writ petition has been filed by the Petitioners.
be eligible under SBI OTS Scheme 2021 and the said clause is not applicable to the petitioners as there is no possibility of an order of winding up against the petitioners who are individuals and not corporate entities. He further contended that impugned order came to be passed citing untenable reasons and therefore the same is liable to be set aside.
4.1. She would further submit that Clause 12(a) of the said scheme states that if the borrowal accounts is not eligible for settlement under OTS Scheme 2021, the same can be considered under the Banks extant policy, In this regard, the Bank's extant compromise policy is advised under circular dated 18.01.2020, whereby under Clause(xiii) it has been clearly stated that the operating units/branches are advised to
deal directly with the borrowers/guarantors only for the settlement of dues through compromise and the 3rd parties should not be entertained and involved in this process and therefore the Respondent-Bank has rightly rejected the application of the petitioner. She therefore prays for dismissal of this Writ Petition.
30.01.1997. Therefore, there is no legal sanctity on the aforesaid Deed. Subsequently, the said company went into liquidation on 10.12.1999. Therefore, as rightly contended by the learned counsel for the Respondent-Bank, the Petitioners are neither borrowers nor guarantors and is not entitled to claim the benefit of OTS Scheme.
hereunder:
“ 12.a. In respect of borrowal accounts, ineligible for settlement under SBI OTS SCHME 2021, the approval for compromises will continue to be accorded by the Appropriate Authority as per the Bank’s extant policy.”
bar. For the sake of convenience, it would be relevant to extract the aforesaid clauses
2.1. Cases not eligible to be covered under the scheme.
a(i)……….. (ii)…….. (iii)…….. (iv) Units under Liquidation will not be eligible. (v) Units where Decree awarded by DRT will not be eligible.
petition is ordered subject to payment of separate court fee.
02-03-2026
Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No arr
Note : Issue order copy only after ensuring the payment of court fee as ordered by this Court.
To
State Bank of India,
Commercial Branch, represented by its Assistant General Manager, Stressed Assets Recovery Branch, Red Cross Building, II Floor, No.32, Montieth Road, Egmore,
Chennai-600 008.
KRISHNAN RAMASAMY, J.
arr
WP No. 2885 of 2022
02-03-2026
1 issue framed by the court
Whether the petitioners, being neither borrowers nor guarantors and third parties to a company under liquidation, were entitled to benefit under the SBI OTS Scheme 2021 including clause 12(a).
1 provisions across 1 enactments
M.Sailaja
Selvi. M.Niyathi Raam Choudhary
Selvan M.Nihar Mohan Choudhary
State Bank of India, Commercial Branch, represented by its Assistant General Manager, Stressed Assets Recovery Branch, Chennai-600 008
Krishnan Ramasamy
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
