Assistant General Manager State Bank of India & Anr. Vs Tanya Energy Enterprises (Supreme Court of India)
No Upfront Payment, No OTS – Apex Court Favors SBI in ₹7 Cr Recovery Dispute- Borrower’s OTS 2020 Application Invalid Without 5% Upfront Deposit; SBI Appeal Allowed, HC Orders Set Aside
The Supreme Court has held that an application under SBI’s One Time Settlement (OTS) 2020 Scheme is invalid if not accompanied by the mandatory 5% upfront payment of the settlement amount. The Court set aside the orders of the Andhra Pradesh High Court which had directed SBI to reconsider the borrower’s application & allowed SBI’s appeal.
The borrower, Tanya Energy Enterprises, had availed credit facilities from SBI by mortgaging seven immovable properties. Upon default, its account was classified as NPA & recovery action initiated under SARFAESI Act. An earlier compromise settlement sanctioned in 2018 for ₹5 Cr failed due to non-payment. Subsequently, SBI launched OTS 2020 Scheme & the borrower applied in October–November 2020 offering settlement, but without making the mandatory 5% upfront deposit. SBI rejected the application citing borrower’s past defaults & suppression of facts.
The borrower filed writ petition before Andhra Pradesh High Court. A Single Judge & subsequently the Division Bench directed SBI to process the application under OTS 2020, holding that the borrower was not disqualified under clause 2.1 (cases not eligible). SBI challenged these orders before the Supreme Court.
