Calcutta High Court refuses writ direction to compel bank to reconsider rejected one-time settlement, affirming bank's commercial autonomy.
Banks Have Discretion Over OTS Applications
In WPA 25935 of 2026, the Calcutta High Court declined to issue a writ of mandamus compelling a bank to reconsider a rejected one-time settlement (OTS) proposal. The Court affirmed the bank’s discretionary authority in credit restructuring decisions, emphasizing that such matters fall within commercial judgment.
The petitioner sought to enforce reconsideration despite the bank’s evaluation and rejection. The Court held that judicial intervention cannot substitute commercial prudence, particularly in recovery matters governed by internal credit policies and RBI guidelines.
For practitioners, this reinforces the finality of bank decisions on OTS unless vitiated by mala fides or procedural illegality. Borrowers must pursue internal grievance mechanisms or appropriate civil remedies rather than direct writs. Legal advice should focus on procedural compliance during OTS submission.
Citations
- WPA 25935 of 2026