Facts
The petitioner, Deepak Kumar, availed a loan of ₹9,95,000 from Allahabad Bank (now Indian Bank) on May 14, 2015, for a dairy business under the Sangar Gabya Vikas Yojna.
Source reference: p. 2He applied for a government subsidy of ₹5,97,500 under the scheme, which was allegedly supposed to be released concurrently with the loan.
Source reference: p. 1-2Due to the non-release of the subsidy, the petitioner defaulted on the loan.
Source reference: p. 2He filed this writ petition seeking a command to respondent No. 4 to release the subsidy amount and interest thereon from May 2015 to March 2019.
Source reference: p. 1-2During the pendency of the litigation, a counter-affidavit by the Bank revealed that the matter was settled under a One-Time Settlement (OTS) scheme.
Source reference: p. 3Issues
1. Whether the petitioner is entitled to the release of the subsidy amount and interest after having entered into and fulfilled a One-Time Settlement (OTS) with the bank.
Source reference: p. 4Law Applied
The court applied the principle of settlement and accord and satisfaction within the framework of writ jurisdiction under Article 226 of the Constitution of India.
Source reference: p. 3-4It recognized the binding nature of a voluntary One-Time Settlement (OTS) scheme, which, once executed and the account closed with a zero balance, precludes further claims regarding the original subject matter of the dispute.
Source reference: p. 3-4Reasoning
The Court observed that while the petitioner originally sought the release of subsidy and accrued interest, the factual matrix shifted significantly during the proceedings.
Source reference: p. 3The Bank’s counter-affidavit established that the petitioner had offered an OTS on April 7, 2021.
Source reference: p. 3Under this settlement, the petitioner was directed to pay ₹5,97,500—the exact amount of the original subsidy claim—to close the account.
Source reference: p. 3The petitioner complied with this direction and paid the amount on the same day, leading to the closure of the account with a zero balance.
Source reference: p. 3Consequently, the Court reasoned that because the petitioner voluntarily settled the dues and the contractual/financial obligation reached finality through the OTS, there remained no surviving cause of action or "lis" to be adjudicated under the writ jurisdiction.
Source reference: p. 4Holding
The Court held that since the matter was settled under the One-Time Settlement (OTS) scheme and nothing remains to be paid by the petitioner to the Bank, the petition became infructuous.
The writ petition was disposed of accordingly, and any pending interlocutory applications were likewise disposed of.
Source reference: p. 4Original Court PDF
Deepak KumarvsThe State of Bihar
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