M J FABRICS AND ORS vs BANK OF BARODA on 12 January 2026

1. 1. The Applicants have filed the present Misc. Application seeking extension of time for compliance with the Consent Terms dated 08.09.2025 filed in O.A.No.361/2024. During the pendency of this MA, the Applicants have also filed I.A.No.2925/2025 (Ex.A/8) praying for a direction to the Respondent Bank to remove lien over the property mentioned in Schedule of the said application or in the alternative to issue NOC to the Applicants for enabling the Applicants to raise finance against the said property.

2. 2. I have heard Ld. Counsels for both the parties and perused the documents on record.

3. 3. It appears that the Respondent Bank had filed O.A.No.361/2024 against the Applicants herein to recover an amount of Rs.4,27,42,968.26 together with interest @12.90% p.a. monthly rests and cost, charges and expenses. During the pendency of the said OA, the parties arrived at an amicable settlement and accordingly, the parties filed Consent Terms vide Ex.A/10 in the said OA. On the basis of said Consent Terms, O.A.No.361/2024 was disposed of by this Tribunal vide order dated 08.09.2025.

4. 4. Ld. Counsel for the Applicants submitted that the Applicants paid the sum of Rs.75 Lac within the stipulated time limit and voluntarily remitted an additional sum of Rs.25 Lacs. However, due to unforeseen financial crunch faced by them in

business, they could not pay the remaining amount as per Consent Terms. The Applicants also tried to raise funds for payment of remaining instalments from financier, but in vain. Therefore, the Applicants have filed the present Misc. Application for extension of time to pay the remaining outstanding amount by 31.03.2026.

1. 5. Per contra, the Respondent Bank has filed its Affidavit-in-reply vide Ex.R/17 and denied the averments and contentions raised by the Applicants. It has further submitted that the present Misc. Application is not maintainable at law and in fact as there is no provision in the RDB Act which empowers the Applicants to file the present Application seeking enlargement of period for repayment of the dues of Respondent Bank. It has further contended that as per the Consent Terms dated 08.10.2025, the Recovery Certificate was to be executable forthwith in the event of failure of borrower in making payment of any instalments. The Applicants herein have by not making payment of second instalment, committed default on 08.10.2025. As such, the Respondent Bank has already initiated recovery proceedings on account of default of the borrowers in making payment. It has further contended that the Applicants have filed the present Misc. Application only with a view to create obstacle in smooth and expeditious recovery proceedings. Therefore, the Respondent Bank has prayed for dismissal of the present MA.

2. 6. In support of its contention that the Bank has already resumed recovery proceedings on account of default committed by the Applicants herein on 08.10.2025, the Respondent Bank has filed Purshis vide Ex.R/9 along with copy of intimation for sale of the secured asset dated 10.12.2025 sent to the borrowers.

3. 7. Considering the facts and circumstances of the case as well as submissions of Ld. Counsels for both the parties, it is firstly required to be noted that after issuing a Consent

Recovery Certificate, this Tribunal lacks jurisdiction to modify or reschedule payment terms. Borrowers have no legal right to an extension. Settlement arrived at between the parties is a 'concession' offered by the Bank and it is not entitlement to the borrowers. It is not in dispute in the present case that the Applicants herein have committed default in payment of second instalment as per the Consent Terms filed in O.A.No.361/2024. It appears from the Consent Terms dated 08.09.2025 that it was agreed by the Applicants herein that in the event of failure in making payment of any of the instalments as stated in the Consent Terms, the Recovery Certificate was to be forthwith executable. It further appears from the intimation for sale of secured asset dated 10.12.2025 issued by the Respondent Bank under Rule 6(2) / 8(6) of Security Interest Rules that the Respondent Bank has got secured asset and the Bank is in a position to recover its outstanding dues by sale of the secured asset. In that view of the matter, the Respondent Bank is legally justified in rejecting extension request of the borrowers / Applicants to pursue the matter of recovery, which is an option available to it.

1. 8. It is further required to be noted that as a general rule, extending the timeline for payment of the dues as agreed by the borrowers by way of Consent Terms dated 08.09.2025 would amount to '**rewriting the contract**' which is prohibited u/s 62 of the Indian Contract Act, 1872, without mutual consent. Moreover, it is also required to be noted that DRT can exercise inherent powers under RDB Act to extend time if the proceedings are still pending and the extension conflict with the core terms of a final Consent Recovery Certificate.

2. 9. It is further required to be observed that the decision to extend a deadline lies solely within **commercial wisdom** of the Respondent Bank and this Tribunal cannot interfere with such commercial wisdom or discretion of the Bank. Once a

Consent Recovery Certificate is issued, this Tribunal becomes ***functus officio*** and cannot revisit or alter the settled terms.

1. 10. In view of the aforesaid discussion, this Tribunal is of the opinion that the present Misc. Application as well as I.A.No.2925/2025 vide Ex.A/8 has no merits and the same deserves to be dismissed.

Ordered accordingly.

File be consigned to record.

**(PANKAJ KUMAR UPADHYAY)** **PRESIDING OFFICER** **DRT-II, AHMEDABAD**

Saloni