Article 226 petition cannot be filed seeking alteration in contract: Delhi High Court

The Delhi High Court recently held that a borrower cannot ask for alteration of a contract by way of a writ petition and a contract can only be altered through mutual consent between parties [Supertech Realtors Private Limited v Bank of Maharashtra]..A Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad, therefore, rejected an appeal by Supertech Realtors against the order of the single-judge related to payment of dues by the real estate developer to a consortium of banks..By way of background, a loan amount of ₹678 crores was disbursed by the banks to Supertech for the project named ‘Supernova’ at Sector 94, Noida. The Court was told that Supertech was not able to repay the loan and the account was classified as a Non-Performing Asset (NPA) on September 29, 2018. A One-Time Settlement (OTS) was entered into after four years on September 15, 2022 for an amount of ₹121.43 crores.Supertech later sent a letter seeking an amendment to the OTS and the amount was further reduced from ₹121.43 crores to ₹120.94 crores. Under the amended terms, a sum of ₹9.16 crores had been received in the loan account through RERA cut back and the balance amount of ₹111.78 crore was to be paid in 24 instalments of ₹4.66 crores after three months moratorium from the date of conveying of original sanction to the borrower..It was argued that since the OTS was amended on August 18, the three months moratorium period had to be calculated from August 18 and not from June 15 which was the date of the original OTS..However, the single-judge rejected the argument stating that the three months moratorium was to be calculated from the date of conveying original sanction.The division bench agreed with the single-judge saying that the amended terms of sanction made it very clear that the amount of ₹111.78 crores had to be paid in 24 installments after three months of moratorium from the date of conveying original sanction.Therefore, the first installment was payable by September 15, 2022 which had not been paid by the appellant, the court said..It agreed with the finding of the single-judge that the petition was an attempt for renovation of contract which cannot be permitted in a writ petition.“The One-Time Settlement which has been entered into between the consortium of Banks and the parties is purely a contract and a borrower cannot ask for alterations of the same by filing petitions under Article 226 of the Constitution of India. The terms can be altered only through mutual consent between the parties.”Therefore, the appeal was dismissed..Senior Advocate Maninder Acharya along with advocates Ishan Dewan, V Siddharth, Viplav Acharya, Udita and Priyal Bopana appeared for Supertech.Advocates Nishant Awana and GS Awana appeared for Bank of Maharashtra.CGSC Monika Arora, Yash Tyagi and Shivam Raghuwanshi appeared for Centre. .[Read Judgment]