Authority: Supreme Court of India (Hon'ble Mr. Justice J.B. Pardiwala & Hon'ble Mr. Justice K. Vinod Chandran)

Order Date: 24 July 2026

Case Overview

  • Parties: A.P. Mahesh Co‑operative Urban Bank Ltd. ("Mahesh Bank") – petitioner; V. Ravi Kumar – respondent.
  • Background: Borrower obtained a secured term loan of Rs 7.70 crore on 05‑09‑2015 for a commercial property at 13.5% p.a. (compounded monthly) with 2% penal interest. The loan was classified as NPA on 05‑05‑2016; Mahesh Bank invoked SARFAESI Act, issuing Demand Notice (04‑10‑2016) and Possession Notice (26‑12‑2017).
  • Litigation Trail:
  • DRT Hyderabad (S.A. No. 425 of 2019) – IA 885 of 2023 sought interest reduction; DRT ordered simple interest at 10% p.a. (05‑07‑2023).
  • DRAT Kolkata (Misc. Appeal No. 35 of 2023) set aside DRT order (10‑05‑2024).
  • High Court of Telangana (W.P. No. 22458 of 2024) restored DRT order (30‑04‑2025).
  • Mahesh Bank filed Special Leave Petition (Civil) No. 24286 of 2025 before Supreme Court; borrower deposited Rs 1.25 crore with the Court registry.
  • Mediation: On 10‑11‑2025 the Court referred parties to mediation, appointing former Supreme Court Judge Justice R. Subhash Reddy as mediator. Mediation concluded successfully; Deed of Settlement dated 27‑05‑2026 was executed.

Settlement Terms (Deed of Settlement)

1. Full and Final Settlement Amount: Rs 15.75 crore.

2. Payment Schedule:

  • a) Rs 1.25 crore deposited with Supreme Court to be appropriated immediately; parties to file joint application for release with accrued interest.
  • b) Rs 35 lakh payable on execution of the Deed (demand draft).
  • c) Balance payable within 60 days of execution (via demand draft/RTGS/NEFT).
  • d) Additional 30‑day grace beyond (c) without default consequences; further extensions only with bank’s written consent.

3. Release of Securities: Upon receipt of full settlement, bank to return original title deeds of the mortgaged property within 15 working days.

4. Withdrawal of Proceedings: Parties to jointly place the Deed on record before the Supreme Court and seek disposal of SLP 24286/2025; all related proceedings before DRT, DRAT, High Court, SARFAESI notices, negotiable instruments cases, etc., to be withdrawn or treated as settled.

5. Consequences of Default: If borrower fails to pay balance by the extended date, bank may (i) appropriate amounts already received, (ii) revive all withdrawn proceedings, and (iii) pursue remedies under SARFAESI Act and the Recovery of Debts and Bankruptcy Act at the original 13.5% interest plus 2% penal interest.

6. Mutual Releases: Upon full payment, each party releases the other from all present and future claims arising from the disputes.

7. Confidentiality: Mediation proceedings remain confidential per Section 22 of the Mediation Act, 2023, except as required for registration, enforcement, or court filing.

8. Termination of Mediation: Upon signing and authentication of the Deed, mediation terminates under Section 24(a) of the Mediation Act.

9. Authentication & Enforcement: Deed to be authenticated by the mediator, signed copies provided to parties, and may be registered under the Legal Services Authorities Act, 1987. It is enforceable as a decree of court per Section 27 of the Mediation Act.

10. Costs: All mediation costs, including mediator’s fees, have been borne by the parties.

11. Representations & Warranties: Each party confirms authority, voluntary execution, and absence of coercion.

Final Outcome

  • The Supreme Court recorded the Deed of Settlement dated 27‑05‑2026, ordered release of the Rs 1.25 crore deposit (with accrued interest) to Mahesh Bank, and disposed of SLP 24286/2025 subject to the bank’s right to enforce Clause 5 on default.
  • All pending applications were dismissed, and the bank will hand over title deeds once full payment is received.

Topics: Settlement, Banking Litigation, Mediation