# In the matter of Akshay Arun Shetty vs. Bank of India & Anr. CA (AT)(Ins) No. 277 of 2020

> NCLAT judgment dated 2021-01-05. Citation: TCN-2021-NCLAT-00420. The case involves an appeal against the imposition of interest on an outstanding amount under…

- **Court:** NCLAT
- **Order date:** 5 Jan 2021
- **Citation:** TCN-2021-NCLAT-00420
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/akshay-arun-shetty-vs-bank-of-india-anr-ca-8e8dee30

## Summary

### Background

The case involves an appeal against the imposition of interest on an outstanding amount under an OTS (One Time Settlement) proposal. The appellant, Akshay Arun Shetty, had an outstanding liability of Rs. 9.08 Crores, which was cleared in terms of an order dated 9th November 2020. The respondent, Bank of India, acknowledged that Rs. 57,00,000/- was paid by 31st December 2020, and the balance of Rs. 57,00,000/- was cleared by 1st January 2021. The appellant argued for a waiver of interest due to hardships caused by the COVID-19 pandemic and the subsequent lockdown.

## Facts

Akshay Arun Shetty, the appellant, had an outstanding liability of Rs. 9.08 Crores under an OTS proposal with Bank of India, the respondent. The OTS proposal stipulated certain payment terms, including a clause (Clause 8) that required the appellant to pay interest at 1% above the base rate if the amount was not paid by 21st August 2020. The appellant cleared Rs. 57,00,000/- by 31st December 2020, and the balance of Rs. 57,00,000/- by 1st January 2021. The appellant argued that the delay in payment was due to hardships caused by the COVID-19 pandemic and the subsequent lockdown, and sought a waiver of interest. The respondent contended that the appellant was legally obligated to pay interest as per the OTS agreement. The appellant had requested an extension of time to

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## Issues and analysis

### Issue 1: Whether the imposition of interest on the outstanding amount under the OTS proposal is justified, …

**Ratio:** The principle of mitigating hardship due to unforeseen circumstances, such as a pandemic,

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**Reasoning:** The court reasoned that the COVID-19 pandemic and the resulting lockdown caused

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**Interpretation:** This issue involves the interpretation of contractual obligations in the

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** Bansi Lal…; Anant Bijay…; +1 more
- **Appellants:** Akshay Arun…
- **Respondents:** Bank of…

## Timeline

- **2020-05-21 — OTS Prop…**: Appellant was under a legal obligation to clear the outstanding amount within 90 days…
- **2020-08-21 — Interest Li…**: As per Clause 8 of the approved OTS proposal, the Appellant was liable to pay interest at…

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