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Issues Involved:
1. Whether the writ of mandamus can be issued to direct the financial institution to accept a one-time settlement offer. 2. Whether the Court has jurisdiction under Article 226 of the Constitution to interfere in contractual matters related to loan recovery. Issue-Wise Detailed Analysis: 1. Issuance of Writ of Mandamus for One-Time Settlement: The writ petition sought a mandamus directing the Tamil Nadu Industrial Investment Corporation Limited (TIIC) to accept a one-time settlement offer and release collateral securities. The petitioner, a private limited company engaged in software development, had defaulted on a term loan of Rs. 2.60 crores due to market constraints and global recession. The petitioner proposed a one-time settlement of Rs. 2 crores but alleged that TIIC had not considered this proposal. The learned single Judge had directed TIIC to consider the one-time settlement favorably if Rs. 2 crores was paid. The High Court, however, emphasized that a writ of mandamus can only be issued to enforce a statutory duty or legal right. Citing precedents such as *Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. Vs. Sipahi Singh* and *M/s. M.M. Accessories Vs. M/s. U.P. Financial Corporation*, the Court reiterated that mandamus cannot be issued to compel performance of contractual obligations unless a statutory duty is involved. The Court concluded that no statutory duty or legal right was shown by the petitioner to warrant the issuance of mandamus. 2. Jurisdiction under Article 226 in Contractual Matters: The Court highlighted that matters related to loan recovery are contractual and not within the proper domain of writ jurisdiction under Article 226. The Court's interference is warranted only when there is an error of law or violation of statutory provisions. The relationship between the financial institution and the borrower is that of creditor and debtor, and the terms of the contract govern their obligations. The Court cannot alter or modify these terms, as it would amount to rewriting the contract, which is beyond judicial purview. The Court cited the Supreme Court's observations in *Haryana Financial Corporation Vs. M/s. Jagdamba Oil Mills* that financial institutions must act fairly but are not obligated to accept settlements that undermine their financial stability. The Court further noted that holding up loan recoveries through unwarranted judicial orders adversely impacts the economy and the ability of financial institutions to extend fresh loans. Conclusion: The High Court set aside the impugned order of the learned single Judge, emphasizing that judicial interference in contractual matters related to loan recovery is not appropriate unless there is a clear violation of law. The Court underscored the importance of adhering to well-settled legal principles rather than acting out of sympathy or compassion. The writ appeal was allowed, and the miscellaneous petitions were closed.
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