In a significant ruling that stirred quite a bit of discussion in Court Room No. 13, the Calcutta High Court on Wednesday rejected a commercial suit filed by Senbo Engineering Limited against Bank of Maharashtra. The company had insisted that its negotiations for a one-time settlement (OTS) had matured into a binding contract. But the bench, after a detailed hearing, held that no borrower can force a bank to accept an OTS-not even when substantial payments have been made during negotiations.
Background
The dispute traces back several years. Senbo Engineering had availed multiple credit facilities from Bank of Maharashtra and later slipped into default, leading to the account being declared a Non-Performing Asset. The bank initiated statutory recovery measures under the SARFAESI Act in 2017 and followed it up with proceedings before the Debts Recovery Tribunal and even the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code.
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While this was happening, the company explored two rounds of OTS proposals. The first collapsed. The second went through prolonged back-and-forth discussions, with the borrower repeatedly enhancing its offer and the bank accepting some interim payments. But the bank ultimately rejected the proposal, once in January 2025 and again in February 2025. Senbo claimed these repeated interactions created a binding settlement. The bank insisted otherwise.
Court’s Observations
Justice Aniruddha Roy began with a reminder of a foundational principle: when deciding a plaint rejection plea, the court must take the plaint at face value, without mini-trial or assumptions.
Even after doing so, the court found the suit legally untenable. The judge noted that the borrower’s entire claim was based on enforcing an OTS-an arrangement that, in this case, had no statutory backing and was purely a matter of negotiation. The bench pointed out that the bank had consciously rejected the proposal twice, and that alone demonstrated the absence of any “concluded contract.”
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“The bank must take decisions in its own commercial wisdom,” the bench observed, adding that courts cannot compel a financial institution to accept a lesser amount simply because negotiations occurred. Echoing a Supreme Court principle, the judge remarked, “No borrower can, as a matter of right, pray for the grant of a one-time settlement.”
The court also clarified that although various recovery proceedings were pending-under SARFAESI, IBC, and DRT-the plaintiff had not challenged those proceedings in this suit. Still, the core relief sought (specific performance of an OTS) was barred in law because a rejected OTS cannot be converted into an enforceable contract.
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Decision
Concluding that the plaint disclosed no enforceable right and was barred by law, the High Court summarily rejected the suit under Order VII Rule 11 of the Civil Procedure Code. The judge ordered that the plaint be “taken off the file,” bringing the litigation to an abrupt end.
With this, the application filed by Bank of Maharashtra was allowed, and the suit CS-COM/63/2025 now stands dismissed at the threshold.
Case Title: Senbo Engineering Limited vs. Bank of Maharashtra
Case No.: CS-COM/63/2025
IA No.: GA-COM/2/2025
Case Type: Commercial Suit – Application for Rejection of Plaint
Reserved On: 19 November 2025
Decision Date: 03 December 2025