In a compassionate ruling, the Supreme Court on Thursday stepped in to ease the financial burden of a widow facing recovery action by a public sector bank. Invoking its special powers under Article 142 of the Constitution, the Court allowed Sumaiya Parveen to settle her late husband’s loan by paying a reduced amount, bringing an end to a long-running dispute with the Central Bank of India.
The Bench, led by Chief Justice of India Justice Surya Kant, said the case deserved “equitable consideration” due to its exceptional circumstances.
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Background of the Case
The case arose from a loan taken by Sumaiya Parveen’s husband, proprietor of a leather business named FILSA Leathers. He had borrowed ₹50 lakh from the Central Bank of India, offering the family’s residential house in Vellore, Tamil Nadu, as collateral.
According to court records, the loan account remained regular until May 2021, when the borrower passed away during the second wave of the COVID-19 pandemic. Following his death, the account slipped into default and was later declared a Non-Performing Asset (NPA).
The bank initiated proceedings under the SARFAESI Act and later offered a One Time Settlement (OTS) of ₹34.69 lakh against outstanding dues of about ₹71 lakh. The widow paid the required 10% upfront amount but failed to deposit the balance within the stipulated time.
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Dispute Over One-Time Settlement
The dispute escalated when the bank refused to revive the original settlement and instead demanded a higher amount. A possession notice was issued, prompting the widow to approach the Madras High Court.
After the High Court declined to grant relief, the matter reached the Supreme Court. During earlier hearings, the top court had directed the bank to reconsider her case under the old OTS scheme.
However, the bank later demanded ₹46.34 lakh, including the earlier deposit-an amount the appellant said was impossible for her to arrange.
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Court’s Observations
The Supreme Court acknowledged that the bank’s demand was legally valid but noted the exceptional hardship faced by the appellant.
“The circumstances of the case are unusual and unfortunate,” the Bench observed, noting that the borrower had died during the pandemic and that the widow had made sincere efforts to clear the dues.
The Court further recorded that the delay in availing the OTS was not entirely attributable to the appellant and that enforcing the higher amount would cause undue hardship.
Final Decision
Balancing legal rights with humanitarian considerations, the Supreme Court passed a special order under Article 142.
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The Court directed that:
- The appellant shall pay ₹33 lakh, in addition to the ₹3.46 lakh already deposited.
- The amount must be paid within eight weeks.
- Upon payment, the bank must issue a no-dues certificate and return the original property documents.
- No further interest will be charged once the payment is made.
- If the amount is not paid within the stipulated time, the bank will be free to proceed as per law.
The Bench clarified that the order was passed only in the peculiar facts of this case and should not be treated as a precedent.
“The appeals stand disposed of in the above terms,” the Court concluded.
Case Title: Sumaiya Parveen vs Central Bank of India
Case No.: Civil Appeal arising out of SLP (C) Nos. 29289–29290 of 2024
Decision Date: 16 January 2026
