Tijaria Polypipes Limited has faced a significant legal setback as the Rajasthan High Court dismissed its writ petition challenging Bank of India's rejection of its One-Time Settlement (OTS) proposal. The court's order, dated March 27, 2026, represents the culmination of prolonged litigation between the company and the bank over outstanding loan dues.

Court Proceedings and OTS Proposals

The case centered around multiple OTS proposals submitted by Tijaria Polypipes to Bank of India. The company's legal troubles began when the bank rejected its initial OTS proposal of ₹44.00 crore. Subsequently, following a court-directed negotiation meeting on March 13, 2026, the company submitted a revised proposal of ₹38.00 crore, inclusive of ₹12.00 crore already deposited.

The bank rejected the ₹38.00 crore proposal primarily because it was lower than the previously rejected ₹44.00 crore offer. Bank of India also cited that the market value of securities held by them was ₹53.67 crore, making the proposed settlement amount inadequate.

Legal Arguments and Court's Analysis

Tijaria Polypipes' legal counsel argued that the bank's rejection was arbitrary and capricious. They highlighted that the company had made multiple attempts to settle, including a revised offer of ₹41.00 crore via email dated March 25, 2026, and eventually agreeing to pay ₹53.67 crore, matching the market value of mortgaged properties.

Bank of India's senior counsel countered that the company's approach constituted abuse of legal process, noting this was the fourth round of litigation. The bank emphasized that:

• The principal outstanding amount was ₹74.00 crore
• Multiple OTS proposals of decreasing amounts showed lack of genuine intent
• The company had capacity to pay, as evidenced by regular payments in other loan accounts
• No bank should be compelled to accept amounts less than what could be recovered through asset liquidation

Supreme Court Precedent and Judgment

Justice Anuroop Singhi extensively relied on the Supreme Court judgment in Bijnor Urban Coop. Bank Ltd. v. Meenal Agarwal (2023) 2 SCC 805, which established crucial principles regarding OTS schemes:

Key Legal Principles:

• OTS benefits cannot be claimed as a matter of right by borrowers
• Courts cannot issue mandamus directing banks to grant OTS benefits
• Banks have commercial wisdom to decide on settlement proposals
• Financial institutions can refuse OTS if they can recover full amounts through secured assets

The court observed that allowing borrowers to claim OTS as a right would encourage dishonest practices, where capable borrowers might deliberately default expecting reduced settlement amounts.

Financial Impact and Outstanding Litigation

The judgment revealed the complex financial situation facing Tijaria Polypipes:

The court noted that this writ petition was part of extensive ongoing litigation, with multiple related cases pending including D.B. Special Appeal Writ No.652/2025 and S.B. Civil Miscellaneous Application No.46/2025.

Court's Final Decision

Justice Anuroop Singhi concluded that Tijaria Polypipes failed to demonstrate any grave illegality by Bank of India that would warrant judicial intervention. The court characterized the company's approach as "apathetic" and noted that the proceedings appeared to be used as a tool to prolong recovery proceedings.

The court dismissed the writ petition along with all pending applications, refusing to direct the bank to consider any OTS proposal. Regarding the company's request for refund of the ₹12.00 crore deposit, the court refrained from commenting, noting that other related proceedings were pending where this issue could be addressed.

This judgment reinforces the principle that financial institutions retain discretion in settlement decisions and cannot be compelled through judicial intervention to accept proposals that may not align with their commercial interests or recovery prospects.

Tijaria Polypipes Limited has disclosed significant legal developments following the conviction of six directors for IPO prospectus violations. The Additional Chief Judicial Magistrate (Economic Offences) Jaipur convicted the directors under the Companies Act 1956, but subsequent court proceedings have resulted in conditional bail being granted.

Court Conviction Details

The Additional Chief Judicial Magistrate, presided over by Rajesh Kumar Meena, delivered the judgment on March 17, 2026, in case number 09/2015 (CIS-444/2015). The court found the directors guilty under Sections 63, 68, and 628 of the Companies Act 1956 for making false statements and concealing material facts in their IPO prospectus dated September 12, 2011.

Appeal and Bail Proceedings

Following the conviction, the directors filed Criminal Appeal Number 255/2026 before the Special Court (Sati Prevention) and Additional Sessions Court, Jaipur Metropolitan Second. On March 19, 2026, the Special Court granted conditional bail to all convicted directors, suspending their sentences pending the appeal's disposal.

IPO Violations and Financial Irregularities

The investigation revealed that the company raised ₹60.00 crore through its IPO by issuing one crore equity shares at ₹60.00 per share (₹10.00 face value plus ₹50.00 premium). The court found multiple violations in the prospectus disclosures:

Key Violations Identified:

• Concealed Inter-Corporate Deposits (ICDs): The company failed to disclose ICDs taken from Herald Commerce Limited (₹1.00 crore on May 23, 2011) and Bahubali Properties Private Limited (₹75.00 lakh on June 9, 2011)
• False Bridge Loan Claims: The prospectus stated no bridge loans were taken against IPO proceeds, which was found to be untrue
• Misuse of IPO Funds: Approximately ₹45.00 crore from IPO proceeds was used to repay promoter-related loans instead of stated business expansion purposes
• Machinery Purchase Misrepresentation: The company claimed to spend on imported and domestic machinery but diverted funds elsewhere

Original Sentencing Details

The trial court had imposed the following sentences on each director:

The court had ordered that all sentences would run concurrently, but these have now been suspended pending the appeal outcome.

Regulatory Compliance and Disclosure

On March 30, 2026, Tijaria Polypipes Limited filed a disclosure under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, informing stock exchanges about the bail order. The disclosure was signed by Praveen Jain Tijaria, Whole Time Director, and submitted to both BSE Limited (Scrip Code: 533629) and National Stock Exchange (NSE Symbol: TIJARIA).

The case highlights the importance of truthful disclosure in public offerings and demonstrates the legal consequences of misleading investors through false prospectus statements. The appeal proceedings will determine the final outcome of this significant corporate governance matter.