Tijaria Polypipes Limited has submitted a comprehensive One Time Settlement (OTS) proposal to Bank of India for Rs 53.67 crore to resolve all outstanding liabilities. The company disclosed this development under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, demonstrating its commitment to achieving an honorable resolution with its banking partner since 2003.

Settlement Proposal Details

The OTS proposal follows discussions held with Bank of India's senior management on March 13, 2026, at the bank's head office in Mumbai. During these negotiations, the bank expressed interest in considering the Rs 53.67 crore settlement amount for full and final closure of the account.

Financial Commitments and Investor Support

Tijaria Polypipes has demonstrated its bona fide intent by already placing Rs 12.00 crore with the bank, deposited in two tranches of Rs 7.00 crore on September 10, 2024, and Rs 5.00 crore on February 18, 2025. Additionally, the company has made an upfront payment of Rs 5.37 crore through demand drafts, bringing the total immediate commitment to Rs 17.37 crore.

The company has secured investor support for the settlement, contingent upon Bank of India's acceptance of the OTS proposal by April 15, 2026. The proposal emphasizes that failure to receive approval by this deadline will render the Rs 53.67 crore offer void.

Asset Assessment and Commercial Rationale

The company's submission highlights that its primary security, the Sitapura Plant & Machinery, has remained non-operational for over four years. Due to technological obsolescence in the specialized pipe and yarn manufacturing equipment, Tijaria Polypipes argues that the Net Present Value of an immediate cash settlement significantly exceeds the uncertain and depreciating value of physical assets.

The proposal also addresses Rs 9.52 crore in Funded Interest Term Loans (FITL), representing capitalized interest during the operational shutdown period. The company seeks waiver of this component to enable a sustainable settlement of the core principal amount.

Additional Requests and Conditions

Alongside the financial settlement, Tijaria Polypipes has requested several operational facilitations:

• Full clearance of ROC charges on previously sold VKI property
• Release of property documents for Daulatpura land with ROC charge clearance
• Permission for share right issue, preferential shares, or debentures issuance
• Opening of two active current accounts for settlement proceeds and fundraising activities

The company has also requested a 90-day interest-free period, with minimum interest charges applicable from the 91st to 180th day for any delayed payments.

Legal Framework and Litigation Withdrawal

The OTS proposal operates within the framework of directions from the Rajasthan High Court and RBI's June 2023 guidelines. Upon acceptance, Tijaria Polypipes commits to immediately filing joint compromise applications to withdraw all pending litigations, facilitating a comprehensive resolution of disputes.

The company emphasized its track record of having repaid Rs 101.54 crore to Bank of India over their long-standing relationship, positioning this settlement as a commercially sound resolution for both parties.

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.