One Time Settlement proposals require explicit payment timelines; absence of such terms necessitates reasonable enforcement by courts.

ORDER :

R. NATARAJ, J.

1. Petitioners have challenged an order dated 13.03.2020 passed by the Chief Judicial Magistrate, Bengaluru Rural District, Bengaluru, in Crl.Misc. No. 115/2020 under Section 14 of the SARFAESI Act.

2. Petitioners contend that they had availed OCC loan of Rs.20,00,000/- and OD loan of a sum of Rs.55,00,000/- from the respondent – Bank and had executed required mortgage deed dated 16.03.2018 and deposited the title deeds of the property. They contend that due to various reasons, they could not carry out the business effectively and could not pay the installments in time. The respondent – Bank, therefore, initiated proceedings under the SARFAESI Act and later initiated proceedings under Section 14 of the SARFAESI Act in Crl.Misc. No. 115/2020 to take possession of the secured asset. The Magistrate passed order dated 13.03.2020 permitting the respondent – Bank to take out possession of the mortgage asset and the jurisdictional Police was directed to provide assistance. Petitioners thereafter approached the respondent – Bank for One Time Settlement (OTS) of the loan amount and after discussions, it was agreed that the petitioners shall pay a sum of Rs.58,00,000/- in full and final settlement of both the loan accounts. Petitioners were directed to pay a sum of Rs.20,000/- on the spot towards OTS. Thereafter petitioners paid a sum of Rs.5,00,000/- on 25.02.2022. They contend that they had requested the respondent – Bank to grant more time to pay the loan amount since the mother of petitioner No. 2 was suffering from age related ailments and she had to be looked after. However, the respondent – Bank instead of granting time, approached the Court and filed a memo for appointment of Court Commissioner to execute the order dated 13.03.2020. The Court had also passed an order dated 21.04.2022 appointing the Commissioner and authorized the respondent – Bank to issue e-auction sale notice by fixing the auction date as 21.12.2022. Petitioners contend that when Court Commissioner went near the mortgaged asset and the respondent – Bank tried to take possession of the property, the petitioners came to know of the impugned order. Hence, petitioners are therefore before this Court.

3. Learned counsel for petitioners contended that respondent – Bank had not stipulated any time within which OTS amount had to be paid. He contends that petitioners have paid the entire sum of Rs.58,00,000/- and therefore, the respondent – Bank cannot proceed against the mortgaged asset and the respondent – Bank is bound to cancel the mortgage and return the property documents. Learned counsel has taken the Court through the various interlocutory orders passed by this Court. He invited the attention of the Court to the order dated 15.12.2023 which reads as follows:

"This Court by Order dated 29.11.2022, had restrained the respondent-Bank from precipitating in the matter. The said Order has been extended time to time, respondent-Bank has filed statement of objection on 18.07.2023, indicating as on the said date the total outstanding amount payable by the petitioner is about Rs.1,01,00,000/- (One Crore and One Lakh Rupees).

2. Learned counsel for the petitioner though does not dispute the said amount submits that there was a proposal for one time settlement, in which the petitioner proposed to pay Rs.58,00,000/- (Rupees Fifty Eight Lakhs Only).

3. Learned counsel for the respondent submits that, OTS proposal has not been materialized on account of non-compliance by the