ORDER :- In these proceedings, under Article 226 of the Constitution of India, the petitioner, a sole proprietary concern of Shri Virender Khullar, challenges a letter dated 25th August, 2005 (hereafter "the impugned letter") written by the respondent, Canara Bank (hereafter "the bank") withdrawing the One Time Settlement (OTS) in respect of its (the petitioner's) liabilities.

2. The facts necessary to decide the case are the petitioner borrowed amounts from the respondent, Canara Bank in February, 1997. The total limit sanctioned was Rs. 1.7 crores. These were commercial advances. The advances were secured through collateral security, by mortgaging property bearing No KP-124, HSIDC, Industrial Area, Kundli Tehsil, District Sonepat, Haryana. The petitioner was unable to repay the amounts in time and incurred a liability to the extent of Rs. 1.31 crores. The Bank filed an application for recovery of that amount with interest before the Debts Recovery Tribunal, (DRT) New Delhi, on 4-6-1999. The application was decreed by the DRT on 15-10-2003 and a recovery certificate for the sum of Rs. 1,34,75,360/80 was issued against the petitioner. The Bank instituted recovery proceedings being RC 154/2003 before the Recovery Officer.

3. The petitioner wrote to the Bank on 19-8-2004 and offered, without prejudice to settle its liabilities in terms of Reserve Bank of India (RBI) Circulars, under a One Time Settlement Scheme. The Bank conveyed its acceptance, through its letter dated 10-12-2004 whereby the petitioner had to pay the entire amount of Rs. 85 lakhs on or before 31-12-2004. The petitioner was further informed that a sum of Rs. 1.5 lakhs kept in a "No Lien Account" with the Bank was adjusted towards the OTS.

4. The petitioner conveyed willingness to abide by the One Time Settlement Scheme offer (hereafter "the OTS" or "the offer") on 19-12-2004 and informed its inability to pay the entire amount within the time indicated; it requested for about five months time to pay the entire amount. The petitioner also sought time to sell its property. The petitioner paid a further amount of Rs. 2,50,000/- on 22-12-2004 when a joint application for recording terms of the compromise was moved before the Recovery Officer. The Bank wrote to the petitioner on 11-5-2005, stating that no more time would be granted. The petitioner again requested for further extension; the Bank agreed to this and granted time till 30-6-2005 to fulfill its commitment in accordance with the OTS. At the petitioner's request, again, time was extended to 31-8-2005 for depositing the entire amount.

5. On 18-8-2005, the Bank informed the petitioner that one Dinesh Lakra had written to it alleging irregularities while availing limits for working capital requirements at Bank's Rajouri Garden Branch and that he had concealed that the property at B-4/40, Paschim Vihar was owned as a Power of Attorney holder. It was also alleged in the letter that Shri Virender Khuller, the petitioner's proprietor was owner of a portion of property known as Shalimar Cold Storage, B-50, Lawrence Road, Delhi. The petitioner wrote to the Bank on 19-8-2005, requesting for details. On 25-8-2005, the Bank issued the impugned letter withdrawing the One Time Settlement offer which had been extended upon 31-8-2005.

6. The petitioner contends that the Bank's withdrawal of the OTS is arbitrary and that the principle of promissory estoppel would prevent it from going back on the agreement to accept the offer and settle the entire dues for Rs. 85 lakhs. It is alleged that the Bank's intention to close the matter is evident from the joint application moved before the Debts Recovery Tribunal in December, 2004 pursuant to the letter dated 19-12-2004 communicating acceptance of the petitioner's offer to settle for Rs. 85 lakhs. The Bank, on adjusting Rs. 1.5 lakhs kept in the No Lien Account concluded the contract. In the circumstances, it had to proceed and could not have unilaterally withdrawn from the agreement.

7.

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