The enforceability of One-Time Settlement agreements is not contingent upon the source of repayment, affirming that a bank cannot unilaterally alter the terms of an OTS post-acceptance of payment.

JUDGMENT

Navin Chawla, J. (ORAL)

CM APPL. 22120/2022

Exemption allowed, subject to all just exceptions.

The application stands disposed of.

LPA 308/2022 & CM APPL. 22121/2022

1. This appeal has been filed by the appellant challenging the judgment and order dated 26.04.2022 passed by the learned Single Judge of this Court in WP(C) 12042 of 2021, allowing the writ petition filed by the respondents herein, and directing the appellant to return the original Title Deeds of the mortgaged properties, bearing number 7th Kilometer stone, Moradabad-Kashipur Road, Kashipur, District Udham Singh Nagar, Uttarakhand, admeasuring approximately 6.5 acres, and C - 12, Sector - 1, Noida, Uttar Pradesh (hereinafter collectively referred to as the 'mortgaged properties') to the respondents within a period of two weeks.

2. The respondents had filed the above mentioned writ petition praying for a writ of mandamus to the appellant herein to extend the timelines of One-Time Settlement (hereinafter referred to as the 'OTS') dated 09.03.2021, till 31.03.2022, and for restraining the appellant from cancelling the OTS on account of delay in payment of the amount by the respondents.

3. It was the case of the respondents that:

(a) the respondents had approached the appellant for an OTS for their loan accounts for a sum of Rs.20,00,00,000/- (Rupees twenty crore). The same was approved by the appellant/Bank vide sanction letter dated 09.03.2021.

(b) The respondents have paid a sum of Rs.6,00,00,000/- (Rupees six crore) out of Rs.20,00,00,000/- (Rupees twenty crore) to the appellant till 31.03.2021. However, due to the sudden outbreak of the Covid - 19 pandemic, the respondents requested the appellant to extend the time period for the payment of the next tranche of Rs.7,00,00,000/- (Rupees seven crore), which was to be paid by 30.06.2021, after selling the mortgaged properties.

(c) The respondents arranged for and deposited Rs.4,80,00,000/- (Rupees four crore eighty lakh) with the appellant by 30.06.2021, leaving a balance of Rs.2,20,00,000/- (Rupees two crore twenty lakhs) that was to be paid by 30.06.2021. As the appellant was seeking payment thereof, the respondents filed a writ petition, being WP(C) 8968 of 2021, before this Court seeking extension of timelines for payment under the OTS till 31.03.2022.

(d) A learned Single Judge of this Court, by its Order dated 03.09.2021, dismissed the said petition as withdrawn on the statement made by the respondents that they shall be submitting a revised proposal to the appellant/Bank.

(e) The respondents thereafter, vide their letter dated 08.09.2021, sought an extension of time for making the payment of the balance amount of Rs.9,20,00,000/- (Rupees nine crore twenty lakh). The said request was, however, rejected by the appellant/Bank vide its letter dated 21.09.2021.

(f) The respondents thereafter preferred another writ petition, being WP(C) 11099 of 2021, before this Court. The said petition was, however, withdrawn by them vide order dated 29.09.2021.

(g) The respondents thereafter made a further payment of Rs.2,20,00,000/- (Rupees two crore twenty lakh) to the appellant on 29.09.2021, and preferred an application before the Debts Recovery Tribunal (hereinafter referred to as 'the learned DRT') seeking an extension of time to make the balance payment. The respondents made a further payment of Rs.3,60,00,000/- (Rupees three crore sixty lakh) to the appellant on 07.10.2021, leaving a balance amount of Rs.3,40,00,000/- (Rupees three crore forty lakh) to be paid.

(h) As the application filed by the respondents before the learned DRT could not be heard by the learned DRT, the respondents filed the abovementioned writ petition, being WP(C) 12042 of 2021, before this Court.

4. By an Order dated 26.10.2021 passed in the above writ petition, the learned Single Judge directed that subject to the respondents depositing a f