The acceptance of payments under a one-time settlement scheme, despite lack of formal approval, raises issues that require independent examination by a competent authority, specifically regarding the validity of recovery proceedings.

JUDGMENT :

VIJU ABRAHAM, J.

Since both these writ petitions challenge the very same proceedings they are heard and disposed of by a common judgment.

2. The petitioner along with two others started a firm in the year 2015. A financial assistance to the tune of Rs.16,94,000/- was availed from the Kerala Financial Corporation, which is an interest free loan for a period of five years. The remittance of the principal amount was defaulted by the petitioner. Recovery proceedings were initiated and Ext.P1 order of attachment was effected on the properties hypothecated by the petitioner. While so, Ext.P2 notice was issued intimating that the persons who intend to settle the loan by way of one time settlement has to reach the concerned branch before 18^th April to 21^st April. Pursuant to Ext.P2 notice the managing partner of the firm has sent Ext.P3 letter informing that he will be appearing before the adalath to be held on 08.05.2018. Subsequently in July 2018 the 2^nd respondent contacted the managing partner to meet him in the office. Thereupon the petitioner appeared before the 2^nd respondent and the 1^st respondent directed the petitioner to pay an amount of Rs.1,40,000/-, as compromise settlement advance and the same was deposited on 28.07.2018. Again as contacted by the 2^nd respondent the managing partner and one Mr.Binoy K. Mani appeared before him on 08.11.2018 and submitted a request as per Ext.P4 letter intimating their option to clear the loan amount either by one time settlement or in instalments. The exact amount to be paid under the OTS scheme was not informed to the petitioner by any written communication, but they orally directed the petitioner to deposit an amount of Rs.12,02,500/-. While the partners of the firm were awaiting for a written reply to the letter, Ext.P5 communication was issued stating that, since the firm was not prepared to remit the minimum amount for compromise settlement and hence the amount of Rs.1,40,000/- deducting 7.5% as R.R. commission will be adjusted against the loan account. On receipt of Ext.P5 the 2^nd respondent was again contacted, and issued Ext.P6 letter intimating that they are ready to settle that loan under one time settlement and by remitting an amount of Rs.12,15,053/-. Subsequently as instructed by the 2^nd respondent an amount of Rs.10,75,053/- was paid thus making a total remittance of Rs.12,15,053/- which is inclusive of 1% collective charge. Thereafter respondents 2 and 4 contacted the managing partner and directed him to make a demand draft for an amount of Rs.12,310/- in favour of SBI account, Government of Kerala towards collection charges as provided under Rule 5(3) of the Revenue Recovery Rules. Pursuant to the said direction demand draft was taken as evident from Exts.P7 and P8, and Ext.P9 note file would reveal that the amount due including 1% revenue recovery commission has been paid by the petitioners towards compromise settlement. Thereupon petitioner requested respondents 2 and 4 to lift the attachment and issue NOC as the entire amount due to the KFC has been repaid under one time settlement. As the attachment was not lifted the managing partner again submitted Ext.P10 representation before the KFC and Ext.P11 representation before the Government. The District Legal Service Authority was also moved. Ultimately Ext.P14 representation was given to the 3^rd respondent requesting to take steps to lift the attachment and drop all revenue recovery proceedings.

3. Subsequently properties of one of the managing director was lifted as evident from Ext.P15. Thereafter the 5^th respondent issued Ext.P17 letter to the managing partner showing that attachment over the property of Binoy K. Mani was lifted as the entire loan is closed. A perusal of Ext.P17 would reveal