A valid One Time Settlement (OTS) proposal must be evaluated on its own merits, considering actual repayments rather than solely asset valuations.

Judgment :

Ajay Mohan Goel, J.

By way of this writ petition, the petitioner has, inter alia, prayed for the following reliefs:-

“i) Issue a writ in the nature of certiorari for quashing the order dated 16.08.2023, passed by the respondent Corporation whereby the OTS offer dated 14.11.2022 of the petitioner was declined on evasive grounds; further order dated 11.12.2023, 14.02.2024 and 15.05.2024 by virtue of which representation for reconsideration of the said OTS offer dated 14.11.2022 were also declined, being illegal, arbitrary, perverse and against the Reserve Bank of India Guidelines, in the interest of justice.

ii) Issue a writ in the nature of mandamus directing the respondent Corporation to consider the OTS proposal of the petitioner in accordance with the Reserve Bank of India guidelines according to which the minimum recovery amount is the outstanding amount classified as NPA alongwith nominal interest from the date of classification of the amount till final payment, in the interest of justice.”

2. The case of the petitioner is that the respondent- Corporation had initially sanctioned a Tem Loan of Rs.5.77 lac and Soft Loan of Rs.2.22. lac in August, 1999 for setting up a Restaurant at Village Sandhora, Mashobra, under the name and style of M/s Hillcrest Garden Café, out of which, Term Loan of Rs.5.77 lac and Soft Loan of Rs.1.88 lac was availed. The Corporation, looking into the creditworthiness of the petitioner, further sanctioned an additional Term Loan of Rs.17.33 lac and Soft Loan of Rs.6.67 lac for expansion of the existing Hotel during the month of October, 2001 and an Agreement of Loan was executed between the petitioner and the respondent-Corporation on 30th October, 2001. Out of the total sanctioned Term Loan of Rs.23.10 lac and Soft Loan of Rs.8.89 lac, the petitioner had availed Term Loan of Rs.23.10 lac and Soft Loan of Rs.7.89 lac on different dates and, thus, he availed total loan of Rs.30.99 lac from the respondent-Corporation.

3. As per the petitioner, he was re-paying the installments regularly, but in the year 2004, due to slow-down in the business, the performance of the Tourism Unit established by him also become slow and on account of which, his account also became irregular. The respondent- Corporation declared the account of the Firm of the petitioner, namely, M/s Hillcrest Garden Café as Non-Performing Asset (hereinafter referred to as ‘NPA’) as on 10.04.2004, with an outstanding balance of Rs.21,39,643.00. Thereafter, the respondent-Corporation took over the possession of the property in question on 26.05.2008, alleging default of Rs.30,95,692.00/- as the total outstanding balance as on the said date. Further, as per the petitioner, with a view to liquidate the outstanding dues, he entered into an agreement with one M/s Bharti Hitech Builders Pvt. Ltd. for the sale of the said property in the Month of October, 2008 and by way of a letter written to the respondent-Corporation, he made a proposal for settlement of the dues. The respondent-Corporation issued a Sale Notice of taken over Units on 01.12.2008, in terms whereof, the Unit of the petitioner was sought to be sold. The petitioner made a representation to the Corporation and detailed out the difficulties faced by him in clearing the dues. However, the property could not be sold, as no bidder came forward. Again, a Sale Notice was issued on 24.09.2009, but again, the property was not sold, as no bidder came forward. Vide letter dated 31.10.2009, the respondent-Corporation intimated the petitioner that as on 31.10.2009, an amount of Rs.48,52,040.00 was payable and advised him to pay the said outstanding amount by 31.10.2009. Thereafter, vide letter dated 7th April, 2010, the respondent-Corporation intimated the petitioner that the Corporation had granted two months’ time to him to clear the outstanding dues of Rs.48.52,100.00. Further, as per the petitioner, vide letter dated 24.05.2010, he represented the respondent-Corporation stating the los