JUDGMENT

S.B. SINHA, J — 1. Leave granted.

2. Source of power on the part of the Reserve Bank of India to issue circulars and guidelines as regards one time settlement is the question involved herein. It arises out of a judgment and order dated 1.02.2008 passed in Review Petition No. 7 of 2008 and order dated 21.11.2007 passed by a Division Bench of the Punjab and Haryana High Court in C.W.P. No. 8267 of 2007 whereby and whereunder an order dated 13.04.2007 passed by the Debt Recovery Appellate Tribunal, Delhi (for short “the Appellate Tribunal”) directing the respondent - bank to settle the case of the appellants herein in terms of the said guidelines as applicable at the time of declaring the account as Non Performing Assets (NPA) and not to recover the said amount in terms of the judgment and recovery certificate dated 23.11.2006 issued by the Debts Recovery Tribunal - II, Chandigarh (for short “the Tribunal”) in Appeal No. 26 of 2007, was set aside.

3. Bereft of all unnecessary details, the fact of the matter reads as under:

Appellants herein as also the Proforma respondent Nos. 2 to 11 along with one Smt. Darshan Kaur (since deceased) obtained the facilities for grant of loan for a sum of Rs. 3, 54,50,000/- for business purposes which was being carried out by them under the name and style of M/s. Sardar Associates Limited, appellant No. 1 herein. The said amount was sanctioned and disbursed from time to time. Indisputably, the appellant No. 2 and the Proforma respondent Nos. 2 to 11 as also the said Smt. Darshan Kaur stood as guarantors. Appellant Nos. 1 and 2 as also Proforma respondent Nos. 5 and 7 also mortgaged their properties in favour of the respondent - Bank by way of security to the said amount. Defaults having been made in discharging their liabilities, their assets were declared as NPA as per the guidelines issued by the Reserve Bank of India.

4. A proceeding was initiated by the respondent - Bank purporting to be under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the 2002 Act”) for recovery of the said amount together with interest upon due service of a notice in terms of Sub-section (4) of Section 13 thereof. The total amount of claim laid before the Tribunal by the bank as against the debtors was Rs. 4,16,85,443.62 inclusive of interest upto 31.07.2003. The said application was allowed by the Tribunal where against an appeal was preferred before the Appellate Tribunal.

5. Indisputably, pursuant to the judgment and order of the Tribunal, a recovery certificate was issued for recovery of a sum of Rs. 4,16,58,581.62 along with pendent lite and future interest at the rate of 12% p.a. with quarterly rests from the date of filing of the application till realization.

It is at that stage, the appellant No. 1 approached the respondent - bank for settlement of their disputes purported to be in terms of the guidelines issued by the Reserve Bank of India. They made an offer for a one time settlement for a sum of Rs. 345.31 lakhs. The said proposal, however, was not accepted by the respondent - Bank.

6. Respondent - Bank issued a circular bearing No. 176 dated 18.10.2005. Questioning the validity of the said circular, the appellant No. 1 filed a writ petition before the High Court contending that the same was contrary to the guidelines issued by the Reserve Bank of India insofar as the same relates to the scheme for one time settlement for the Small and Medium Enterprises. A prayer was also made therein that the respondent - Bank be directed to settle the matter as per the RBI guidelines. The said writ petition was dismissed only on the premise that the appellant No. 1 had not disclosed therein that it had already approached the Tribunal for recovery of the amount in question.

7. A special leave petition filed there against which was marked as SLP (C) No. 21134 of 2006 was, however, dismissed by this Court on 31.01.2007.

8. Appella