Mr. K. Kannan, J.: - The writ petition challenges the rejection of a claim for consideration for One Time Settlement (for short, “OTS”), a proposal sought by the petitioner with the respondent-Bank for settling the loans which the petitioner had availed form the respondent-Bank. The proposals were required to be undertaken for consideration pursuant to direction issued in CWP No.15237 of 2005 dated 31.01.2008. The direction contained in the order was in such a situation where on the previous occasions, the Bank had considered the scheme for OTS but on every occasion, the settlement did not come through, when the petitioner was pressing for adjustment of some amounts allegedly due by the Bank to the petitioner way of rent. The guidelines of OTS also were periodically issued by the Reserve Bank of India first in the year 2000, later in the year 2003 and still later in the year 2005 that required formulations to be applied. At the time when Division Bench was issuing the direction, the Court observed that the Bank shall consider the claims of OTS within a period of one months in the light of the schemes instructions of the Reserve Bank of India dated 03.09.2005.

2. At least at the time when the Court passed the order on 31.09.2005, there was no controversy that the petitioner industry was not entitled to consideration of settlement under OTS Scheme. The consideration of OTS settlement is not merely an act of charity of a creditor bank but governed by instructions of Reserve Bank of India, which has statutory force, as laid down by the Supreme Court in a decision Sardar Associated v. Punjab & Sind Bank, 2010(1) I.S.J. (Banking) 1.

3. It appears that when the representation had been given, as directed by this Court in Division Bench ruling, it fell to be rejected by the Bank through the impugned order passed on 02.06.2008 containing the reasoning, inter alia that the Reserve Bank of India guideline indicated that the scheme was applicable only for SME category (Small, Medium Enterprises Category) and that the petitioner did not qualify for consideration under the scheme. Learned counsel appearing for the petitioner points out that the petitioner had himself sought for clarification under RTI Act form the Reserve Bank of India whether the nature of activity that the petitioner was carrying on qualified for the India has given a reply to the petitioner as follows:

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Sr. Query Reply

No.

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1. Whether cinema halls with an The government of India have enacted the micro,

investment of Rs.10 Lakh to Rs.5 small and Medium Enterprises Development

crore in plant and machinery are (MSMED) Act, 2006 on June 16, 2006 which was

covered under the definition of notified on October 2, 2006. Accordingly, our

SME under the RBI OTS policy circular RPCD. PLNFS. BC.No.63/2006-07

of 2005. dated April 4, 2007 was issued giving the modified definition as or the MSMED Act and not under the

RBI OTS policy of September, 2005. Further, in terms of the Ministry of Micro, Small and Medium Enterprises, Government of India communication bearing No.E.21(1)/2006-Pt dated July 9, 2008, service activities such as Entertainment Services (including theatres, live bands and circus services are to be treated as micro, small or medium service enterprises under MSME Act, 2006, subject to the ceilings on investments as laid down under Para 3(b) of our above circular dated April 4, 2007, a copy of which is enclosed.

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4. Learned counsel, therefore, would contend the rejection made by the respondent taking up a plea is not only inconsis