The bank's acceptance of the OTS proposal created a binding agreement, and its attempt to withdraw the proposal was not justified.

SANJAY KISHAN KAUL, J.

Rule DB.

2. Learned counsel for respondents accept notice.

3. At request of learned counsel for the parties, the petition is taken up for final disposal.

4. The respondent No. 3-M/s Divpreet Organics Ltd. availed of a loan facility from respondent No. 1-Bank on 9.7.1997 which loan was secured by the mortgage of the residential house C-56, Ganesh Nagar, New Delhi, owned by the deceased father of the petitioners. The loan went into default with a result that the respondent-Bank filed Original Application for recovery of Rs.51,53,123/- against respondent No. 3-Company while also impleading late father of the petitioners. Only two legal heirs of late father of the petitioners are stated to have been impleaded without impleading the others and this suit was decreed on 2.11.2004.

5. A second set of proceedings was initiated by the respondent-Bank under Section 13(2) the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the said Ac) against the mortgaged property on 16.12.2003. It appears from the petition that thereafter there was silence and a second notice under Section 13(2) of the said Act was issued on 24.8.2007. The endeavour of the petitioners to challenge this action was not fruitful and even possession notice dated 21.9.2012 was issued. In order to save the property in the proceedings filed by the petitioners before the Debt Recovery Appellate Tribunal (DRAT), offer is stated to have been made for deposit of 50% of the notice amount, but no interim orders were granted. However, the auction failed as there was no bidder.

6. The respondent No. 3-Company submitted an OTS proposal to the respondent-Bank for an amount of Rs.1.02 crores under the policy of the respondent-Bank and after discussions, this amount was enhanced to Rs.1.10 crores as per letter dated 13.5.2013 which was accepted on 16.5.2013 by the Chief Manager of the respondent-Bank dealing with the Asset Recovery Management Branch. The terms of settlement are reproduced herein under :-

“Dear Sir,

Reg: One Time Settlement (OTS) offer in NPA A/C : M/s. Divpreet Organics Ltd.

***

This is with reference to your letter dated 13.5.2013 vide which you have offered Rs.1.10 Crores for final settlement of the captioned account. In this regard, it is submitted that your OTS proposal was put up to Competent Authority who has approved the same for Rs.1.10 crores, with the following terms and conditions –

-Rs.10.00 Lacs deposited with bank in no lien account (which is kept in FDRs) shall be appropriated immediately on approval of OTS;

-Rs.10.00 Lacs shall be deposited within 24 hours from the date of conveying the approval of OTS;

-The remaining amount of OTS shall be deposited within three months from the date of conveying the approval of OTS.

-If the full OTS amount is not paid within the period of 3 months from the date of conveying approval of the OTS, it will be treated as cancelled. Default in payment as per sanction of OTS shall render the OTS as failed and all reliefs and concessions given under OTS shall stand withdrawn automatically and bank will be at liberty to continue its action under SARFAESI Act and recovery proceedings before Hon'ble DRT for recovery of bank dues in terms of Recovery Certificate;

-Party shall withdraw their claims/counter claim/criminal case filed against the bank/its officials immediately.

-Charges on security/Title Deeds of the property mortgaged shall be released only after receipt of entire OTS amount along with interest, if any and after withdrawals of cases filed/pending against bank or/and its officials by the borrower and other interested parties in respective Courts, Tribunals, or any other forum.

-The terms of OTS shall be recorded before the Hon'ble DRT-II, Chandigarh immediately;

-Compromise is being considered by the bank as a commercial decision and shall have no bearing whatsoever on the ongoing criminal case/investigation, if any, being ca