The borrower's right to redeem the mortgage continues until the sale certificate is issued, and the OTS Policy applies retroactively, preventing the bank from proceeding with the sale.

JUDGMENT

M.S. Ramachandra Rao, J. - These two Writ Petitions arise between the same parties in relation to the same transactions, and therefore, they are being disposed of by this common order.

The Background facts

2. M/s. R.S. Mills, a proprietory concern ( for short the borower) had availed a cash credit limit of Rs. 2.25 Crores and a term loan of Rs. 1.75 Crores totaling Rs. 4 Crores from the State Bank of India ( for short 'the Bank' ).

3. Since the borrower had defaulted in payment of the loan, on 28.06.2013 a notice under Section 13(2) of the SARFAESI Act, 2002 was issued by the Bank claiming Rs. 4,08,13,684.50 ps. allegedly due as on 26.06.2013 on which date the Bank claimed that the loan account has become NPA.

4. The borrower contends that after the receipt of the notice under Section 13(2) of the Act, between the period 29.06.2013 and 31.03.2016, he paid Rs. 3,17,81,400/- to the Bank but the Bank did not upgrade his account to a standard account category as per the RBI guidelines.

5. The Bank subsequently issued on 26.12.2014, a notice under Section 13 (4) of the Act to the borrower.

6. It also issued a sale notice on 23.06.2015 which was challenged by the borrower before the DRT-II, Chandigarh by filing SA No.333 of 2015.

S.A No.333 of 2015

7. The said SA came up for hearing on 22.06.2015, and the borrower offered to pay the dues of the Bank and further to show its bona fides offered to hand over the keys of it Petrol Pump to the Branch Manager of the Bank as security. While staying the e-auction which was to take place, borrower was directed by the Tribunal to hand over the key of the Petrol Pump on the next date of hearing i.e. by 24.06.2015.

8. On the adjourned date, SA No.333 of 2015 was disposed of recording that Rs. 3 Lakhs had been deposited by the borrower, and he was willing to pay the interest on the amount mentioned in the notice issued under Section 13(2) of the Act on 28.06.2013 at 10% per annum simple on reducing balance, but the Tribunal directed him to pay balance amount by 15.01.2016 with interest to 11% per annum.

9. The Tribunal held that if there is any default in payment which was to be cleared by 15.01.2016, concession granted to the borrower would be withdrawn and the Bank would be at liberty to sell the property.

10. Three keys of the property of the borrower were handed over to the Branch Manager of the Bank. The Tribunal recorded that if the payments were made as per the schedule or earlier, title deed and keys would be returned to the borrower, and the mortgage created by the borrower would stand discharged.

Subsequent events

11. As stated above, the borrower claims to have paid Rs. 3,17,81,400/- during the period between 29.06.2013 and 31.03.2016.

The One Time Settlement of 2018

12. Since the entire dues were not cleared and since the Bank introduced a SBI-OTS Policy of 2018 on 25.09.2018, it offered to settle the account at OTS of Rs. 1,36,07,363/- out of which 5% i.e. Rs. 6,80,368/- was required to be deposited at the time of application for OTS being made, further 15% i.e Rs. 20,41,105/- to be deposited within 30 days, and the balance within six months.

13. The borrower wrote a letter on 29.09.2018 disputing calculation of the OTS amount fixed by the Bank contending that it had already been paid Rs. 3,17,81,400/- as against the demand of Rs. 4,08,12,365/-and requested the Bank to give the break-up of the calculations of the OTS amount while attaching the demand draft of Rs. 6.81 Lakhs towards 5% of the OTS application money, for being covered under the OTS scheme.

14. The Bank replied on 29.09.2018 to the borrower that the OTS has been rightly calculated and that the scheme is unconditional, and it is open till 30.09.2018.

Events in 2019

15. On 30.03.2019, the borrower prepared a demand draft of Rs. 64 Lakhs, but the Bank did not accept the same and instead issued a sale notice on 08.05.2019 putting the properties of the borrower for sale.

16. The borrower filed CWP No.9848 of 2019 before this Court, but w