BABUSHA INTERNATIONAL Vs. CANARA BANK

JUDGEMENT

(1.) IN these proceedings, under Article 226 of the Constitution of India, the petitioner, a sole proprietary concern of Shri Virender Khullar, challenges a letter dated 25th August, 2005 (hereafter "the impugned letter") written by the respondent, Canara Bank (herafter "the bank") withdrawing the One Time settlement (OTS) in respect of its (the petitioner"s) liabilities.

(2.) THE facts necessary to decide the case are the petitioner borrowed amounts from the respondent, Canara Bank in February, 1997. The total limit sanctioned was Rs. 1. 7 crores. These were commercial advances. The advances were secured through collateral security, by mortgaging property bearing No KP-124, HSIDC, Industrial Area, Kundli Tehsil, District Sonepat, haryana. The petitioner was unable to repay the amounts in time and incurred a liability to the extent of Rs. 1. 31 crores. The Bank filed an application for recovery of that amount with interest before the Debts Recovery Tribunal, (DRT)New Delhi, on 4. 6. 1999. The application was decreed by the DRT on 15. 10. 2003 and a recovery certificate for the sum of Rs. 1,34,75,360/80 was issued against the petitioner. The Bank instituted recovery proceedings being RC 154/2003 before the Recovery Officer.

(3.) THE petitioner wrote to the Bank on 19. 8. 2004 and offered, without prejudice to settle its liabilities in terms of Reserve Bank of India (RBI)Circulars, under a One Time Settlement Scheme. The Bank conveyed its acceptance, through its letter dated 10. 12. 2004 whereby the petitioner had to pay the entire amount of Rs. 85 lakhs on or before 31. 12. 2004 The petitioner was further informed that a sum of Rs. 1. 5 lakhs kept in a "no Lien Account" with the bank was adjusted towards the OTS.