PUNJAB & SIND BANKversusPUNJAB BREEDERS LTD. & ANOTHER

                             (2016] 2 S.C.R. 876



A                         PUNJAB & SINO BANK
                                      v.
                PUNJAB BREEDERS LTD. & ANOTHER
                       (Civil Appeal No. 3197of2016)
B                             MARCH 29, 2016
    [KURIAN JOSEPH AND ROHINTON FALI NARIMAN, JJ.J
           Compromise: Settlement - One Time Settlement (OTS) Scheme
  - Appellant-bank offered OTS to the first respondent for sett/eme111
  of entire dues to the bank 011 payment of Rs. 5../2 crores subject to
c bank's right to recompense that the mortgaged properties shall not
  be sold within a period of 3 years and if properties are sold within
  next 3 years then parties shall obtain prior permission of the bank
  and share with the bank 50% of increase in fair market value of the
  properties which is Rs.8.82 crores at the time of sanction of this
D settlement - In response to the offer of OTS, the first respo11dent
  managed to enter into a11 agreement with the seco11d respo11dent for
  sale of half of the mortgaged property a11d pursuant to that
  agree111ent, whole amount of Rs.5 . ./2 crores as per offer made by
  the bank was paid i11 terms of OTS - Holl'ever, bank refused to
E settle the accounts and release the mortgage on the grou11d that the
  third party i11terest having been created, the bank ll'aS entitled to
  50% affair market value - High Court directed the bank to accept
  the payment of Rs.5 ../2 crores in fit!/ and final settlement of all the
  clai111s as per the OTS proposed and release the mortgaged property
F 11·ith ji1rther direction not to sell the property for a period of' ihree
   years - Whether appellant-bank is entitled to 50% of the increase
   i11 fair market value of property fixed at the time of settle111ent in
   ter111s of OTS - Held: The creation of third party i11terest or
   arrangement by way of agreement for sale within the three year
   period is different from sale - Admittedly, sale li'OS not 111ade within
G
   the period()/' three years of'settle111ent - The only restrictio11 was on
   sale of the property within three years of the settlement - That
   admittedly havi11g not bee11 done, the appella11t cannot rest a11y claim
   under law for the share of the increase in fair 111arket 1•alue by way
   of recompe11Se -Appel/a111-ba11k directed to release the title deed of'
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                                      876
   PUNJAB & SINO BANK v. PUNJAB BREEDERS LTD. &                           877
                    ANOTHER

the mortgaged property to the first re,pondent and also handover          A
the possession of the property to the first respondent.
        Dismissing the appeal, the Court
      HELD: 1. As per the OTS proposal dated 01.03.2012. the
restriction is only on sale of the mortgaged property for a period
                                                                           B
of three years, and in case, the properties are sold within the
said lock in period of three years, the same should be done with
the permission of the bank and that the first respondent should
share 50% of the increase in fair market value of the property,
fixed at the time of sanction of the settlement. [Para 9][880-A-Il]
      2. The undisputed factual position is that the appellant-bank
                                                                          c
has not released the mortgage. The possession of the mortgaged
property has not been delivered to the fir~t respondent so far.
The three year lock in period expired on 01.03.2015. The creation
of third party interest or arrangement by way of agreement for
sale within the three year period is different from sale. Admittedly,     D
sale has not been made within the period of three years of
settlement. The scheme has not provided for any Other restriction
of involvement of third 11arty interest for settlement of the dues.
The only restriction is on sale of the property-within three years
of the settlement. That admittedly having not beeu done, the               E
appellant cannot rest any claim under law for the share of the
increase in fair market valnc by way of rccom pensc. There is
nothing to be recompensed since the bank has not suffered or
lost anything. The appellant-bank is directed to release the title
deed of the mortgaged property to the first respondent and also            r
handover the possession of the property to the first respondent
within two weeks. [Paras 10 and 11] [880-C-E] ,
        CIVlLAPPELLATE JURISDrCTION: Civil Appeal No. 3197 of
2016.
      from the Judgment and Order dated 27.09.2012 of the High Court       G
of Punjab and lfaryana at Chandigarh in Civil Writ Petition No. 4792 of
2011 (O&M).
        Rajinder \Vali, B. K. Satija, Ad vs .• for the Appellant.
        Nidesh Gupta, Parag Tripathi, Sr. Advs., Tarun Gupta, Punect,
                                                                          H
878            SUPREME COURT REPORTS                           [2016] 2 S.C.R.



A     Atul S. Mathur, Ms. Priya Singh, Mis. Khaitan & Co., Advs. for the
      Respondents.
            The Judgment of the Court was delivered by.
            KURIAN, J. !. Leave granted.
B           2. The short question arising for consideration in this case is
      whether the appellant-bank is entitled to fifty per cent of the increase in
      fair market value of property fixed at the time of settlement, in terms of
      the One Time Settlement (OTS) Scheme.
             3. As per letter dated 01.03.2012, the appellant offered OTS to
 c    the first respondent for settlement of the entire dues to the bank on
      payment ofRs.542 lakhs, subject to a few conditions. The one relevant
      for the purpose of the present appeal reads as follows:
            "The OTS shall be subject to Bank's right to recompense that the
            mortgaged properties shall not be sold within a period of three
 D          years and if the properties are sold within the next three years;
            a. The parties obtain prior permission of the bank.
            b. The parties shall share with the bank 50% of increase in FMV
            of the properties which is Rs.882.00 lacs at the time of sanction
            of this settlement."
 E
             4. Prior to the OTS offer, the bank had made several attempts to
      sell property mortgaged by the first respondent. Since the highest offer
      was of Rs.5.40 crores, the bank had given an opportunity to the first
      respondent, by letter dated 03.03.2011, to get any buyer for more than
      5.40 crores by 16.03.2011, and if not, the bank would be confirming the
 F    sale ofRs.5.40 crores. Thereafter, the OTS offer was made for settlement
      of the dues at Rs.542 lakhs by letter dated 01.03.2012. In response to
      the offer made by the bank, the first respondent managed to enter into
      an agreement with the second respondent for sale of half of the mortgaged
      property and pursuant to that agreement, the whole amount ofRs.5.42
 G    crores, as per the offer made by the bank, was paid in terms of the OTS.
      However, the bank declined to settle the accounts and released the
      mortgage on the ground that the third party interest having been created,
      the bank was entitled to 50% of the fair market value.
             5. The High Court, as per the impugned judgment, directed the
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    PUNJAB & SINO BANK v. PUNJAB BREEDERS LTD. &                                  879
                ANOTHER [KURIAN,J.]

bank to accept the payment ofRs.5.42 crores in full and final settlement          A
of all the claims, as per the OTS proposed on 01.03.2012 and release the
mortgaged property with a further direction not to sell the property for a
period of three years from 01.03 .2012. Aggrieved, the appellant-bank is
before this Court.
       6. Following are the main questions of law raised in this appeal:          B
       "E.    Whether by the impugned order, the Hon'ble High Court
              could have allowed the Writ Petition and directed the
              petitioner to accept the amount ofRs.5.42 erores and release
              the sale deed, notwithstanding the fact that as per terms of
              one time settlement sanction, the respondent No. I could            C
              not have alienated the mortgaged prope_rty for three years?
       F.     Whether by the impugned order, the Hon 'hie High Court
              has failed to consider that as per terms of one time settlement
              dated 01.03.2012, there was baron alienation forthree years
              and if the properties are sold within the next three years,         D
              the respondent No. I had to take prior permission from the
              petitioner and share 50% of increase in Fair Market Value
              of the property which was Rs.882 lacs at the time of
              sanction of the settlement?
       G      Whether by the impugned order, the Hon'ble High Court                E
              failed to consider that inspite of bar on alienation as per
              sanction dated 01.03.2012, duly accepted by respondent no. I,
              the respondent No. I clandestinely entered into an Agreement
              to Sell with respondent No.2 in respect of land measuring
              11855.5 sq.yds. for an amount ofRs.4.95 crores, without              F
              either seeking prior permission from the petitioner Bank and/
              or sharing 50% increase in the Fair Market Value of the
              Property?"
       7. Heard the learned Counsel appeared on both sides.
       8. The main contention advanced by the learned Counsel for the              G
appellant-bank is that the first respondent having entered into agreement
for sale of the property, as per OTS, the bank is entitled to 50% of the
fair market value in addition to the OTS payment. It is further submitted
that the first respondent having created a third party interest, the appellant-
bank is entitled to claim the fair market value.                                  H
880             SUPREME COURT REPORTS                          [20 I 6) 2 S.C.R.


A            9. We are afraid, the contentions cannot be appreciated. As per
      the OTS proposal dated 01 .03.2012. the restriction is on Jy on sale of the
      mortgaged property for a period of three years, and in case, the properties
      are sold within the said lock in period of.three years, the same should be
      done with the permission of the bank and that the first respondent should
 B    share 50% of the increase in fair market value of the property, fixed at
      the time of sanction of the settlement.
             I 0. The undisputed factual position is that the appellant-bank has
      not released the mortgage. The possession of the mortgaged property
      has not been delivered to the first respondent so far. The three year Jock
C     in period expired on 01.03.2015. The creation of third party interest or
      arrangement by way of agreement for sale within the three year period
      is different from sale. Admittedly, sale has not been made within the
      period of three years of settlement. The scheme has not provided for
      any other restriction of involvement of third party interest for settlement
 D    of the dues. The only restriction is on sal_e of the property within three
      years of the settlement. That admittedly having not been done, the
      appellant cannot rest any claim under law for the share of the increase
      in fair market value by way of recompense. There is nothing to be
      recompensed since the bank has not suffered or lost anything.
 E            I l. Thus, we see no error in the view taken by the High Court.
      The appeal is dismissed. The appellant-bank is directed to rek:1'c the
      title deed of the mortgaged property to the first respondent and also
      handover the possession of the property to the first respondent within
      two weeks.
 F           12. There shall be no order as to costs.
      Devika Gujral                                             Appeal disn1isscd.