Case Law Details
Mohanlal Patidar Vs Bank of Maharashtra (Madhya Pradesh High Court, Jabalpur)
Facts- The Petitioner had borrowed a loan from the Respondent and intended to repay it in terms of One Time Settlement (OTS). The Bank communicated to the Petitioner that as per the settlement formula given in the scheme, the OTS amount was quantified to be Rs. 36,50,000/-. The Petitioner, in furtherance thereof, deposited Rs.35,00,000/- with the Bank.
However, in its correspondence later, the Bank informed the Petitioner that his proposal was put up before the competent authority, which sanctioned the compromise proposal on certain terms, whereby the OTS amount was increased to Rs.50.50 Lakhs as full and final settlement of the dues.
The Petitioner argued that after he deposited maximum amount within the stipulated time, the only option left with the Bank was to proceed further after the stage of issuance of ‘intimation letter, and if he was to be found eligible, issue a ‘sanction letter’.
Conclusion- The Court held that the Bank could not have unilaterally changed the quantified OTS amount to Rs.50,50,000/- after correctly quantifying the OTS amount to be Rs.36,50,000/-. The same would be against the principles of natural justice, and also runs contrary to the doctrine of Legitimate Expectation.
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