Enforcement Of OTS Proposal

The Hon'ble Supreme Court, in Devidayal Castings Private Limited vs. Haryana Financial Corporation and Ors.¹ has decided an issue as laid down here:

Whether the decision of the Executive Committee, dated December 22, 2005, as approved by the Board of Directors of the Corporation, not to accept the settlement amount under the policy under force in cases where the value of the secured properties is more than the said settlement amount, amounts to change of policy to the detriment of the borrower and, therefore, the Corporation should be held bound to accept the settlement amount as per policy in force?

FACTS

In 2005, the Corporation adopted and promulgated a policy known as "The Policy For Compromise Settlement of Chronic Non-Performing Assets (NPAs) Of Haryana Financial Corporation, 2005", whereby, the borrowers are given option to settle on the basis of the principal amount of the outstanding in the loan accounts as on the date on which the account was declared