- (1.) This appeal, by grant of special leave, at the instance of UP Financial Corporation and its officials is directed against the judgment and order dated September 7, 2006 passed by a division bench of the Allahabad High Court on a writ petition (C.M.WP. No. 43800/2006) filed by the respondent company. By the impugned order, the appellants are directed to issue the no- dues certificate to the writ petitioner-respondent, release to it the title deeds of the disputed plot and to hand over to it the possession of the property (mortgaged in the favour of the appellant Corporation). The High Court order is based on the premise that it was a term of the one time settlement between the two sides that on payment of the first installment under the settlement by the respondent, the Corporation would release in its favour a piece of land, 4000 sq. yds. in area, which the respondent might sell or give on lease in order to facilitate payment of the remaining installments under the OTS. The High Court found that contrary to its obligation under the OTS, the appellant Corporation did not release the land in question in favour of the respondent. The respondent, therefore, could not be held responsible for the delay in payment of the installments under the OTS and the liability of interest on delayed payments could not be fastened on it. The High Court held that the Corporation's insistence on realizing from the respondent the amount of interest on delayed payments of the installments (a substantial sum!) even after it had paid the full amount under the OTS was unjust, unreasonable, bad and illegal. Hence, the directions to the appellant Corporation as noted above.
(2.) The respondent company took a loan from the appellant Corporation. It defaulted in repayment of the loan and with accumulation of interests the outstanding dues grew to a very large sum. According to the appellant, by the time the respondent was allowed the facility of OTS, the accumulated interests amounted to almost Rs.3 crores, which the Corporation waived off.
(3.) Be that as it may, the respondent made an application to the appellants for a one time settlement of its outstanding dues. The application was accepted by the appellants and intimation was given to the respondent vide letter dated August 5, 2002 containing the terms of the settlement. The relevant terms of the settlement as stipulated in the aforesaid letter are as under - JUDGEMENT_940_TLPRE0_2011_4.html JUDGEMENT_940_TLPRE0_2011_1.html;