![](/Images/leaves1.png)
Delhi HC sets aside Punjab & Sind Bank's decision to withdraw its Rs 120 cr OTS given to real estate co Ambience Pvt Ltd
7/8/2024 3:29:00 PM
Terming it “arbitrary and unsustainable,” the Delhi High Court has set aside the Punjab and Sind Bank's decision to withdraw its Rs 120 crore one-time loan settlement (OTS) given to real estate firm Ambience Pvt Ltd for the construction and development of a residential project in Noida, UP. The HC said that it is well settled that OTS offer, its acceptance and the sanction letter constitute a sufficient contract. “Thus, the Punjab and Sind Bank, which is a nationalized bank and an instrumentality of the State, cannot act arbitrarily or whimsically in matters of contract. OTS is binding on the bank and cannot be unilaterally withdrawn after accepting payments.” “Accordingly, the letter dated August 1, 2023, issued by the bank withdrawing the OTS (one-time settlement), is hereby set aside. Consequently, the bank is directed to release the securities furnished by the company in the subject Loan Account, and release charge thereon,” Justice Mini Pushkarna held, adding that the withdrawing the OTS is a “cryptic order, bereft of any reasons.” Citing the law laid down by the Supreme Court, the judge said that it is clear that terms of sanction are alone final and binding on the parties. “Any negotiations or discussions, prior to the sanction or subsequently consented to be added by one party, which is not reflected in the Sanction Letter, is not binding on the parties. Therefore, the averments made by bank that certain discussion took place prior to sanction which provides for a right to recompense to the bank, cannot be countenanced. Terms of negotiations which were not subsequently made part of the sanction, cannot be a binding obligation,” she added. Ambience was granted a term loan of Rs 155 crore by P&S Bank towards part financing for the construction and development of a Real Estate Project at Sector-50, Noida under Multiple Banking Arrangement in March 2013. Other banks Punjab National Bank (erstwhile Oriental Bank of Commerce) and HDFC Ltd had also advanced loan of Rs 124 crore and Rs 25 crore, respectively for the project. Initially the loans were sanctioned and disbursed by the banks under Multiple Banking Arrangement. Later on, consortium was formed amongst the participating banks and PNB was appointed as the lead bank. The company had repaid the full loan of HDFC in July 2018. With a view to pay off its debts, the company in February 2023 made separate OTS proposals to PNB and Punjab and Sind Bank. The company’s offer of OTS of Rs 122 crore was accepted by Punjab and Sind Bank. In May 2023, the company had forwarded a no-dues certificate to Punjab and Sind Bank which it received from PNB, stating that the entire dues of the latter had been fully repaid in normal course without a one-time settlement. Thereafter, on August 1, last year, the builder deposited the entire OTS amount to Punjab and Sind Bank, which withdrew the extension of time granted to the firm and also recalled the OTS alleging deviation and concealment by the builder. Punjab and Sind Bank alleged that the company misrepresented them and had given a better offer to Punjab National Bank by making full payment to the latter. However, the HC rejected the bank’s stand, saying Ambience had paid the entire OTS amount along with interest, stipulated in the sanction, thus, there is no question of any deviation or violation or breach of the sanction terms. Source : The Economic Time
![](/Images/leaves2.png)
INDIA