PUNJAB & SIND BANK versus PUNJAB BREEDERS LTD. & ANOTHER

Citation: [2016] 2 S.C.R. 876 · Decided: 29-03-2016 · Supreme Court of India · Bench: KURIAN JOSEPH · Disposal: Dismissed
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(2016] 2 S.C.R. 876 
PUNJAB & SINO BANK 
v. 
PUNJAB BREEDERS LTD. & ANOTHER 
(Civil Appeal No. 3197of2016) 
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 
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 
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 
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 
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 
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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PUNJAB & SINO BANK v. PUNJAB BREEDERS LTD. & 
877 
ANOTHER 
the mortgaged property to the first re,pondent and also handover 
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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 
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 
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, 
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 
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 
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 
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, 
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SUPREME COURT REPORTS 
[2016] 2 S.C.R. 
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Atul S. Mathur, Ms. Priya Singh, Mis. Khaitan & Co., Advs
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