In Brief
A bank offered a One Time Settlement (OTS) to a debtor, requiring Rs. 542 lakhs payment with conditions: mortgaged property could not be sold for three years without bank permission and 50% of fair market value increase had to be shared. The debtor entered into an agreement to sell half the property to a third party but made the full OTS payment. The bank refused settlement, claiming entitlement to the fair market value share due to third party involvement. The High Court directed acceptance of the OTS payment and release of the property. The Supreme Court dismissed the bank's appeal, holding that the OTS restriction applied only to actual sales, not mere agreements to sell. Since no sale occurred within three years, no compensation was due."
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