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It is contended that a Circular/Policy dt.01.09.2017 was issued by the respondent-Bank, floating an OTS scheme for the NPA accounts with outstanding amount of `20 Lakhs and upto `25 Crores as on 31.03.2017, and the said scheme was non-discretionary and non- discriminatory.

It is admitted that on the basis of the said policy, a letter dt.11.09.2017 was issued offering OTS to the petitioner.

It is contended that once outstanding amount payable by the petitioner had been crystallized on acceptance of the OTS proposal vide letter dt.21.11.2017, question of seeking any concession subsequently by the petitioner from the respondent-Bank does not arise.

Therefore, the contention of the respondent-Bank that in no circumstance can the Court grant extension of time for completion of the payment under the OTS, cannot be countenanced. Such a power undoubtedly exists, though not as a matter of right, and must be exercised by a High Court keeping in mind the above guidelines/principles.

Counsel for the respondent-Bank, however, sought to contend that the said judgment deals with only cases of settlement other than under the OTS scheme, and would have no application to settlement entered into under the OTS scheme, and sought to distinguish Anu Bhalla (1 Supra).

In Sardar Associates ( 18 Supra), a borrower of Punjab and Sind Bank , in terms of RBI guidelines for OTS offred a particular sum, but the Bank demanded more from the borrower as it had better security available with it , and defended it's decision saying that it was a policy decision of it's Board. The Supreme Court rejected the said plea.

2009 (8) SCC 257 14 of 23 The Supreme Court in Sardar Associates (18 Supra) held that the Reserve Bank of India is a statutory authority, that it exercises supervisory power in the matter of functioning of the Scheduled Banks, and that matters relating to supervision of the Scheduled Banks is also governed by the Reserve Bank of India Act, 1934. It held that guidelines have been issued by the Reserve Bank of India through a letter dt.03.09.2005 addressed to the Chairman/Managing Director of all Public Sector Banks; that the said letter refers to circular dt.19.08.2005 issued by the Reserve Bank of India; in terms of the said circular, guidelines for grant of OTS scheme for recovery NPAs below `10 crore were laid down; and the letter dt.03.09.2005 categorically stated that such OTS scheme had to be implemented by all Public Sector Banks and the guidelines were non- discretionary and non-discriminatory in SME Sector.

We also hold that the decision in the case of Bijnor Urban Cooperative Bank (10 Supra) cannot be interpreted to the effect that in all circumstances the High Court is helpless to extend the OTS scheme offered by a schedule Bank, since the said issue did not arise for consideration in that case.

Though, decisions of other High Courts referred to above were cited by the counsel for the respondent-Bank supporting his contentions, having regard to the decision in the case of Anu Bhalla (1 Supra) of this very High Court, which is binding on this Bench, we reject the contentions of the respondent-Bank that this Court under Article 226 of the Constitution AIR 1981 Punjab 213 16 of 23 of India has no power for grant extension of OTS to a borrower under any circumstances.