the terms of the OTS were independent of any condition that might have come from the respondent in course of negotiations preceding the OTS or any condition that the respondent might have put in its application for grant of OTS. The terms of the OTS would also not be controlled or altered by any decision taken in any regional industrial meeting chaired by the State’s Industrial Commissioner. The terms of the OTS would continue to bind the respondent until those are duly changed and amended by the Corporation.

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 NON-REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.2160 OF 2007

U.P.FINANCIAL CORPORATION & ORS. ... APPELLANTS

 VERSUS

M/S SRI BHARAT PAPER UDYOG P.LTD. & ORS. ... RESPONDENTS

 J U D G M E N T 

Aftab Alam, J.

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- 

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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 

 3

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 -

 "1. That the settled amount of Rs. 28,50,000/- under OTS shall 

 be paid as under:

 (i) Earnest Money (Already Paid) Rs. 2,85,000.00

 (ii) Down payment within one month

 i.e. upto 04.09.2002 Rs. 4,28,000.00

 (iii) Balance within 8 equal quarterly 

 installments of Rs. 2,67,125/- each, 

 commencing from 15.11.2002 Rs. 21,37,000.00

 ---------------------

 Total Rs. 28,50,000/-

 ---------------------

 The repayment schedule as mentioned above should be strictly 

 adhered to and any deviation will be liable for cancellation of 

 facilities granted under One Time Settlement while you will be 

 entitled for interest free period upto 20.09.2002 Interest @ 16% 

 shall be payable on outstanding OTS amount after interest free 

 period which shall be payable quarterly on 20th March, 20th 

 June, 20th September and 20th December.

 1. That the installments of OTS fixed will not be in 

 any case linked with the sale of assets of the unit 

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 and the OTS installments fixed on schedule dates 

 will be paid by the party on the due dates." 

 (emphasis added)

4. In the letter dated August 5, 2002 by which the respondent's 

application for one time settlement of its dues was accepted by the 

Corporation, there is absolutely nothing to suggest that on payment of the 

first installment within one month i.e. by September 4, 2002, the 

Corporation would release the piece of land in question to the respondent so 

as to facilitate payment of the subsequent installments by it by selling or 

leasing out the land.

5. According to the respondent, however, the terms contained in the 

letter dated August 5, 2002 are not conclusive on the issue. The one time 

settlement was arrived at after a protracted negotiation involving, besides the 

respondent company and the appellant Corporation, the Divisional Udyog 

Bandhu, Meerut. Further, in course of the negotiations certain terms had 

been arrived at which were finally formalized in the OTS. The counsel 

appearing for the respondent invited our attention to a letter dated July 3, 

2002 addressed on behalf of the respondent to the Additional Director of 

Industries (WZ), Meerut. In this letter, after referring to the decisions of the 

Divisional Udyog Bandhu, Meerut, dated November 1, 1999 and March 14, 

2001 and further referring to the discussions held between the parties, it was 

 5

stated that the OTS with the Corporation would be finalised and settled 

under certain terms mutually agreed between the parties as enumerated from 

paragraph 1 to 4 of the letter. Paragraph 4 on which the counsel laid great 

stress reads as under - 

 "(4) Balance 75% of settled O.T.S. amount is payable within 

 2 years in 8 equal quarterly installments upto July 2004 

 with applicable simple interest as per O.T.S. matrix and 

 guidelines of the Corporation after release of spare 

 factory land of 4000 sq. yds. as per settlement."

 (emphasis added)

6. The counsel also referred to a letter dated August 22, 2006 from the 

General Manager of the Corporation to the Executive Director, Udyog 

Bandhu, Lucknow. In paragraph 4 of the letter there is a reference to the 

release of 4000 sq. yds. of land of the respondent's unit, subject to certain 

conditions. 

7. He also referred to the minutes of the regional industrial meeting held 

on June 22, 2006 under the Chairmanship of the Industrial Development 

Commissioner, UP. In those minutes too there is some reference that even 

after having received 25% of the OTS amount the Corporation had not 

released the land in question in favour of the respondent.

8. The main emphasis of the counsel for the respondent, however, was 

on the letter dated July 3, 2002 and it was contended that the condition 

 6

contained in paragraph 4 of that letter (as quoted above) must be construed 

as one of the conditions of the OTS, binding upon the Corporation.

9. Counsel for the appellants, on the other hand, submitted that there was 

no such condition in the OTS. On the contrary, the OTS made a clear 

stipulation as to levy of interest on delayed payments of the installments.

10. In view of the divergent stands of the parties we asked the counsel for 

the Corporation to produce the original records, including the original copy 

of the letter dated July 3, 2002, that was submitted on behalf of the 

respondent to the Corporation. In pursuance of our direction, the original 

record was produced before the court. 

11. In the original copy of the letter dated July 3, 2002 paragraph 4 reads 

as follows - 

 "(4) Balance 75% of settled O.T.S. amount is payable within 

 2 years in 8 equal quarterly installments upto July 2004 

 with applicable simple interest as per O.T.S. matrix and 

 guidelines of the Corporation."

After the above, which is in type, the following (on which the entire case of 

the respondent is based) appears to have been added by hand -

 "after release of spare factory land of 4000 sq. yds. as per 

 settlement." 

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12. A bare perusal of the letter dated July 3, 2002 as it was originally 

submitted to the Corporation and as it is contained in the Corporation's 

records, makes it clear that the respondent had acknowledged that after 

payment of the first installment the balance 75% of the OTS amount would 

be cleared off in eight quarterly installments upto July 2004 and the 

condition of release of the land was not there in the letter as it was originally 

submitted to the Corporation. The release of land is a later addition, is 

evident from the fact that the cut off date July 2004, for clearing off the 

entire OTS amount does not match with that condition. 

13. In any event, in regard to the payment schedule, the respondent was 

bound by the terms of the OTS. Further, the terms of the OTS were 

independent of any condition that might have come from the respondent in 

course of negotiations preceding the OTS or any condition that the 

respondent might have put in its application for grant of OTS. The terms of 

the OTS would also not be controlled or altered by any decision taken in any 

regional industrial meeting chaired by the State's Industrial Commissioner. 

The terms of the OTS would continue to bind the respondent until those are 

duly changed and amended by the Corporation.

 8

14. For the reasons, discussed above, we are satisfied that the respondent 

was not entitled to the relief claimed on its behalf and the writ petition filed 

in the High Court was liable to be dismissed. The order of the High Court is, 

accordingly, set aside and the writ petition filed on behalf of the respondent 

is dismissed. The appeal is allowed with costs amounting to Rs. 20,000/-. 

 ..............................J.

 (Aftab Alam)

 ..............................J.

 (R.M. Lodha)

New Delhi;

September 8, 2011.