Mandatory upfront payment under OTS schemes is a prerequisite to consideration; rejection may stand on the decisive scheme-based ground.

An OTS proposal was held not maintainable where the borrower failed to make the mandatory upfront payment required by the scheme, because compliance with that condition was a prerequisite to consideration of the application and not a matter of right. The rejection could still be sustained on that decisive ground even though the bank's order did not expressly state it, since the ground arose from the scheme and the record. The High Court's interference with the rejection was therefore unwarranted, and the bank's decision was upheld while the borrower was left free to make a fresh proposal outside the earlier scheme.

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Issues: (i) Whether the borrower's application under the One Time Settlement scheme could be entertained without the prescribed upfront payment. (ii) Whether the High Court was justified in interfering with the bank's rejection of the application and directing reconsideration.

Issue (i): Whether the borrower's application under the One Time Settlement scheme could be entertained without the prescribed upfront payment.

Analysis: The scheme required a borrower seeking consideration of an OTS proposal to accompany the application with an upfront payment of 5% of the OTS amount, and 15% in the case of wilful defaulters. An application not accompanied by the stipulated upfront payment was not even required to be processed. The borrower had not deposited any upfront amount with the application, so the application did not satisfy the basic scheme condition.

Conclusion: The application was not maintainable for consideration under the scheme and could not be claimed as a matter of right.

Issue (ii): Whether the High Court was justified in interfering with the bank's rejection of the application and directing reconsideration.

Analysis: The rejection order did not mention non-payment of the upfront amount, but that omission did not prevent the Court from considering a decisive ground evident from the record and the scheme itself. The borrower's failure to comply with the mandatory condition went to the root of eligibility and justified rejection. Since the borrower had disabled itself from fair consideration, the High Court's interference on the premise of eligibility under the scheme was unwarranted.

Conclusion: The High Court was not justified in interfering with the rejection order, and the bank's decision was upheld.

Final Conclusion: The appeal succeeded, the judgments of the High Court and the Single Judge were set aside, and the bank was left free to proceed in accordance with law while the borrower was permitted to make a fresh proposal outside the earlier scheme.

Ratio Decidendi: A court may sustain an administrative rejection on a decisive ground arising from the scheme and the record, even if that ground was not expressly stated in the rejection order, provided the affected party had an opportunity to meet it; further, compliance with mandatory scheme conditions is a prerequisite to consideration of an OTS application.

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