Rajasthan High Court: Debt Recovery Tribunal Cannot Alter One-Time Settlement Terms

The Rajasthan High Court has held that a Debt Recovery Tribunal (DRT) lacks jurisdiction to modify the terms of a one-time settlement (OTS) between a bank and a borrower.

The court emphasised that an OTS is a contractual agreement, and any dispute regarding its terms must be resolved through civil courts, not the DRT.

The court ensures that settlements remain binding and prevents tribunals from overriding mutually agreed terms, thereby promoting certainty in debt resolution processes. 

Accordingly, the petition was allowed, and the order passed by the DRT was set aside.

[Bank of Baroda v U.N Automobiles Pvt Ltd.]