The article analyses the law related to One Time Settlement "OTS." The article discusses the law that OTS cannot be claimed as a matter of right from the bank. A court of law cannot direct OTS because that would mean the court is directing rescheduling of a loan. Where a creditor is enforcing its liability upon the debtor, the debtor has no legal right to claim that the claim be settled on favourable terms proposed by debtor whereby the claim of the creditor is reduced. This rule is discussed and analysed in light of cases: D.K. Gupta & Anr V/s Oriental Bank of Commerce, 127 (2006) DLT 488; M.M. Accessories V/s U.P. Financial Corporation, 2002 (46) ALR 261; Haryana Steel & Alloys Ltd. V/s IFCI Ltd. & Anr, LPA No. 1947/ 2006. The article clarifies the difference between OTS, which is governed by directions/ circulars issued by the RBI and out of court settlement which is governed by Section 89 of the Code of Civil Procedure, 1908.