The central legal point established in the judgment is the borrower's failure to comply with the OTS Scheme and the court's consideration of the equities involved in the case.

ORDER :

1. Leave granted in the Special Leave Petitions.

2. The appellant – TSR Financial Services Pvt. Ltd. in the appeals arising out of Special Leave Petition (Civil) Nos.28335-28336 of 2015 is the auction purchaser whereas the appellant – The Bihar State Credit and Investment Corporation Ltd. (hereinafter referred to as “Financial Institution”) in the appeals arising out of Special Leave Petition (Civil) Nos.28787- 28790 of 2015 is an incorporated Financial Institution which had granted financial accommodation/credit to the borrower – M/s Deepak Electro Casting (India) Pvt. Ltd., who is respondent No.5 in appeals arising out of Special Leave Petition (Civil) Nos.28335-28336 of 2015 and respondent No.1 in appeals arising out of Special Leave Petition (Civil) Nos.28787-28790 of 2015.

3. The challenge in the present appeals is to an order of the High Court dated 20th May, 2015 by which the sale in favour of the appellant – TSR Financial Services Pvt. Ltd. (i.e. the auction purchaser) has been interdicted in Letters Patent Appeal(s) in confirmation of the order passed in the writ petition(s) by the learned single judge of the High Court. The High Court in the order(s) under challenge had thought it proper to interdict the sale in favour of the auction purchaser primarily on the ground that the same was effected and the property in question was delivered to the auction purchaser even before the expiry of the last date of the One Time Settlement (hereinafter referred to as “OTS”) Scheme of which the borrower was entitled to seek benefits. The fact that the first auction sale was set aside/disapproved by the Board of Directors of the Financial Institution which had resulted in a second sale, without, however, any return of the purchase price and possession of the property in question was also taken into account by the High Court to arrive at the impugned conclusion. The High Court, therefore, doubted the bona fides of the sale transaction including the amount at which the sale was effected.

4. We have heard the learned counsels for the parties and have considered the matter.

5. The first sale notice is dated 11th December, 2004 pursuant to which the appellant – TSR Financial Services Pvt. Ltd. (the auction purchaser) offered an amount of Rs.60.21 lakhs on 20th December, 2004. The said offer having been accepted by the Financial Institution on 23rd December, 2004 the appellant – TSR Financial Services Pvt. Ltd. paid Rs. 15 lakh i.e. 25% of the offered amount on 15th January, 2005. Thereupon on 10th February, 2005 the Financial Institution issued notice to the respondent – borrower giving it an opportunity to pay the amount of Rs.60.21 lakhs within ten (10) days which amount was offered by the auction purchaser. The respondent – borrower did not act in terms of the aforesaid notice/letter/ communication dated 10th February, 2005. Possession of the property in question was handed over to the auction purchaser on 22nd March, 2005. What happened thereafter is a series of letters/communications by the respondent – borrower with regard to the payments due under the OTS and indicating its agreement/readiness to pay the OTS amount. No payment, however, was forthcoming. In these circumstances, the auction purchaser paid the balance amount i.e. Rs. 30 lakhs on 11th April, 2005. However, it appears that on 5th September, 2005 the Board of Directors of the Financial Institution refused to approve the sale made in favour of the auction purchaser on the ground of inadequacy of the value fixed which, according to the Board of Directors of the Financial Institution should not have been Rs.60.21 lakhs but should have been at about Rs.65.34 lakhs. The aforesaid decision of the Board of Directors led to cancellation of the bid of the auction purchaser of Rs.60.21 lakhs. A fresh advertisement/sale notice came to be issued on 24th January, 2006, which, incidentally, was followed by another communication dated 4th February, 2006 by the Financial Institution