M.M.S. Bedi, J.—The present case is an astonishing instance of unreasonable and unfair attitude exhibited by the officials of Punjab and Sind Bank, a nationalized Bank, by unlawfully and fraudulently forfeiting the proceeds of the Fixed Deposit Receipt of year 2007 for a sum of Rs. 5 crores on the flimsy defence that the bidder failed to deposit the balance of sale consideration of non-performing financial assets of M/s Tensile Steels Pvt. Ltd. despite the fact that the sale is absolutely impossible on account of judicial orders and the defaulter Company having settled the matter with Bank on payment of all dues.

2. Petitioner No.1 is a Company registered under the Companies Act, 1956. Petitioner No.2 is a share holder of the Company and it carries on the business of petitioner No.1 through the agency and/or instrumentality of petitioner No.1 Company. In the course of business, petitioner No.1 indulges in acquiring and entering into the agreements with interested parties for purchase of assets of sick companies or the companies in liquidation having suitable immoveable properties for the purpose of development. Respondent No.1 is a scheduled Bank as stated in the First Schedule of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980. Respondent No.2 is its branch and is an instrumentality of the State. As per the declaration on the website of respondent No.2, working Directors of respondent No.1 are Sh. A. Bhattacharaya, Director, Ministry of Finance, Department of Financial Services, New Delhi, Sh. R. Sadanandam, RBI, Nominee Director, Sh. R. Gandhi, Additional Director (Regional Director, RBI New Delhi), Sardar Avtar Singh Mann, Officer’s Director, and Sardar Mohan Singh Sekhon, Workman Employee Director. Respondents No.1 and 2 would fall under the definition of the State within the meaning of Article 12 of the Constitution of India. Punjab and Sind Bank, respondent No.1 had been a lender to M/s Tensile Steel Limited. By virtue of a Notice published in newspaper on May 17, 2007, annexure P-2, as per the RBI guidelines, the Punjab and Sind Bank, respondent No.1 had decided to put on sale the Non-performing assets, by way of assignment on ‘without recourse basis’. The parties interested were required to submit demand draft of Rs. 10 lacs per account towards earnest money deposit (EMD) by June 20, 2007. Respondent No.3-Corus Infrastructure Pvt. Ltd., a company constituted under the Companies Act, 1956 having its registered office at Plot No.249, Sector 22, Gandhi Nagar, Gujarat, approached petitioner No.1 and informed that it had submitted a bid of Rs. 32.13 crores with respondent No.1 Bank for purchase of impaired financial assets of M/s Tensile Steel Limited, Manjalpur, Vadodara, Gujarat, hereinafter referred to as “M/s Tensile Steels”. It was informed that the bid of respondent No.3 had been accepted hence respondent No.3 requested petitioner No.1 to associate itself in acquisition of the impaired assets by rendering financial assistance. Vide letter dated July 9, 2007, annexure P-1, the Punjab and Sind Bank had intimated respondent No.3 that its bid for sum of Rs. 32.13 crore had been found to be highest and the matter was pending consideration of the competent authority. In the said letter it was clarified that the acceptance of the bid offer would depend upon the concerned litigation pertaining to the impaired financial assets of M/s Tensile Steels and acceptance by the competent authority. Petitioners were informed that respondent No.3 had obtained a Bid Form, Draft Non-Disclosure Agreement and Terms and Conditions of Sale by depositing bank drafts aggregating to Rs. 1 lac with the Bank. Thereupon, under cover of a letter dated June 19, 2007, respondent No.3 submitted a further sum of Rs. 9 lacs thus totalling a sum of Rs. 10 lacs by way of earnest money deposit as contemplated under Clause 6 of the Terms and Conditions of Sale. Vide letter dated June 19, 2007, respondent No.3 had submitted