Valmiki J Mehta, J.

The petitioner company by this writ petition under Articles 226 and 227 of the Constitution of India challenges the order dated 27.4.2009 passed by the Debt Recovery Appellate Tribunal (DRAT). The sequence of the orders of the three authorities below is as under:

(i) The first order dated 28.3.2007 is passed by the Recovery Officer in favour of respondent No. 1 herein- auction purchaser. The sale in favour of the auction purchaser was confirmed by the Recovery Officer.

(ii) The second order is of the Debt Recovery Tribunal (DRT) dated 23.11.2007 accepting the appeal of the petitioner company and setting aside the order of the Recovery Officer dated 28.3.2007.

(iii) The third is the impugned order of the DRAT whereby it accepted the appeal of the auction purchaser-respondent No. 1 herein, and set aside the order dated 23.11.2007 of the DRT meaning thereby the sale of the auction property in favour of respondent No. 1 was confirmed. It is this order which has been challenged by the borrower-petitioner company.

2. The facts of the case are that the respondent No. 2 herein filed an Original Application (OA) No. 141/2000 for recovery of its dues inter alia against the present petitioner company. This OA was decreed and a recovery certificate No. 116/2002 was issued. The subject property being plot No. G.P-38, Sector-18, Udyog Vihar, Phase-1 (E), Maruti Industrial Area, Gurgaon, Haryana. admeasuring 1923.03 sq.m was attached in execution of the recovery certificate. The property in question was put to auction on 25.1.2005 and the respondent No. 1 purchased the same for Rs. 2.72 crores. Before the order of confirmation of sale could be passed, a joint compromise application was filed by the petitioner herein and the financial institution/respondent No. 2 that a One Time Settlement (OTS) had been agreed upon between the borrower and the financial institution whereby a total amount of Rs. 4 crore was to be paid and the outstanding liquidated by 30.3.2007. Rupees 2 crores had already been paid when the joint compromise application was made before the Recovery Officer and post dated cheques of Rs. 1 crore each were handed over to the financial institution before the Recovery Officer. The Recovery Officer, however, did not accept the compromise on the ground that vested rights had accrued to the respondent No. 1 under the auction. The Recovery Officer held that the sale could not be set aside on the mere ground that the matter had been compromised between the parties for an amount higher than the bid in the auction. The Recovery Officer, therefore, confirmed the sale in favour of the respondent No. 1 and the possession of the property was also handed over to the respondent No. 1. DRT vide its order dated 23.11.2007 accepted the compromise and set aside the auction with a further direction for delivery of the property in question from the respondent No. 1 to the petitioner. DRAT by the impugned order dated 27.4.2009 has restored the order of the Recovery Officer by setting aside the order of the DRT.

3. It was argued by Learned Counsel for the petitioner before us that the DRAT fell into a grave error in relying upon, in para 14 of the impugned order, a decision of this Court reported as Industrial Development Bank of India v. Surekha Coated Tubes and Sheets Ltd. 1994 II AD (Delhi) 119 in which judgment it was held by this Court that Section 22 of the Sick Industrial Company (Special Provision) Act, 1985 (SICA) does not apply where reference u/s 15 of the SICA is pending but no inquiry u/s 16 thereof is pending. It was further held by this Court in the case of Industrial Development Bank of India (supra) that once a reference is rejected and the mere fact that appeal is pending u/s 25 would not mean that Section 22 would apply. It was held that Section 22 will not come into operation where an inquiry u/s 16 is not commenced and where the reference u/s 15 has been rejected. The Learned Counsel for the petitioner has