The appellant cannot appropriate payments made by the respondent without evidence of consent or valid legal basis.

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Company Appeal has been preferred under Section 483 of the Companies Act, 1956 , [Companies Act], read with Rule 9 of the Companies (Court) Rules, 1959, challenging the Order dated 21.07.2023, [Impugned Order] passed by the learned Single Judge of this Court in Co. Appl. 1004 of 2014 titled as “IDBI vs. P.D. Gupta & Company” in Co. Pet. 72 of 1997.

2. By the Order impugned herein, the learned Single Judge has directed the Appellant to refund a sum of Rs. 1 Crore along with simple interest at the rate of 7% from the date of deposit till the date of its payment, to the Respondent herein. It has also been directed that the said payment be made by the Appellant herein within a period of two months. The relevant portion of the Impugned Order reads as follows:

“CO.APPL. 1004/2014 (for impleadment and permission)

2. This is an application where the Applicant-P.D Gupta & Company is seeking refund of the amount of Rs.1 crore which was deposited with IDBI along with interest. The Applicant also prays for impleadment as a Respondent, and permission to participate in the present petition.

3. Ld. Counsel for the Applicant relies upon a similar order dated 3^rd April, 2013 which was passed by ld. Single Judge wherein refund of an amount was directed from IDBI. The said order reads as follows:

“The question that has now arisen is whether IDBI can be permitted to retain the said amount or should it be asked to refund it to the Applicant. The stand of IDBI is that since the payment was made to it by MSL, if is not obliged to return the money to RSCL. It is, however, not denied by IDBI that it did receive the money from RSCL. Its stand is that it has no obligation to return the money to RSCL since the payment was made on behalf of MSL.

8. The stand of Official Liquidator is that since the payment made by RCSL is not pursuant to any scheme sanctioned by the Court and, in any event, the claims of the secured lenders will be dealt with in accordance with law pursuant to the orders that the Court may pass from time to time.

9. The above stand of IDBI is untenable for the simple reason that IDBI admittedly encashed the cheque by MSL only as a lead institution participating in an OTS along with other secured lenders. The OTS admittedly has not gone through with IFCI not agreeing to it. In the circumstances, there can be no justification for IDBI to continue to hold the amount of Rs. 2.25 crores. The Court has not approved the OTS in the present proceedings and so the question of the Court permitting IDBI to retain the said sum does not arise. Further, as regards the dues of the secured creditors, the funds generated through the sale of the properties of MSL pursuant to the orders of the Court will be distributed amongst the secured creditors on a pro rata basis. That will sufficiently account for the interests of all the secured creditors. IDBI is not entitled to a treatment different from other secured lenders”.

4. In the present application, A 'One Time Settlement' ("OTS‟) was agreed upon by the secured creditors following a Memorandum of Understanding ("MOU‟) dated 30 ^th March 2001. This MOU was between the potential buyers and representatives of the secured creditors, specifically MSL and IDBI. However, the potential buyer failed to make the necessary payments to the secured creditors. Consequently, the Applicant assumed the role of the potential buyer and agreed to purchase the total land of the Petitioner-company in liquidation for a sum of Rs. 6 crore in 2005. The case of the Applicant is that pursuant to OTS which was agreed, the Applicant had paid a sum of Rs. 1 crore which was deposited with IDBI. In pursuance of the Applicant‟s offer, it is stated the Applicant submitted various DD‟s to fulfil its obligation to pay the OTS amount before the end of October 2005. At the time of payment of the OTS amount it is stated that the App