The court emphasized the principle of satisfaction with a one-time settlement amount and the ability to adjust the amount received from the auction purchaser, leading to the dismissal of the recovery proceeding.

S.J. Mukhopadhaya, J.

The revision application has been preferred by the Industrial Development Bank of India Ltd. (hereinafter referred to as Bank) against order dated 24th Dec., 2007, passed by the Debts Recovery Appellate Tribunal, Chennai (hereinafter referred to as Appellate Tribunal) in R.A. No.42/07. By the said order, the Appellate Tribunal recalled its earlier order dated 14th Dec., 2007 in view of the joint memo filed by the appellant (1st respondent herein) and the 7th respondent and disposed of the appeal in terms with the joint memo.

2. The only plea taken by the petitioner-Bankis that the Appellate Tribunal passed the impugned order on 24th Dec., 2007, without notice and opportunity to the Bank.

3. The question arises for consideration is whether the impugned order, in any manner, affects the right of the petitioner-Bank.

.4. It appears that one M/s.Times Guarantee Ltd., filed a company petition, C.P. No.122/97 for winding up the 1st respondent, M/s.Rajalakshmi Mills (a company under the Companies Act, 1956) and winding up order was passed therein on 7th April, 2000, but it was set aside in O.S.A. No.179/01.

.The Bank was the secured creditor and the company being the borrower, the Bank preferred an original application before the Debts Recovery Tribunal-II, Chennai, (hereinafter referred to as DRT) for recovery of the debts. Initially, DRT was informed that the company was under liquidation, but later on, the Official Liquidator reported the DRT that winding up order has been set aside. The original application was disposed of on 9th Jan., 2002 on the basis of a memo of compromise.

5. It appears that subsequently a recovery certificate was issued on 12th June, 2002 vide DRC No.79/02 for a sum of Rs.4,27,12,951/=. The Recovery Officer attached the secured assets (building) except office building, which was in a dilapidated condition without any roof or beams. The company filed an application for suspension of attachment and some step was taken for demolition of the factory building. The property was put up on auction on 28th May, 2003, by fixing upset price at Rs.18 Crores, but there was no bidder. The property was again put on public auction on 29th Oct., 2004, fixing upset price of Rs.15.50 Crores; but in absence of any bidder, a third time it was put for public auction on 27th Feb., 2004 fixing upset price as Rs.13 Crores, but there was no bidder. A fresh valuation was obtained by the Bank and once again it was put up for public auction on 30th Aug., 2004 by fixing upset price of Rs.12.50 Crores. The 7th respondent, Mr.K.N.Ramajeyam was declared successful bidder having offered Rs.15.08 Crores and paid 25% of the bid amount inclusive of the Earnest Money Deposit.

.6. The company (borrower) filed a writ petition in W.P. No.25635/04, wherein, this Court passed interim order on 19th Sept., 204, and the confirmation of sale was stayed. The Recovery Officer was requested to keep the sale consideration in an interest bearing account till the order of stay was vacated. The auction purchaser (7th respondent herein) filed a petition in I.A. No.534/04 before DRT-I, Chennai for depositing the rest of the 75% of the bid amount, which was allowed on 1th Oct., 204. The 25% of the sale consideration earlier paid was kept in fixed deposit in view of order passed by the Tribunal.

7. In the meantime, the borrower (company) approached the Bank for one time settlement. On 30th Aug., 2005, the Bank confirmed for acceptance, a sum of Rs.4 Crores, towards one time settlement. Pursuant to some understanding between borrower and Bank, one M/s.Pricol was to settle all the dues, which the Bank was entitled from the borrower. Therefore, the Bank requested M/s.Pricol to settle all the creditors, statutory authorities and labour dues of borrower before finalising the OTS proposal of Rs.4 Crores. M/s.Pricol paid all the statutory dues, secured and unsecured creditors on behalf of the borrower (company) whereinafter on 26th