Willful disobedience of court orders and the enforcement of One Time Settlement Scheme.

A. ARUMUGHASWAMY, J.

1. The Company Application is filed by the applicant to issue suitable direction to the 7th respondent Canara Bank to accept the payment of Rs.32,72,000/- as one time settlement.

2. In the affidavit filed in support of the application, it is averred that the applicant is a shareholder in M/s.Jayalakshmi Mills (P) Limited holding 1104 shares out of the total 7000 equity shares which was wound up by the orders of this Court dated 24.8.1991 and during April, 2004, the Official Liquidator, the 1st respondent herein brought the immovable property of the said mill for public auction. At that time, the applicant filed a C.A.No.564/2004 and obtained an order of interim stay of the said auction and also directed the Directors to pay a substantial amount to the credit of the above C.P. It is further averred that the 7th respondent herein had extended certain credit facilities to the Mill and Rs.32,72,000/- is outstanding during the year 1991 and the O.A. Filed by the bank in this regard has been transferred to the Debts Recovery Tribunal, Coimbatore and numbered as T.A.1096/2002. Since the Reserve Bank of India has issued a Circular dated 3.9.2005 to all the Public Sector Banks regarding One time Settlement Scheme, the applicant is before this Court with this application.

3. In the counter filed by the 7th respondent, it has been stated that the loan was sanctioned initially for Rs.5 Lakhs and subsequently, the same was enhanced in the year 1996 and the total fund under all categories enjoyed by the company under liquidation were to the tune of Rs.71.15 Lakhs. It is further averred that since the company under liquidation failed to make the payment, the respondent bank has filed T.A.No.1092/2002 before the Debts Recovery Tribunal, Coimbatore for realizing the dues and the same is pending disposal and total 7.95 acres together with the factory building constructed thereon has been pledged along with 8545 Equity shares of M/s.Madras Aluminium Company and 160 Equity Shares of South India Viscose Limited and subsequently, the same was transferred in the name of the respondent bank. The company has been wound up as per the orders of this Court. It is further averred that the shares have been sold for Rs.2.23 Crores and after giving credit to the sale proceeds, a sum of Rs.7,20,53,651.56 is due as on 31.12.2005. Therefore, the application has to be dismissed.

4. The Point for consideration is:-

Whether the Applicant has to pay any amount to the respondent bank; if so, how much amount he has to pay?

5. Learned Senior Counsel appearing for the applicant submitted that even though the petitioner has filed the present petition for accepting the payment of Rs.32,72,000/-, after filing of this application only, they came to know that the shares have been sold against the orders passed by the Division Bench of this Court. The learned Senior Counsel further submitted that even though one time settlement has been agreed between the parties on 25.11.2003 for Rs.180 Lakhs and towards token of the settlement, the petitioner also has paid Rs.60 Lakhs to the respondent bank. Even after six months, the bank has not agreed to release the documents and they returned the amount. Hence he prayed that the bank may be directed to pay the excess amount collected by them by way of selling the shares of the applicant.

6. Learned Senior Counsel for the 3rd respondent submits that since they were under the impression that selling of shares is no way connected with the proceedings of winding up, they sold the shares. Therefore, the present application has to be dismissed.

7. Heard both sides and also perused the materials available on record.

8. From the perusal of the records it is seen that the present applicant has committed default in payment of a sum of Rs.88,51,992.26 on 1.1.1993 and thereafter since it was not paid in time, the Canara Bank filed O.A.No.937 of 1999 before the Debt Recovery Tribunal at Chennai on 11.1.1993 for rec