By the Court.—Challenge in this petition and connected petition is directed against the sale proclamation dated 22.11.2006 issued by respondent No. 2 contained in Annexure 8 to the writ petition.

2. The petitioners, M/s. Naresh Spinners Limited, a company registered under the Companies Act and engaged in the business of manufacturing of cotton yarn was initially established with the appellation Amausi Textiles Mills Ltd. and subsequently, it was christened as M/s. Naresh Spinners Ltd. For its effective working, the Company opened a cash credit limit account for Rs. 50 lac under an agreement with the State Bank of India Main Branch Lucknow, which was subsequently enhanced, to 75 lacs and thereafter to Rs. 95 lac with interest at the rate of 17% per annum. The company it would appear ran into rough weather and outstanding in the account overshot the said limit. Subsequently, the said limit was further enhanced. Again, outstanding against the company overshot the limit. With repeated failure to liquidate the liability, it would appear, the Bank served the notice. It is in this perspective that present litigation erupted.

3. Heard Sri Umesh Chandra, learned Senior Advocate assisted by Sri Virendra Misra, learned Counsel for the petitioners and Sri Mohd. Arif Khan, learned Senior Advocate assisted by Sri D.P. Dwivedi and Sri Sharad Dwivedi appearing on behalf of the State Bank of India.

4. Learned Counsel for the petitioners has urged that due to various odd situations, the Company was compelled to close manufacturing work in 1993 and all the machineries were sold off in auction proceedings initiated for recovery of certain dues towards payment of liabilities accruing against the Company. To begin with, a suit was instituted by the Bank for recovery of certain amount against the petitioners, which suit subsequently stood transferred to the Debt Recovery Tribunal (DRT) where it culminated in being decreed on 23.1.2002. During the execution proceedings, the parties agreed to One Time Settlement (OTS) in 2003 as contained in the letter dated 28.11.2003. The Bank nodded in acceptance the proposal as contained in the letter dated 28.11.2003 vide letter dated 29.3.2004 of the Bank subject of course to the condition of its approval by the DRT, Lucknow. It would transpire from the record that Debt Recovery Tribunal by the order dated 2.9.2005 gave approbation to one time full and final settlement for repayment of Rs. 1.28 crores. The petitioners, in observance of the conditions of One Time Settlement, deposited Rs. 40.98 lakhs by 19.6.2006, which was accepted by the Bank.

5. According to the learned Counsel for the petitioners, the petitioner No. 2 who is the Managing Director of the Company met with an accident and due to accident followed by other adverse circumstances staring stark in his face, failed to make deposit as agreed under One Time Settlement and it is in this perspective, it is urged, a sale proclamation was issued on 22.11.2006. Aggrieved by the action of the Bank, it is further submitted, the petitioners approached this Court by way of the instant writ petitions and this Court vide order dated 29.12.2006 permitted the petitioners to deposit Rs. 41.00 lakhs immediately and also permitted to deposit Rs. 46.00 lakhs within next three months. For ready reference the interim order dated 29.12.2006 passed by this Court is quoted below :

“This writ petition has been presented during winter Vacations on the urgency that the property of the petitioners which is a Factory and land appurtenant to it, is being put to auction on 15.1.2007 for recovery of Rs. 80/- lakhs approximately, whereas, the property according to petitioners’ Counsel is worth Rs. 20/- crores or so. In view of the urgency, we entertain the writ petition.

Heard Sri Virendra Mishra Advocate for the petitioners, Sri Ajai Kumar Tiwari learned Counsel for the State Bank and perused record.

With regard to a loan, taken by the petitioners, the petitioners and the Bank ar