By the Court.—These two Special Appeals arise out of a common judgement of the Learned Single Judge.

2. These intra Court appeals are directed against the judgement and order of the learned Single Judge dated 1.10.2013. The auction purchaser has filed Special Appeal No. 1754 of 2013. While the Union Bank of India has filed Special Appeal No. 1752 of 2013. Since both the appeals raise common question of facts and law they have been clubbed together and are being decided by means of this common judgement.

3. Facts relevant for deciding these appeals are as under:

M/s Bahudesshiya Audyogik Utpadan Sahkari Samiti Limited and M/s Janta Udyog Samiti had obtained cash credit facility from the Union Bank of India. Writ petitioner namely Anil Kumar Wadhera’s mother was one of the guarantors for the said loan. The loan account became irregular and was declared a non-performing asset. Approximately a sum of Rs.1.5 crores became due and payable by the borrowers.

4. The Bank in order to recover the outstanding amount filed two claim applications before the Debt Recovery Tribunal, being O.A. No. 102 of 2004 and O.A. No. 103 of 2004 which, after contest, were decreed by the Tribunal by order dated 19/20.8.2005. Recovery of approximate Rs.1.50 crores alongwith interest was decreed against the borrowers.

5. At this stage of the proceedings, Anil Kumar Wadhera intervened and a One Time Settlement, agreement was entered into by the borrowers with the Bank commonly called OTS on 22.8.2006. Under the written OTS it was agreed that the borrower/guarantor shall pay to the bank Rs. 75 lacs out of which Rs.10 lacs were to be paid within a week and balance Rs.65 lacs by 20th September, 2006. The defaulter only deposited Rs.7.50 lacs on 22.8.2006, Rs.2.50 lacs on 23.8.2006.

6. The borrowers failed to honour the OTS so entered into between the parties.

7. The bank accordingly issued a letter dated 11.1.2007 whereby the guarantor was informed that the money in terms of the OTS has not been deposited, it has, therefore, become defunct. The guarantor was called upon to pay the outstanding dues with interest. The benefits earlier granted were withdrawn.

8. The action so taken by the bank was subjected to challenge by means of writ petition No. 8566 of 2007. This writ petition was decided at the admission stage vide order dated 19.2.2007 and it was provided that the bank shall issue a letter of permission to the guarantor to sell one of the mortgage property No. 128/130/10 K Block, Kidwai Nagar, Kanpur. On sale of this property the petitioner was required to deposit a sum of Rs.30 lakhs and the balance amount of Rs.35 lakhs was required to be deposited within three months thereafter. It was also provided that in case of default the guarantor would be liable to pay the cost of Rs.1.3 lakhs. This order was further modified vide order dated 2.3.2007 whereby it was provided that on deposit of Rs.30 lakhs, the title deeds of the property would be returned to the guarantor so that he may execute the sale-deed.

9. The records reflect that the bank issued a letter dated 18.6.2007 calling upon the guarantor to do the needful in terms of the order of the Court.

10. The records further reflect that the guarantor deposited a sum of Rs.30 lakhs on or before 18.6.2007. He was granted permission to sell the remaining two mortgaged properties with a reminder to deposit the balance amount of Rs.35 lakhs within three months. At this stage the guarantor revised his stand and insisted that the bank itself may sell the property. Since the bank did not accept the proposal. The guarantor filed writ petition No. 34598 of 2007. This writ petition was disposed of vide order dated 31.7.2007 directing the guarantor to deposit a sum of Rs,10 lakhs within a month and the balance amount in four equal quarterly instalments. In case of default the order would stand vacated automatically.

11. Despite the letter of the bank dated 7.8.2007, the guarantor did not deposit the money.

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