SAJJAN TEXTILE MILLS LTD Vs. ICICI BANK LTD

JUDGEMENT

(1.) In the light of the order we intend making, only the skeletal facts are necessary. They are as under:

(2.) The appellant, Sajjan Textile Mills Ltd. was sanctioned a loan of Rs.3 Crore by the respondent Bank on 15th July 1992. As the appellant committed default in making re-payment, a civil suit for recovery was filed. The Bombay High Court also passed an order dated 18th December 1997, appointing the Court Receiver, as the Receiver for the movable and immovable properties of the appellant. The appellant, however, made an application before the BIFR on 23rd June 1998 for being registered as a sick industrial unit and it was registered as such on 15th July 1998 and was declared a sick unit by order dated 6th August 1998. Two suits were thereafter filed by the respondent Bank in the Bombay High Court, one against the appellant for recovery of a sum of Rs.8,36,15,087/- and the other against the guarantors. The aforesaid civil suits as also suits filed by the Central Bank of India and the State Bank of Travancore also for recovery of loans advanced were all transferred to the DRT, Bombay Bench, and an inventory of all the machinery available in the appellant's mill was made and a report submitted to the Tribunal.

(3.) The BIFR also passed an order on 5th October 2001 that as the appellant company could not be resusticated, it was just and equitable that it be wound up. In the meanwhile, the respondent Bank (in April 1999) also filed an application for the recovery of the principal amount of Rs.3 Crore. The DRT in its order allowed the application and passed an order for the recovery of the aforesaid amount from the appellant. A notice of demand dated 31st December, 2002 was issued by the Recovery Officer and recovery proceedings were initiated. The Recovery Officer issued a certificate against the appellant and the guarantors making them jointly and severally responsible for a payment of Rs.5,90,32,753/-. As the properties were situated within the jurisdiction of the DRT, Coimbatore, Tamil Nadu, the recovery proceedings were accordingly transferred to Coimbatore on an application made by the Bank. As the appellant and the guarantors did not pay the amounts due, an order for the attachment of the movable property of the appellant was issued, and despite several objections taken by the appellant, a proclamation for sale by way of tender was issued on 19th January 2004. The five tenders received were opened on 3rd February, 2004 and Sri Maruthi Textiles was found to be the highest bidder with a bid of Rs.2,50,99,999/-. The Recovery Officer thereupon directed the successful tenderer to deposit the balance money within 15 days which was further extended by 30 days up till 27th February 2004. The aforesaid amount was, however, not paid on which the Recovery Officer in his order dated 17th March 2004 directed that the offer of the 2nd respondent, Sri Vairalakshmi be accepted on payment of the amount tendered by Sri Maruthi Textiles. This offer was accepted by respondent No.2 and it undertook to deposit the bid money, but vide application dated 25th March 2004, sought an extension of time for doing so, which too was granted. It appears that on 1st March 2004, the Office of the Recovery Officer and DRT Coimbatore fell vacant and the Presiding Officer DRT, Chennai was appointed to hold the dual charge of both places. On 16th April 2004, respondent No.2 once again applied for more time for complying with the conditions of payment and the Presiding Officer, DRT, Chennai, who was holding the post as an additional charge made the following order on 7th May 2004: