BABUSHA INTERNATIONAL Vs. CANARA BANK

JUDGEMENT

(1.) I have once again heard the extensive arguments of learned Counsel for the parties. I find no reasons to review or depart from the Orders dated 6.2.2006, which for facility of reference, are reproduced below: CM 1489/2006 in W.P.(C) 19842/2005 This application has been argued in great detail. The facts of the case are that One Time Settlement (OTS) had been arrived at aggregating a sum of Rs. 85,00,000/ - (Rupees eighty five lacs). Time was extended on several occasions, eventually up to 31.8.2005, with interest liability at 'PLR' with effect from 11.5.2005. In this interregnum, it appears that certain complaints have been received by the Respondents. Before the expiry of the extension period, the OTS Agreement was unilaterally terminated by the Respondent. The legal propriety of the termination is to be fully and finally considered in these proceedings. By way of collateral for the loan the Petitioners had mortgaged property bearing No. KP -124, HSIDC, Industrial Area, Kundli Tehsil, District Sonepat, Haryana. When payments were not forthcoming in recovery proceedings before the DRT a Proclamation for the auction of this mortgaged property had been issued indicating that the reserved price below which the property shall not be sold is Rs. 65,60,000/ - (Rupees sixty five lacs and sixty thousand). Mr. H.L. Tiku, learned Senior Advocate appearing for the Petitioner, has drawn my attention to the Memorandum of Understanding dated 27.1.2006 arrived at between the Petitioner and Shri Sanjay Batra and payments of this obligation seeks the Court's imprimatur that too. The Understanding between these two parties is that on receiving Court's approval, a sum of Rs. 10,00,000/ - (Rupees ten lacs) shall be deposited with the Registrar General of this Court within seven days from today, and the remaining payment of Rs. 75,00,000/ - (Rupees seventy five lacs) would be deposited with the Registrar General on or before 28.3.2006. I grant approval to the sale of the said property since it is substantially higher than the reserve price fixed by the DRT. A sum of Rs. 10,00,000/ - shall be deposited with the Registrar General of this Court within seven days from today. The balance payment of Rs. 75,00,000/ - shall be deposited with the Registrar General of this Court on or before 28.3.2006. On making these deposits, the property shall be transferred to Shri Sanjay Batra and Shri Harminder Kohli who are the parties to the Memorandum of Understanding. Thereafter, this Court would consider whether the OTS was legally cancelled. The Court will quantify the amount payable by the Petitioner to the Respondent -Bank. Subject to the payment being made in the aforesaid manner, the impugned RC -154/2003 shall stand stayed. In terms of the above, this application along with CM 12806/2005 stand disposed of.

(2.) LEARNED Counsel for the Respondent seeks to rely on Divya . v. Union of India : AIR2000SC2346 which, however, does not further the case of the Respondent -Bank. The sale in question was under the Companies Act in respect of a Company which was in liquidation. The scope of those proceedings are unique, in that the Company Judge and the Official Liquidator have been invested with the obligation of watching the interest of the several creditors of the Company which have gone into liquidation. It has been my experience as the Company Judge that parties are hesitant to bid in Court auctions/sales since invariably the proceedings are protracted on one ground or the other with the result that the investments remain fallow, if not totally unproductive and jeopardized. A reversal of the approach, even so far as the proceedings under the Companies Act are concerned, is essential, i.e. imparting finality to Court sales. This would have the salutary effect of attracting more purchasers and thereby enabling the Court to collect higher amounts from sale of assets, ultimately for distribution to the creditors.

(3.) SINCE this Court is dealing only with one creditor i.e. Respondent -Bank, the decision in Divya . (supra) cannot be extrapolated onto the present dispute.