- (1.)THE petitioner has come up with the present writ petition for a mandamus directing the first respondent to proceed with the recovery of amounts in pursuance of the Recovery Proceedings No. 117 of 2003 and pass all incidental orders necessary for such recovery.
(2.)THE facts leading to the filing of the writ petition as put forth in the affidavit in support of the writ petition are set out hereunder:-
2. 1. The petitioner (hereinafter referred to as "the bank") is a banking company and carrying out banking business. In that process, the third respondent, Sajjan Textile Mills Limited (hereinafter referred to as"the Mill") had availed term loan facilities from the bank to the tune Rs. 580 lakhs. To secure the same, the Mill hypothecated and created equitable mortgage in favour of the bank in respect of its movable and immovable properties situate at Nilakottai, Dindigul. The Mill committed default in re-payment of the loan availed by it. Therefore, the bank filed two civil suits before the High Court, Bombay, in the year 1999 for recovering the sum of Rs. 8,36,15,087/ -. One suit was laid against the Mill and another against the guarantors. Those suits were transferred to DRT III Mumbai, as by that time DRT at Mumbai was constituted. They were assigned O. A. No. 1631 of 1999 and O. A. No. 1526 of 1999. The tribunal adjudicated the dispute and found that the Mill was liable to pay the claim amount with interest at 16% per annum by its order dated 17. 4. 2003. A Final Recovery Certificate was issued to the Recovery Officer on 10th June 2003 for a sum of Rs. 5,90,32,753/ -. The said certificate was issued for its execution and realisation of dues to the bank by way of sale of movable and immovable assets of the Mill.

2. 2. The bank filed an application before the Recovery Officer DRT III, Mumbai under Section 19 (23) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ("the RDDBFI Act", in short) for transfer of the Recovery Certificate to DRT, Coimbatore, as the properties of the Mill were situated within its jurisdiction, and an order to that effect was passed.

2. 3. The Recovery Officer DRT, Coimbatore on 20. 09. 2003 issued demand notice and warrant of attachment of movables including all machineries and finally the Recovery Officer, Coimbatore passed an order on 30. 09. 2003 ordering attachment of the machineries. . The Mill filed an application before the Recovery Officer DRT, Coimbatore challenging the authority of the Recovery Officer DRT, Mumbai to transfer the Recovery Certificate to Coimbatore. The said application was dismissed on 12. 01. 2004 and the said order became final, since neither the Mill nor the guarantors challenged the same.

2. 4. The bank thereafter requested the Recovery Officer DRT, Coimbatore to proceed with the sale of the machineries of the Mill. The Recovery Officer DRT, Coimbatore thereafter invited sealed tenders for the sale of machineries of the Mill. A sum of Rs. 1,75,00,000/- was fixed as upset price and the date of inspection was fixed on 29. 01. 2004. He also invited the prospective tenders on or before 30. 01. 2004. The tenders were to be opened on 03. 02. 2004 in the presence of the bidders.

2. 5. One Shree Maruthi Textiles submitted its tender and offered to pay a sum of Rs. 2,50,99,999/ -. It was the highest offer and hence the Recovery Officer declared the said textile mill as the highest bidder. The said mill was directed to remit the full purchase money together with the poundage fee within 15 days from the date of sale. The textile mill did not remit the amount within the stipulated time and submitted a letter dated 18. 02. 2004 seeking extension of time. The said application was consented by the bank. However, the Recovery Officer passed an order dated 27. 02. 2004 directing the said textile mill to pay 25% of the bid amount less EMD on or before 05. 03. 2004 and the balance of 75% on or before 10th March 2004 along with the poundage fee of Rs. 2,51,000/ -. The said textile mill did not pay 25% as directed and submitted a letter dated 08. 03. 2004 for extension of time by one more month stating that the labourers were preventing its representatives from entering into the place where the machineries were installed.

2. 6. The Recovery Officer declined to grant time and on 17. 03. 2004, he declared Shree Maruthi Textiles as defaulter and held that the machineries would be resold and the second highest bidder viz. Sri Vairalakshmi and Co. , would be given opportunity to bid the machinery for Rs. 2,50,99,999/ -. The second respondent, in pursuance to the said order, submitted a letter agreeing to deposit the EMD amount of Rs. 17,50,000/- and also willing to pay the purchase price of Rs. 2,50,99,999/ -. It was accepted by the Recovery Officer. The second respondent paid the EMD amount of Rs. 17,50,000/ -. On 25. 03. 2004, Sri Vairalakshmi and Co. , filed a letter before the Recovery Officer, DRT, Coimbatore requesting him for extension of time and accordingly he granted extension of time till 16. 04. 2004 for making payment of the full purchase money.

2. 7. While the matter stood thus, during the first week of April, 2004, the Recovery Officer, DRT Coimbatore went back to his parent department and the office of the DRT became vacant with effect from 01. 04. 2004. Since, the Presiding Officer of DRT, Coimbatore was also transferred, the Presiding Officer DRT II, Chennai was appointed as the Presiding Officer holding concurrent charge of DRT, Coimbatore. In view of the request made by the petitioner-bank to proceed with the recovery proceedings, the first respondent took up the recovery proceedings on 07. 05. 2004. However, he passed the following order in the docket:-" Since no regular R. O is available in this Tribunal the EMD deposited by the second bidder has to be returned. Further, the matter should be returned to DRT III, Mumbai for further NA. "

2. 8. As the first respondent declined to deal with the matter and directed the Registry to return all the papers to DRT, Mumbai, the bank has come up with the present writ petition for the relief set out earlier.

2. 9. For completion of narration of facts, we may also state that in the present writ petition, this Court by order dated 2. 8. 2004 directed Sri Vairalakshmi and Co. , to deposit a sum of Rs. 50 lakhs immediately and the balance amount to be paid in instalments or in one lot, however within 2 months (i. e) on or before 02. 10. 2004. The Mill filed SLP No. 22658 of 2004 challenging the said order and the Apex Court by order dated 29. 10. 2004 directed status quo.

2. 10. In the meantime, on 13. 8. 2004, the Presiding Officer, DRT, Chennai, at the instance of the bank as well as Sri Vairalakshmi and Co. , directed the Recovery Inspector, Coimbatore to go with the bank officials with approved valuer and segregate the machinery into five lots and also segregate the machinery at the first instance for Rs. 50 lakhs and to file a compliance report before 08. 09. 2004. Between 24. 8. 2004 and 26. 10. 2004, Sri Vairalakshmi and Co. , removed lot 'p' machinery. On 1. 9. 2004, Sri Vairalakshmi and Co. , moved another application before the Presiding Officer, DRT, Chennai to remove other lots and deposited Rs. 60. 36 lakhs. However, the Presiding Officer, DRT, Chennai directed Sri Vairalakshmi and Co. , to remove lot 'k'. Thereafter, Sri Vairalakshmi and Co. , removed certain lots. On 5. 10. 2004, the bank filed an application before the Presiding Officer, DRT, Chennai in I. A. No. 407 of 2004 for appropriation of proceeds. By order dated 26. 10. 2004, the Presiding Officer, DRT, Chennai, confirming that the entire sale proceeds were paid by Sri Vairalakshmi and Co. , and had removed the machinery as on 26. 10. 2004, ordered for appropriation of sale proceeds.

2. 11. On 16. 5. 2008, the Apex Court allowed the Civil Appeal filed questioning the order of the Division Bench of this Court and remanded the same to this Court on the ground that the Mill was not given an opportunity of being heard and ordered the status quo to be maintained.

2. 12. In the meanwhile, BIFR, Mumbai recommended the winding up of the company, and by order dated 28. 3. 2008, the High Court of Bombay directed the winding up of the third respondent Mill in C. P. No. 395 of 2003. The third respondent Mill filed an appeal and the order of winding up was confirmed on 8. 8. 2008. SLP No. 22300 of 2008 filed by the Mill was also dismissed by the Apex Court on 22. 9. 2008.

(3.)WE have heard Mr. A. L. Somayaji, learned Senior Counsel appearing for the petitioner, Mr. P. S. Raman, learned Advocate General appearing for the second respondent assisted by Mrs. Pushpa Menon, Mr. Ajit K. Sinha, learned Senior Counsel appearing for the third respondent and Mr. S. R. Sundar, learned Assistant Official Liquidator appearing for Official Liquidator (Bombay ).