IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA CWP No. 1287 of 2007 Date of Decision: 01.10.2009 M/s.Vinayal Plastic Industries& another …Petitioners. Versus. M/s.H.P. Financial Corporation …Respondent. Coram: The Hon’ble Mr.Justice Deepak Gupta, Judge. The Hon’ble Mr. Justice Surinder Singh, Judge. Whether approved for Reporting? No For the Petitioner(s): M/s.Rohit Suri & Vijay Verma, Advocates. For the Respondent(s): Mr.Ajay Kumar, Advocate. Deepak Gupta, J. (oral) By means of this writ petition the petitioners have prayed for the grant of following reliefs: “a) Writ in the name of mandamus and with a declaration and/or any other appropriate writ to the respondent to forthwith withdraw and/or cancel/rescind the operation of the auction notice published in the newspaper dated 15.8.2007, for the auction of the property on 27.8.2007, in the ownership of the petitioner being Industrial Plot No.13-14, Indl. Area, Nagrota Bhagwan, Distt. Kangra (HP) measuring 1000 sq. meters, Annexure A, b)writ in the nature of mandamus and any other appropriate writ staying the operation of the orders of the Ld.Recovery Officer, Debts Recovery Tribunal, Chandigarh dated 6.7.2007, and consequentially the auction 2 notice published in the newspaper dated 15.8.2007, for the auction of the property on 27.8.2007 c)writ in the nature of declaration that the impugned auction notice duly published on 15.8.2007, for the auction of the property on 27.8.2007, is arbitrary and issued in violation of 2nd Schedule to the Income Tax Act, 1961 and the Act, 1993, thus is null and void, in effective and in operative. d)writ in the nature of prohibition be issued prohibiting the respondent or any other agency appointed thereof, to put effect to or taking any steps in furtherance and/or acting in terms of the impugned publication dated 15.8.2007, for the auction of the property on 27.8.2007, e)writ of and/or in the nature of certiorari be issued calling up on the respondent to certify and transmit to this Hon’ble Court all records relating to the said auction of the property and the impugned action of the respondent in wrongful putting the property of the petitioners to auction be quashed and conscionable justice may be rendered to the petitioners.” Briefly stated, the facts of the case are that the petitioner No.2 is the proprietor of the Firm Petitioner No.1. In the year 1982 a loan of Rs.2,50,000/- was sanctioned and granted in favour of the petitioners and an additional amount of Rs.65,000/- was sanctioned as additional term loan on 28.7.1987. According to the petitioner, he availed a loan of Rs.3,13,920/-. Undisputedly the loan amount was not paid and finally a suit for recovery of the amount of Rs.10,99,514.82 was filed in this court and registered as Civil Suit No.186 of 1993. In this suit a prayer for grant of future interest was also made. The suit was transferred to the Debt Recovery Tribunal, Jaipur (DRT) and the same was decreed in 3 favour of the respondent-HPFC on 17.5.2000. After the suit had been decreed, the petitioners offered to settle the entire loan on One Time Settlement (OTS) basis. The respondent HPFC on 15.7.2002 approved the settlement of the loan on payment of a total amount of Rs.11 lakhs to be paid in a specified manner. No response was made to this offer by the petitioners. On 1.7.2004 the petitioner again wrote to the HPFC that initially he had offered Rs.four lakhs and now willing to offer Rs.6 lakhs as One Time Settlement. He agreed to deposit 25% of the amount within 15 days and 75% within one year in four equal instalments. The HPFC responded on 20th August, 2004 and stated that first the petitioner should deposit 25% of the amount i.e. Rs.1.50 lakhs and thereafter the decision of the Board will be conveyed to him. The petitioner deposited two drafts of Rs.49,990/- on 21.9.2004 and one draft of Rs.18,620/- on 24.9.2004. He also claimed that an amount of Rs.31,400/- deposited in the month of April, 2002 as token money be counted towards the 25%. On 14.12.2004 the HPFC informed the petitioner that the amount of Rs.31,400/- cannot be taken to be the part of the amount of Rs.1,50,000/-. He was asked to remit the balance amount of Rs.31,400/- so that his plea for considering his case under the OTS could be taken up. The petitioner did not deposit this amount but again reiterated that Rs.31,400/- be taken as 25%. The HPFC did not respond. Finally after more than two long years on 4 11.1.2007 the petitioner deposited Rs.31,400/-. In the meantime, the DRT ordered the sale of the property of the petitioner. The petitioner thereafter deposited another sum of Rs.50,000/- on 29.6.2007. When this petition was filed this court permitted the auction of the property to go on but directed that sale shall not be confirmed in favour of the highest bidder. Shri Rohit Suri urges that the petitioners are bound by their OTS offer and are willing to pay the amount and as such the auction be set-aside. On the other hand, Sh.Ajay Kumar submitted that a maximum accommodation was provided to the petitioner. Initial loan was availed in the year 1982. Repayment of the loan was twice re- scheduled in the years 1984 and 1987. Despite this, the petitioner did not clear his default. Even though a decree for more than Rs.10 lakhs along with future interest had been passed in favour of the HPFC, the Board of Directors of the Corporation in its meeting held on 30.7.2004 approved the OTS offer of Rs.6 lakhs subject to the condition that 25% amount should be paid immediately and balance in four equal installments within one year. Even though the petitioners were advised to deposit Rs.1.50 lakhs they did not deposit the same. We have gone through the entire record of the case and find that more than sufficient opportunity was given to the petitioners to settle the loan amount. The petitioner was specifically told to deposit a sum 5 of Rs.1,50,000/-. The petitioner did not deposit this amount and claimed that an amount of Rs.31,400/- deposited by him prior to even making OTS offer should be considered part of the OTS scheme. This was never accepted by the Corporation. Thereafter, the petitioner slept for almost 3 years before depositing the amount of Rs.31,400/-. Once the Corporation had indicated the petitioner that it was willing to accept his offer subject to his depositing Rs.1,50,000/-, he was bound to deposit the same. In fact the petitioner in his offer had submitted that he would clear the entire amount within one year. Despite this, he had deposited the amount of Rs.31,400/- towards 25% payment only in the year 2007. This clearly shows that the petitioner was not interested in settling the matter. Even during the pendency of the petition, the petitioner did not show its bona fides by ever depositing any amount. In the meantime the property has been auctioned. The dispute between the parties is solely in the realm of contract. The parties are governed by the contract entered into between them and the petitioner was bound to pay the loan amount in terms of the loan documents. They were given an opportunity to pay lesser amount by the Corporation. In case they wanted to take the benefit of the said opportunity they should have deposited the amount as per their offer. They did not do so. At this stage they cannot be 6 permitted to set the clock back and the Corporation cannot be bound by its earlier offer. The writ petition is therefore rejected. We may however make it clear that if the petitioners have any objection with regard to the mode of auction etc. they can raise appropriate plea before the Debt Recovery Tribunal. No order as to costs. ( Deepak Gupta ) Judge. October 1, 2009. ( Surinder Singh ), PV. Judge.