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TMI Blog2013 (8) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into a buy back agreement with M/s PNB Capital Services Limited (hereinafter referred to as the subscriber) a company registered under the Indian Companies Act, 1956. The said company subscribed to the equity shares of respondent no.2 in terms of the said buy back agreement. In case of failure or default on the part of the buyer to buy back the equity shares as stipulated in the agreement, the subscriber was entitled to file a suit for specific performance or in the alternate to sell the entire holding of 10,00,000 shares as were held by the subscriber in the open market. 4. In the year 1996, on the request of respondent no.2, the petitioner bank had granted loan to it. There were three loan accounts of respondent No. 2. Respondent no.1 had stood guarantee to the said loan. Respondent No. 2 defaulted in its repayment schedule. 5. The petitioner Bank was accordingly constrained to file OA No.110/1996 against the respondent no.2. 6. In the same year i.e. in 1996 the subscriber filed a suit for specific performance (Suit No.674/1996) before the High Court against Satinder Kapur for not adhering to the buy-back agreement. Subsequently the subscriber merged with the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; It is requested that as part of the OTS sanction terms, and upon complete payment of the OTS amount by the undersigned, the bank shall settle, compound and withdraw all pending matters that may have been filed by it against the company, its Directors and Guarantors, and pending before various courts and tribunals of competent jurisdiction, including but not limited to OA No.110/96 pending before the Hon'ble DRT, New Delhi and also the Criminal Case pending before the Patiala House Courts at New Delhi." 10. On 06.01.2008 Satinder Kapur wrote to the petitioner bank increasing his initial OTS offer of Rs.75 lacs to Rs.125 lacs; he also sought confirmation of the acceptance of the OTS proposal. 11. On 29.01.2008 the Bank wrote back to Satinder Kapur informing him that the OTS of Rs.125 lacs has been accepted; the up front amount of Rs.5 lacs having been deposited, the balance of Rs.120 lacs should be paid within three months. This letter in para 7 notes as under: "Compromise is being considered by bank as commercial decision & shall have no bearing whatsoever on the ongoing criminal case/investigation if any being carried out by police and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur has entered into an OTS for Rs.125.00 lacs in the account of M/s Indian Megnetcs Ltd. and has deposited the entire OTS amount. The Bank has no dues against the party. Chief Manager Shri Satinder Kapur C-39, Anand Niketan New Delhi-110021" 15. It is relevant to point out that not only the no dues certificate but in fact all correspondences exchanged were between the petitioner Bank and Satinder Kapur. 16. On 28.10.2010 the DRAT passed the following order "28.10.2010 Mr.Justice J.M. Malik Present: Mr.Manish Gandhi, Counsel for the appellant Mr. Ashim Vachher, Advocate for Respondent No.1 Mr. U.N. Singh, Advocate for OL. Costs not deposited. One more opportunity granted to deposit the same before the next date of hearing. Complete paper be given to the counsel for the respondent. Counsel for the respondent submits that to his mind the matter stands settled and he wants to seek instructions from PNB or in the alternative the case is fixed for final arguments on 4.11.2010." 17. The presence of the counsel for respondent no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. As pointed out supra neither of these aforenoted orders i.e. order dated 04.11.2010 and 22.11.2010 have been challenged. Both these orders dated 04.11.2010 (DRAT) and 22.11.2010(DRT) have since attained a finality. There is no dispute to this. 23. On a specific query put to the learned senior counsel for the petitioner on this score he fairly concedes that this writ petition has not challenged the aforenoted orders but has only restricted its challenge to the orders dated 02.9.2011 and 22.9.2011 which were passed by the DRAT seeking a review of the orders dated 04.11.2010 and 22.11.2010 . These orders dated 04.11.2010 and 22.11.2010 having thus attained a finality, thus Court can go behind those orders. The challenge in the writ petition is confined only to the orders dated 02.9.2011 and 22.9.2011. 24. On 02.09.2011, the following order was passed:- "02.09.2011 Mr. Justice R.K. Gupta Present: Mr. Aman Shankar, counsel for the applicant Mr. Manish Gandhi, counsel for the non-applicant Mr. Aman Shankar appears for the applicant and on behalf of the non-applicant Mr. Manish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the aforesaid by applying the analogy of Order XLVII Rule 9 CPC no second review is applicable and the review application is dismissed. Copies of this order be furnished to the parties as per law and one copy be sent to the Ld. DRT forthwith." 27. The order dated 02.9.2011 had dismissed the review petition sought for by the bank on the ground that a second review is not maintainable. 28. It is in this background that the arguments of the petitioner have to be appreciated. 29. Learned senior counsel for the petitioner submits that the bank had entered into an OTS only with respondent no.1; Satinder Kapur was acting as director of respondent no.2; there was no occasion for the bank to have suffered such a heavy monetary loss and would have agreed to compromise the matter for Rs.125 lacs which would include not only the three defaulting loan accounts of the company but also other dues under the buy-back agreement; this was never the intention of the Bank and is clearly reflected from the fact that immediately after the order dated 04.11.2010 and 22.11.2010 the application seeking recall of the aforenoted orders were filed by the bank. Miscellaneous Application No.413/2011 soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bank not only would the O.A. No.110/1996, the Criminal Case pending before the Patiala House Courts but all other pending matters would be withdrawn against the company, its directors and guarantors. It was not restricted to the O.A. and the Criminal Case alone it; was to encompass all such pending litigations inter se the parties which were not only against respondent no.2 but also against its directors and guarantors. Intent of the parties to settle all matters including the T.A. was abundantly clear from this communication. 32. Satinder Kapur had given a personal guarantee for the loans advanced to respondent no.2. The company was, however, not in good shape and on a reference made by Board for Industrial & Financial Reconstruction (BIFR) under Section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 the company was wound up in C.P. No.433/1998 on 01.12.2000. Admittedly, the company was in liquidation and the Official Liquidator had taken charge of its assets. Satinder Kapur in his second capacity as the signatory of the buy-back agreement was also facing litigation from the petitioner bank pursuant to the suit for specific performance which had been filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned to 04.11.2010. On 04.11.2010 in the presence of the counsel for the petitioner bank a settlement proposal between the parties was noted and T.A. No.3/2005 was disposed. There was no objection raised by the counsel for the petitioner that such an order could not have been passed. Pursuant to this order the DRT on 22.11.2010 disposed of T.A. No.3/2005; the application seeking review of the orders dated 04.11.2010 and 22.11.2010 was filed several months later i.e. in May, 2011. No satisfactory explanation was furnished in the said application and this is evident from the perusal of the same. These applications were dismissed on 02.9.2012 by the DRAT. It was noted that the OTS was with regard to both the accounts i.e. O.A. No.110/1996 and T.A. No.3/2005. The review application seeking recall of this order dated 02.9.2011 was dismissed on 22.9.2011; this was in terms of the provisions of Order XLVII Rule 9 of the Code; admittedly a second review was not maintainable. 34. It is only the last two aforenoted orders i.e. the order dated 02.9.2011 and order dated 22.9.2011 which are the subject matter of challenge before this Court. This challenge is limited and confined only to the par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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