2013 (8) TMI 848 - HC - Companies Law

Recall of Order - There was no objection raised by the counsel for the petitioner that such an order could not have been passed - Pursuant to the order the DRT disposed of T.A. No.3/2005; the application seeking review of the orders was filed several months later - No satisfactory explanation was furnished in the said application and this was evident from the perusal of the same - These applications were dismissed by the DRAT - It was noted that the OTS was with regard to both the accounts i.e. O.A. and T.A. - The review application seeking recall of the order was dismissed - this was in terms of the provisions of Order XLVII Rule 9 of the Code - admittedly a second review was not maintainable. It was only the last two aforenoted orders which were the subject matter of challenge before the Court The challenge was limited and confined only to the parameters and guidelines to be followed by the court while dealing with a review application - There was no fault in either of these orders - Unless and until there was an error apparent on the face of the record or there was a discovery of a new fact which after exercise of due diligence was within the knowledge of the petitioner at the time when the impugned order was passed - no ground for review was made out - Within these parameters the orders suffer from no infirmity - That apart the Court had gone on to examine all the averments made by the petitioner on merits and the earlier order passed by the DRT as also the order of the DRAT also with-stand the test of fairness - On no count does the petitioner deserve any relief Decided against petitioner.

Summary

Issues Involved:
1. Quashing of orders dated 02.9.2011 and 22.9.2011 passed by the Debt Recovery Appellate Tribunal (DRAT).
2. Review and recall of original orders dated 04.11.2010 and 22.11.2010 by the DRAT.
3. One Time Settlement (OTS) agreement and its scope.
4. Legal standing and implications of the OTS on pending litigations.
5. Maintainability of second review application.

Detailed Analysis:

1. Quashing of Orders Dated 02.9.2011 and 22.9.2011:
The petitioner bank sought to quash the orders dated 02.9.2011 and 22.9.2011 passed by the DRAT. These orders were in response to review applications filed by the petitioner bank, which were dismissed. The court noted that the orders dated 04.11.2010 and 22.11.2010 had attained finality and were not challenged. Therefore, the court could not go behind these orders, limiting the challenge only to the orders dated 02.9.2011 and 22.9.2011.

2. Review and Recall of Original Orders Dated 04.11.2010 and 22.11.2010:
The bank filed review applications seeking to recall the orders dated 04.11.2010 and 22.11.2010. The court observed that these applications were filed several months later, in May 2011, without satisfactory explanation for the delay. The DRAT had noted that the OTS was with regard to both accounts (O.A. No.110/1996 and T.A. No.3/2005). The review application was dismissed under Order XLVII Rule 9 of the CPC, which does not permit a second review.

3. One Time Settlement (OTS) Agreement and Its Scope:
The OTS agreement was a central issue. The petitioner bank argued that the OTS was only with respondent no.1 and not intended to cover all liabilities, including the buy-back agreement. However, the court found that the correspondences and the language of the OTS indicated an intention to settle all pending matters, including those against the company, its directors, and guarantors. The OTS encompassed both the loan accounts and the buy-back agreement.

4. Legal Standing and Implications of the OTS on Pending Litigations:
The court noted that the OTS was a comprehensive settlement. The No Dues Certificate issued by the bank confirmed that the entire OTS amount was deposited, and the bank had no dues against the party. The court also highlighted that the bank's counsel had acknowledged the settlement before the DRAT, leading to the disposal of T.A. No.3/2005. The subsequent review applications were dismissed as they failed to provide new facts or errors apparent on the face of the record.

5. Maintainability of Second Review Application:
The court emphasized that a second review application is not maintainable under Order XLVII Rule 9 of the CPC. The bank's second review application was rightly dismissed by the DRAT on this ground. The court upheld the DRAT's orders, finding no error in their dismissal of the review applications.

Conclusion:
The court dismissed the petition, finding no merit in the challenges against the orders dated 02.9.2011 and 22.9.2011. The OTS agreement was intended to settle all pending matters, and the subsequent review applications were not maintainable. The orders dated 04.11.2010 and 22.11.2010 were found to be fair and justified.