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Issues: (i) Whether the High Court was justified in directing a fresh one-time settlement and restoration of possession after the borrower had failed to comply with earlier settlement terms and with a prior order granting liberty to proceed under the statute; (ii) Whether the Corporation had complied with the requirements of the statutory sale process under section 29 before confirming the auction sale.
Issue (i): Whether the High Court was justified in directing a fresh one-time settlement and restoration of possession after the borrower had failed to comply with earlier settlement terms and with a prior order granting liberty to proceed under the statute.
Analysis: The earlier settlement offers had been extended to the borrower on specific terms, but the borrower failed to honour them. A subsequent writ order required deposit of substantial amounts and expressly permitted the Corporations to take action in accordance with law on default. That order and the later review order had attained finality. By ignoring those binding orders and reopening the settled controversy, the High Court overlooked material facts bearing on the dispute.
Conclusion: The direction for a fresh one-time settlement and restoration of possession was unsustainable and was set aside.
Issue (ii): Whether the Corporation had complied with the requirements of the statutory sale process under section 29 before confirming the auction sale.
Analysis: The record showed recall notice, seizure after the stipulated period, valuation by an independent valuer, publication of sale notice in newspapers, receipt of multiple bids, acceptance of the highest bid, and a further opportunity to the borrower to match the offer. The procedure followed satisfied the statutory requirements, and the fairness standard applicable to the Corporation did not justify interference where the borrower remained a chronic defaulter.
Conclusion: The auction sale and delivery of possession were valid and there was no illegality in the action taken by the Corporation.
Final Conclusion: The appellate challenge succeeded, the High Court's judgment was set aside, and the auction sale in favour of the appellant was restored.
Ratio Decidendi: Where a borrower has repeatedly defaulted, earlier settlement offers have lapsed, and a prior judicial order has finally authorized recovery action, the Corporation may proceed under section 29 by following the prescribed sale procedure and the court should not reopen the concluded dispute on an erroneous appreciation of facts.
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