Judgment :- M. SATHYANARAYANAN, J 1. The writ petitioners are debtors and aggrieved by the order dated 29.10.2008, passed by the Debt Recovery Appellate Tribunal, Chennai, confirming the order passed by the Debt Recovery Tribunal-III, Chennai, under which, the request made by the petitioners for enforcement of one time settlement came to be rejected, had filed this writ petition. 2. The facts in brief necessary for the disposal of this writ petition are as follows:- The third petitioner herein was sanctioned with a overdraft facility by the first Respondent viz., Indian Bank, Arakkonam Branch, Vellore District on 15.7.1988 and he had executed a demand promissory note for Rs.5 lakhs agreeing to repay the same with interest . As a security for the repayment of the loan, he created an equitable mortgage on 18.07.1988 and confirmed the same vide Memorandum dated 19.7.1988. At request made by the third petitioner, overdraft facility which was at Rs.5 lakhs, was enhanced to Rs.12.5 lakhs and the third petitioner had also sought for overdraft facility in respect of the partnership firm by name M/s.N.Venugopal and Company and it was also granted. The second petitioner and others, stood as guarantors for the due repayment and they also created equitable mortgage on 10.9.1988 and confirmed the same on 12.9.1988 and thereafter at the request made by the third Respondent, both the accounts were merged. 3. Sometime thereafter, the partnership firm viz., M/s.N.Venugopal and Company was reconstituted under the name and style of M/s. ENVEE CONSTRUCTIONS, (first petitioner) and the overdraft facility was increased to a sum of Rs.35 lakhs at the request of the first petitioner and OCC facility was also granted to the tune of Rs.4.00 lakhs. 4. On account of unsatisfactory performance of the first petitioner, the first Respondent declared their account as Non Performing Asset on 31.3.1993 and on that date, the first petitioner was due and payable a sum of Rs.78.00 lakhs. The first Respondent Bank also initiated recovery proceedings by filing an application in O.A.No.1057 of 1999, before the Debt Recovery Tribunal, at Chennai for recovery of a sum of Rs.3,20,81,441.14. Later on the above said Original Application was transferred to the file of Debt Recovery Tribunal No.III, Chennai and was renumbered as O.A.No.379 of 2007. The first Respondent Bank also initiated recovery proceedings by filing an application in O.A.No.1057 of 1999, before the Debt Recovery Tribunal, at Chennai for recovery of a sum of Rs.3,20,81,441.14. Later on the above said Original Application was transferred to the file of Debt Recovery Tribunal No.III, Chennai and was renumbered as O.A.No.379 of 2007. The petitioners who were arrayed as Respondents in the said Original Application, filed their Written Statement and subsequently, the application was ordered and the Recovery Certificate was also issued in favour of the first Respondent Bank for recovery of the above said amount together with interest at the rate of 15% per annum from the date of Original Application till final payment. The amount paid by the first petitioner aggregating to a sum of Rs.38 lakhs during the pendency of the above said Original Application, was also directed to be adjusted. 5. The Reserve Bank of India vide its communication dated 29.1.2003, had framed guidelines for recovery of dues relating to NPAs to Public Sector Banks and it was made clear that the revised guidelines will cover NPAs relating to all sectors including small sector except in cases of willful default, fraud and malfeasance. Sub-clause (A)(ii) (a) of the above said guidelines according to the writ petitioners are applicable to them and the same is extracted below:- “The minimum amount that should be recovered under the revised guidelines in respect of compromise settlement of NPAs classified as doubtful or loss as on 31st March, 1997 would be 100% of the outstanding balance in the account as on the date of transfer to the protested bills account or the amount outstanding as on the date on which the account or the amount was categorized as doubtful NPAs, whichever happened earlier, as the case may be.” 6. The first petitioner made a representation dated 23.10.2000 to the first Respondent stating that they are willing to settle the account as per the guidelines issued by the Reserve Bank of India. The said representation after process, was accepted by the first Respondent and it was also communicated to the petitioners herein vide letter dated 27.8.2002. The first petitioner made a representation dated 23.10.2000 to the first Respondent stating that they are willing to settle the account as per the guidelines issued by the Reserve Bank of India. The said representation after process, was accepted by the first Respondent and it was also communicated to the petitioners herein vide letter dated 27.8.2002. The terms of the acceptance are extracted below:- “We are pleased to inform you that our Head Office has accepted your offer of Rs.100 lakhs (Rupees one hundred lakhs) against the total dues of 516.19 lakhs as on 31.3.2002 towards full and final settlement for the following “ TERMS AND CONDITIONS”: 1. Your acceptance should be given within 7 days from 27.08.02. 2. You have to make payment Rs.10 lakhs within30 days and 3. Interest will be charged @ PLR (Now 12%) simple from 01.04.02 on compromise amount on running balance. 4. Any claim whatsoever against the bank if any should be withdrawn. 5. In case of failure for acceptance within 7 days from do-day i.e. 27.08.02, the compromise sanction will stand cancelled suit will be followed immediately for recovery of entire dues. 6. The securities mortgaged with us will be released stage by stage after obtaining permission from our Circle Head.” 7. The first Respondent vide letter dated 11.10.2002 has informed the second and third petitioners that the entire process of compromise is to be completed on or before the end of November 2002 and requested them to expedite the process. The first Respondent by means of its communication dated 7.11.2002 addressed to the petitioners, had informed them that the sanction is valid only for three months and it expires on 27.11.2002 and if it is not complied with before that date, the compromise sanction will stand automatically cancelled and consequently, the petitioners herein would become liable to pay the entire dues to the bank. 8. Since the petitioners were unable to comply with the terms of compromise, the first Respondent Bank sent a letter dated 30.11.2002 to the petitioners informing them that the compromise stands lapsed on 28.11.2002 and the bank will pursue the proceedings pending before the Debt Recovery Tribulnal. 9. As stated above, the proceedings before the Debt Recovery Tribunal had reached the finality by issuance of a recovery certificate for a sum of Rs.3.20 Crores. 10. 9. As stated above, the proceedings before the Debt Recovery Tribunal had reached the finality by issuance of a recovery certificate for a sum of Rs.3.20 Crores. 10. The first Respondent bank after obtaining recovery certificate, had initiated proceedings under SARFAESI Act by issuing a notice under Section 13(2) on 10.12.2002 calling upon the petitioners herein to pay a sum of Rs.543.86 lakhs together withy interest within 60 days from the date of receipt of the notice failing which, further action will be taken. Sometime thereafter, the revised guidelines for compromise settlement of chronic Non Performance Assets of Public Sector Banks were issued by the Reserve Bank of India on 29.1.2003 and in the said guidelines also, it was made clear that the revised guidelines will not be made applicable in respect of cases of willful default, fraud and malfeasance. 11. The first petitioner in his letter dated 28.2.2003 addressed to the Chairman and Managing Director of the Indian Bank, had stated that they were forced to accept the compromise proposal for a sum of Rs.100 lakhs and by selling the properties they can able to mobilize funds and hence requested the bank to revise the proposal and accord sanction as per RBI norms. The first Respondent Bank in its reply dated 11.3.2003, had informed the third petitioner that the total liability as on 31.3.2003 is to the tune of Rs.516.19 lakhs and after adjusting a sum of Rs.28 lakhs out of 100 lakhs, balance amount payable is Rs.72 lakhs and called upon the third petitioner to pay the same at the earliest. Thereafter, series of correspondences between the first petitioner and the first Respondent and by the letter dated 9.9.2003, the first petitioner requested the first Respondent to accept their proposal. The matter was placed before the higher authorities of the first Respondent and since it was not accepted, the first Respondent vide its communication dated 9.9.2005, has informed the first petitioner that the higher authorities have declined the offer made by them as it is too low. The first petitioner vide his letter dated 5.10.2005 addressed to the first Respondent, has made an enhanced offer of Rs.30 lakhs as one time settlement and the first Respondent bank vide its reply dated 19.10.2005, has requested the first petitioner to come forward with an improved offer for compromise settlement. The first petitioner vide his letter dated 5.10.2005 addressed to the first Respondent, has made an enhanced offer of Rs.30 lakhs as one time settlement and the first Respondent bank vide its reply dated 19.10.2005, has requested the first petitioner to come forward with an improved offer for compromise settlement. Since the first petitioner has not improved their offer, the first Respondent vide communication dated 15.12.2005, has informed them that since improved offer has not been made, they will pursue the recovery action which has already been initiated and the same was followed by possession notice dated 21.12.2006 issued under SARFAESI Act. Thereafter also, the first petitioner made number of attempts and at last, made an offer of Rs.75 lakhs by way of full and final settlement and it was not accepted by the first Respondent and the said decision was also informed to the first petitioner vide their letter dated 21.12.2007. 12. On 24.1.2008, the first Respondent issued a notice of intended sale of the properties mortgaged to them under Rule 6(2) and 8(6) of the Security Interest (Enforcement Rules) 2002 under the SARFAESI Rules 2002. 13. The first petitioner even prior to the said notice, has challenged the proceedings dated 21.12.2006 of the first Respondent initiated under Rule 8 of the Security Interest (Enforcement) Rules 2002 by filing writ petition in W.P.No.50313 of 2006 and also filing another writ petition in W.P.No.50314 of 2006 for a mandamus directing the first Respondent to comply with the guidelines issued by the RBI dated 18.7.2003. A Single Bench of this Court vide a common order dated 7.2.2008, had disposed of both the writ petitions granting liberty to the petitioners herein to file an appeal under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal. 14. The third petitioner herein filed an Appeal S.A.No.38 of 2008 before the Debt Recovery Tribunal No.III, Chennai, challenging the vires of the possession notice dated 21.12.2006 and the sale notice dated 24.1.2008 and it was contended among other things, that one time settlement as per RBI guidelines, has not been followed and that the procedure contemplated under Rule 8(1)(ii) and (6) of Security Interest (Enforcement) Rules has also not been complied with. The Tribunal vide its final order dated 5.11.2009, held that the one time settlement under RBI guidelines were sanctioned to the petitioners herein but they have not chosen to honour the same and hence the first Respondent Bank has cancelled it. In so far as the second contention with regard to the non compliance of the above said Rules, the Tribunal held that the first Respondent Bank has not followed the procedure envisaged under the said Rule and therefore, quashed the possession notice dated 21.12.2006 and the consequential sale notice dated 24.1.2008, granting liberty to the first Respondent Bank to initiate fresh action under Section 13(4) of the SARFAESI Act. The petitioners herein aggrieved by the above said order, preferred an appeal in M.A.No.46 of 2010 before the Debt Recovery Appellate Tribunal at Chennai and the same is pending adjudication. The petitioners also preferred an appeal against the orders passed in O.A.No.379 of 2007 which culminated in the recovery certificate, with an application to condone the delay. 15. Mr.Vijay Narayan, learned senior counsel appearing for Mr.K.K.Muralidharan, learned counsel appearing for the petitioners would submit that as per the judgment reported in (2009) 8 SCC page 257-Sardar Associates v. Punjab & Sind Bank, mandate casts upon the first Respondent Bank to comply with the directions and policy determined by Reserve Bank of India and in respect of the case on hand, the first Respondent Bank has failed to consider the proposal made by the petitioners herein for one time settlement under revised guidelines for compromise settlement of chronic NPAs of Public Sector Banks dated 29.1.2003. It is further the submission of the learned senior counsel appearing for the petitioners that the first petitioner in spite of serious difficulties, has so far paid a sum of Rs.48 lakhs as on 28.3.2003 and also made an enhanced offer of 85 lakhs on 8.1.2008 and in order to show their bonafide, had also deposited a cheque dated 7.9.2007 for a sum of Rs.20 lakhs and the first Respondent overlooking the same, has issued a sale notice dated 24.1.2008 which was subsequently quashed by the Debt Recovery Tribunal. The learned senior counsel appearing for the petitioners would further submit that since the mandate has been cast upon the first Respondent Bank to consider the proposal submitted by the first petitioners for one time settlement in terms of revised guidelines, they are duty bound to consider the same and pass appropriate orders and the reasoning of the Debt Recovery Appellate Tribunal in the order dated 29.10.2008 made in M.A.Nos.251 & 252 of 2008 and the consequent order dated 19.12.2008 passed by the Debt Recovery Tribunal on the face of it are unsustainable and liable to be quashed and consequently direction is to be issued to the first Respondent to consider the request made by the first petitioners. 16. Mr.V.Lakshminarayanan, learned counsel appearing for the first Respondent has invited the attention of this Court to the counter affidavit filed by the first Respondent and would submit that the one time settlement proposal of the first petitioner was considered and they were directed to pay a sum of Rs.100 lakhs and a sum of Rs.28 lakhs already paid was deducted and they were requested to pay the balance amount of Rs.72 lakhs. In spite of repeated extension of time granted to them to pay the balance amount, the first petitioner has not chosen to pay the same and therefore it is a case of willful default on the part of the first petitioner. The learned counsel appearing for the first Respondent would further contend that even as per the revised guidelines of RBI dated 29.1.2003, in case of willful default, fraud and malfeasance, the revised guidelines are not applicable. Since the first petitioner is a willful defaulter, his case need not be considered under revised guidelines. 17. The learned counsel appearing for the first Respondent also submitted that as on the date of impugned order passed by the Debt Recovery Appellate Tribunal, the position of law as on that date was applied and the decision reported in (2009) 8 SCC page 257- Sardar Associates v. Punjab & Sind Bank, came into being subsequently and therefore, it is not open to the first Respondent to make a complaint in this regard. 18. 18. It is further contended by the learned counsel appearing for the first Respondent that the above cited decision is not applicable to the facts and circumstances of the present case as admittedly, the first petitioner was granted benevolence of one time settlement proposal and it was requested to pay a sum of Rs.100 lakhs by way of one time settlement and after deducting a sum of Rs.28 lakhs already paid, the first petitioner was required to pay the balance amount and in spite of indulgence shown, they have not chosen to pay the amount and for the reasons, the learned counsel appearing for the first Respondent prayed for the dismissal of this writ petition. 19. The petitioners herein had filed their reply to the counter stating among other things that so far they have made payment of a sum of Rs.56 lakhs and therefore, the first Respondent Bank ought to have considered their proposal in terms of revised guidelines of RBI dated 29.1.2003. 20. This Court has carefully considered the submissions made by the learned counsel appearing on either side and also perused the typed set of documents and gone through the decisions cited by the learned senior counsel appearing for the petitioner. 21. The point for consideration is Whether the petitioners are entitled to invoke the revised guidelines of RBI dated 29.1.2003? 22. The narration of the above facts would disclose that the offer made by the petitioners to pay a sum of Rs.100 lakhs was accepted by the first Respondent vide communication dated 27.8.2002 and by means of further communication dated 7.11.2002, the petitioners were informed that the sanction is valid only for three months and it expires on 27.11.2002 and they were called upon to pay the balance sum of Rs.72 lakhs plus interest at PLR simple from 1.4.2002 failing which the compromise sanction will automatically stands cancelled and they are liable to pay total dues to the bank. Since it was not complied with, the first Respondent vide its communication dated 30.11.2002, had informed the petitioners 2 to 4 that the compromise stands lapsed on 28.11.2002 and they will pursue with the recovery proceedings pending before the Debt Recovery Tribunal, at Chennai. 23. Since it was not complied with, the first Respondent vide its communication dated 30.11.2002, had informed the petitioners 2 to 4 that the compromise stands lapsed on 28.11.2002 and they will pursue with the recovery proceedings pending before the Debt Recovery Tribunal, at Chennai. 23. It is pertinent to point out at this juncture that the first petitioner in its letter dated 28.2.2003 addressed to the Chairman and Managing Director of Indian Bank, Chennai, has also accepted the proposal for payment of Rs.100 lakhs. However, the first petitioner would state that it was not voluntary and requested the first Respondent Bank to consider the case in terms of revised RBI guidelines dated 29.1.2003. 24. Since the terms of the above said compromise were not fulfilled by the petitioners herein, the bank proceeded with the recovery proceedings initiated before the Debt Recovery Tribunal and obtained recovery certificate for a sum of Rs.3.20 Crores with subsequent interest and also initiated further proceedings in DRC. 9/2009 for recovery of a sum of Rs.7.30 Crores and also obtained certificate to that effect on 1.7.2009. 25. After the passing of the SARFAESI Act, Section 13(2) notice was issued on 10.12.2002 and the first petitioner challenging the recovery proceedings also filed a writ petition and a conditional order was passed on 29.1.2010 and the said order was also not complied with by the first petitioner. 26. The learned counsel appearing for the first Respondent would submit that the first petitioner has also filed W.P.No. 50313 of 2006 for mandamus directing the first Respondent to follow and comply with the guidelines issued for one time settlement and the said fact has been suppressed in the present writ petition. 27. A careful analysis of the facts and circumstances of the case would clearly disclose that the petitioners were never serious in complying with the terms of the one time settlement dated 27.8.2002 and as on 31.3.2010 they are due and payable a sum of Rs.7,37,94,762.40. As per the ratio laid down in (2009) 8 SCC page 257-Sardar Associates v. Punjab & Sind Bank, the first Respondent is bound to comply with the directions and policy determined by the Reserve Bank of India. As per the ratio laid down in (2009) 8 SCC page 257-Sardar Associates v. Punjab & Sind Bank, the first Respondent is bound to comply with the directions and policy determined by the Reserve Bank of India. In so for as the facts of the present case are concerned, the said decision has no application as the petitioner had failed to comply with the terms of the one time settlement dated 27.8.2002 and therefore, they are willful defaulters. In terms of the revised guidelines of RBI dated 29.1.2003, cases of willful default, fraud and malfeasance will not be covered and since the petitioners have failed to comply with the terms of the above said one time settlement, they are to be treated as willful defaulters and therefore, they are not entitled to the benefits conferred under the above said guidelines. A perusal of the impugned order passed by the Debt Recovery Appellate Tribunal, confirming the order passed by the Debt Recovery Tribunal would disclose that all the material aspects have been taken into consideration. As already held above, the revised guidelines of RBI have no application to the case of the petitioners as they failed to comply with the terms of the earlier one time settlement dated 27.8.2002 and in spite of indulgence shown by the first Respondent Bank, they have failed to comply with the same. The petitioners also made a challenge to the order passed by the Debt Recovery Tribunal in O.A.No.379 of 2007 and since the appeal was filed with a delay, it is yet to be numbered. 28. This Court on a careful consideration of the entire materials available on record and for the reasons stated above, finds no infirmity in the impugned order passed by the Debt Recovery Appellate Tribunal, confirming the order passed by the Debt Recovery Tribunal and this writ petition lacks merit. 29. In the result, the writ petition is dismissed confirming the order dated 29.10.2008 passed by the Debt Recovery Appellate Tribunal, Chennai. In the circumstances, there will be no order as to costs.