New Delhi, Sept. 11 -- The Supreme Court on Wednesday pulled up the Punjab National Bank (PNB) for simultaneously pursuing a debt settlement and an auction of the borrower's property, calling it a "collusion" and urging the bank to take a policy decision "at the earliest" to ensure such episodes are not repeated and appropriate action is taken against erring officials. A bench of justices JB Pardiwala and Sandeep Mehta directed the bank to issue a final sale certificate to the auction purchaser within 48 hours and refund the borrower Rs.27 lakh from the proceeds, while terming the conduct of the bank "gross" and "a sorry state of affairs." The court added that if such contradictions continued, "the day is not far when these auctions will always fail because they have lost their sanctity." The court's reprimand came a day after it had summoned PNB's chairman-cum-managing director (CMD), who remained present during Wednesday's proceedings along with the area general manager. Attorney general R Venkataramani, appearing for PNB, acknowledged before the bench that it was a "mistake" for the bank to have entered into a settlement before the Lok Adalat while an auction had already taken place. "I do not want to defend this at all. I am here to take charge of the matter and assure the court that all that is required will be done," said the AG, adding that the bank would immediately withdraw its writ petition from the Allahabad high court and return to the pre-settlement position. The bench, however, pressed the bank on accountability. "Why did they enter into a settlement concealing the fact that there was an auction? Why did the bank not make the auction purchaser a party to the settlement proceedings before the Lok Adalat? This is collusion. You need to tell us what actions you propose against the bank officials who are responsible for this mess," it said. The court noted that the auction purchaser had paid Rs.42 lakh while the total amount due to the bank was only Rs.27 lakh. "All that you had to do was to give Rs.27 lakh to the borrower and pocket the rest. How much did you receive in the Lok Adalat settlement? Much less. The bank would have received Rs.15 lakh less had the Lok Adalat settlement gone through," the bench observed....