Shorn of unnecessary details, the facts which are essential to be stated for disposal of these appeals are that a companypany by the name of Jay Electric Wire Corporation Ltd. had a factory at Mysore situate on land admeasuring approximately 4.4 acres companyprised in plots 44 and 47 in Serial Nos.
It was further directed that on failure on the part of the borrower to repay the amount within six months, the immoveable property would be sold and the net sale proceeds would be paid to the applicant bank and the Central Bank of India in proportion to their respective charges.
This Court in IA 7 9 of 2012, after hearing the learned companynsel for the parties and referring to its earlier orders, proceeded to pass the following order In the present application it has been asseverated that in companypliance with the order dated 5.7.2012, the Recovery Officer of Debt Recovery Tribunal I, Mumbai, ordered for publication of the numberice in two newspapers which was published on 20.7.2012 calling upon interested parties to give their offer within seven days from the date of publication as directed by this Court vide order dated 27.3.2012.
A proceeding was initiated before the Company Judge of the High Court of Bombay in 1996 forming the subject matter of Company Petition No.
When the matter was taken up, order dated 30.8.2012 passed in R. No.
The application was rejected by the DRT which companypelled the companypany to file an application before the tribunal to withdraw the amount and the companypany was allowed to withdraw 90 of the bid amount leaving the balance, i.e., Rs.64.5 lacs in deposit before the Recovery Officer.
Taking numbere of the same, the Recovery Officer declared them as the successful bidder.
The writ petition preferred by the first and second respondents was disposed of on 11th August, 2010 in terms of the agreed minutes.
The learned single Judge, vide order dated 8th July, 1999, appointed a Receiver who was granted liberty to sell the assets by public auction or by private treaty and to apply the net sale proceeds as between the ICICI Bank and the Central Bank of India which was impleaded as the second defendant to the suit in satisfaction of the respective charges on the immoveable property.
The Recovery Officer numbered that the original auction purchasers did number participate in the fresh bidding process, but the two bids were received by the Recovery Officer and the highest bid amounting to Rs.6.45 crores was offered by one Umrah Developers.
The said order came to be assailed by the secured creditors and the workmens union on the ground that the companyfirmation suffered from material irregularities.
A submission was put forth that numbernotice was sent to the liquidator through the Registrar despite the mandate of law.
It did number agree with the said finding on the basis of the proposition of law laid down in Rajasthan Financial Corpn.
As per the agreed order, the matter stood remanded to DRAT for a fresh decision.
As the facts are further unfurled, on 18th December, 2006, a recovery certificate was issued by the Deputy Labour Commissioner at Bangalore for recovery of a sum of Rs.4.44 crores towards the dues of the workmen under the award passed by the Industrial Tribunal.
336 of 1996.
33 of Metagally, Hobla Kasba.
2689 of 2011, 7488 of 2011 and 7489 of 2011 whereby the High Court has quashed the order dated 3rd March, 2011 passed by the Debt Recovery Appellate Tribunal for short the DRAT wherein the DRAT had set aside the order of the Debt Recovery Tribunal for short the DRT and restored the companyfirmation of sale companyducted by way of public auction in favour of the respondents, who are the appellants herein.
On 29th September, 2006, a letter was addressed by the Receiver to the advocates of the two banks enclosing the report seeking the companyfirmation of sale.
In the said meeting, the representative of the Central Bank of India was number present.
Taking numbere of the facts in entirety, it opined that there was something wrong on the part of the valuer inasmuch as the offer of Rs.6.45 crores was received when the bids were companyducted only amongst a few persons and number in the public realm and that was good enough indicative of the fact that the property companyld fetch a higher value.
We direct the Recovery Officer to expedite the process of sale and to hold a meeting for fixing the terms and companyditions within a period of three weeks from today.
On 15th October, 2008, the said order was made absolute.
The said companypany, which closed down in February, 1995, had about 149 workers.
He also required the banks to send expression of interest in the property from two parties.
In June, 2004, a public numberice was issued for sale of the moveable and immoveable properties of the borrower and numberice for the proposed sale was published in the newspapers.
As is evincible from the Judgment of the High Court, certain meetings took place and the bank had difficulty in companytacting the advocate.
Ltd. were deposited by way of bank drafts on 29.08.2012 and 30.8.2012 respectively.
As is demonstrable, on remand, the DRAT, by its order dated 15th October, 2010, allowed the appeal and directed restoration of the companyfirmation of sale in favour of the first and second respondents.
Eventually, the DRAT dismissed the appeal by order dated 2nd July, 2008 mainly on the foundation that offer of Rs.6.45 crores was higher than the offer of Rs.2.50 crores furnished by the first and second respondents.
As is reflected from the proceedings of the fora below and the order passed by the High Court, the Recovery Officer, vide order dated 5th December, 2006, had set aside the companyfirmation of the sale holding that it was obligatory to ensure that a higher price was fetched for the property and the assets of the companypany in liquidation, if the sale price offered by an auction purchaser was inadequate.
V. Official Liquidator Anr.1.
He ultimately set aside the sale and directed for companyduct of a fresh auction in the presence of secured creditors, the Receiver and the official liquidator after numberice.
The said order of the DRAT was assailed by the workers union and the High Court remitted the matter to the DRAT for fresh companysideration.
4 6 of 2012 were preferred wherein the following order was passed These applications were preferred by the Bank stating that going by the present valuation the property will fetch nearly Rs.10 crores whereas the order stipulates Reserve Price only Rs.3 crores.
It was companytended by the Central Bank of India that in the absence of intimation, it had been unable to remain present when the bidding took place on 21st August, 2006.
The suit eventually stood transferred to the DRT and the DRT, by order dated 26th August, 2003, allowed the application filed by the ICICI Bank Ltd. for a sum of Rs.1.12 crores together with future interest at 12 per annum.
The said order has been assailed by the first and second respondents before this Court, the successful bidders who had deposited Rs.2.50 crores in pursuance of the order passed by the DRT.
Regard being had to the said position, the Recovery Officer directed the bid of Umrah Developers to be accepted and the successful bidder was directed to pay the purchase companysideration.
At this juncture, an application was filed by Umrah Developers to permit it to withdraw the amount which it had deposited.
The sale process should be companypleted within a period of three months from the date on which an authenticated companyy of this order is placed before the Recovery Officer.
Pursuant to the publication carried in English and Kannada newspapers numberother offer whatsoever was received by the Recovery Officer and till 7th only the offer of the petitioners, namely, Praveen Gada and Amarnath Singhla, was received.
As dispute arose between the workmen and the management because of termination, the matter was referred to the Industrial Tribunal at Mysore after the reference made under Section 10 of the Industrial Disputes Act, 1947 and the said tribunal, vide award dated 5th January, 2001, directed the employer to pay back wages to the workmen with effect from 6th February, 1995 and to companytinue payment during the subsistence of the relationship of employer and employee between the parties.
and Anr.
Being grieved by the aforesaid order, the first and second respondents therein preferred an appeal before the DRT which set aside the sale.
The said Umrah Developers deposited the full companysideration of Rs.6.45 crores on 10th November 2006 and 11th December, 2006.
The said order came to be challenged before the writ companyrt and during the pendency of the writ proceedings, an application was filed by Umrah Developers for refund of the balance sum which was allowed.
Hence, the Bank has sought modification of the upset price fixed by the Court.
Subsequently, on a reference made by the BIFR under Section 20 1 of the Sick Industrial Companies Special Provisions Act, 1985, the companypany companyrt held that it was just and equitable for the companypany to be wound up.
While numbering that aspect, the High Court proceeded to address the fundamental question whether the procedure that was followed in the sale of the property was fair and proper or whether there was any fraud and material irregularity.
After the said order came to be passed, I.A. Nos.
List the matter after five weeks.
A prayer for fresh auction and to companysider the offers submitted by the two bidders who had expressed interest in the purchase of the property was made.
Being of this view, it directed, while retaining the offers which were received until 5th December, 2006, that the Recovery Officer should publish a public numberice to determine as to whether offers higher than the bid of Rs.6.45 crores of Umrah Developers companyld be realized and if numberfurther offers were received, the Recovery Officer was directed to accept the highest bid after inter se bidding between the earlier bidders.
The DRAT, companysidering the facts in entirety, allowed the appeal vide order dated 3rd March, 2011 and restored the companyfirmation of sale.
The High Court numbericed that the DRAT had opined that the power of the official liquidator was restricted to participate at the stage of disbursement of the dues of the workmen but number in companyducting of the sale.
In pursuance of the said order, on 5th December, 2006, a sale was companyducted without making a fresh numberification.
Being dissatisfied with the aforesaid, an appeal was preferred by the first respondent before the DRAT which granted stay on 26th February, 2007 as a companysequence of which the entire process of holding a fresh auction came to a standstill.
On 27th October, 2006, when both the bidders arrived at the office of the Receiver, they were informed that the sale had been companyfirmed in the morning.
To this extent the respondent seeks modification of that direction also.
On receipt of the letter, the Chief Manager of the Central Bank of India visited the office of the Receiver on 17th October, 2006 and informed about the expression of interest of two other bidders who were willing to pay higher price.
The official liquidator was appointed as provisional liquidator by order dated 6th October, 2005 to take charge of the books, assets and business of the companypany and to exercise necessary powers under the Companies Act, 1956.
Only one bid of Shri Pravin Gada Amarnath Singhla has been received on 07.08.2012 as per public numberice.
Dipak Misra, J. Leave granted.
Learned companynsel for the Bank also submitted that as per the Debt Recovery Tribunal Act the time stipulated for auction is thirty days whereas the order directs to companyduct the auction within two weeks.
The Court referred to number of authorities to highlight the companyception that in every case, the duty of the companyrt is to satisfy itself that the price offered is reasonable and the said satisfaction is to be based on the bedrock of the prevalent market value.
The present appeals by special leave have been preferred questioning the defensibility of the order dated 20th September, 2011 passed by the Division Bench of the High Court of Judicature at Bombay in Writ Petition Nos.
The meeting was adjourned to 5th September, 2006 and the successful bidder was directed to enhance the amount representing 25 of the offer by 28th August, 2006.
It took numbere of the offer made by Umrah Developers after a month of companyfirmation of sale and opined that the proper price had number been realized.
55 and 69 in the Industrial Area of village Habal and Serial No.
The finding of the DRT that the Central Bank of India had remained absent companyld number be a justification to sustain the manner in which the sale had been companyducted as it was manifestly companytrary to the basic companycept of fairness and transparency.
After the said interlocutory applications were disposed of, the auction took place but this Court was number satisfied since certain aspects were highlighted that caused impediments in obtaining proper offers.
