2004 (3) TMI 752 - SC - Indian Laws

Whether any formal agreement has been concluded between BICICO and the respondent No. 6 or whether any conveyance has been executed or any other formality completed by BICICO to transfer the title in the hotel in favour of the respondent no. 6?

Issues Involved:
1. Suppression of material fact by the appellant.
2. Adequacy of the sale notice period.
3. Fairness and validity of the sale process conducted by BICICO.
4. Reliefs and remedies for the appellant and respondent No. 6.

Issue-Wise Detailed Analysis:

1. Suppression of Material Fact by the Appellant:
The principal basis for the High Court's dismissal of the appellant's writ petition was the suppression of a material fact, specifically the filing of a suit prior to approaching the Court under Article 226. The Court emphasized that suppression of a material fact disqualifies a litigant from obtaining any relief, as it constitutes an abuse of the Court's process. However, the Supreme Court found that the filing of the suit was not material to the disposal of the writ petition on merits. The existence of an alternative remedy does not impinge upon the jurisdiction of the High Court to deal with the matter itself. The Supreme Court concluded that the suppression of the suit's filing was not a fact that could have affected the final disposal of the writ petition on merits.

2. Adequacy of the Sale Notice Period:
The Supreme Court found that the period given for submitting offers in response to the second sale notice was entirely inadequate. The second notice was issued on 26th March 2002, giving less than three days for purchasers to inspect the premises and submit their offers, with two of these days being public holidays. The Court held that adequate publicity and a fair period of time are essential to ensure maximum participation and secure the best price for the property. The precipitate action by BICICO was deemed unjustified and indicative of potential ulterior motives.

3. Fairness and Validity of the Sale Process Conducted by BICICO:
The Supreme Court scrutinized the sale process and found several irregularities. Three valuations of the hotel property were conducted within a short span, showing a drastic fall in value from Rs. 2.16 crores to Rs. 94.81 lakhs. The respondent No. 6 had submitted its offer and paid the entire consideration on the same day the sale notice was published, even before the last date for submission of tenders. The Court found it unlikely that such actions would occur without prior knowledge of the valuation and acceptance of the offer. The unexplained deviations from the norm led the Court to conclude that the sale was unfair and invalid.

4. Reliefs and Remedies for the Appellant and Respondent No. 6:
The Supreme Court set aside the High Court's decision and granted the appellant the reliefs claimed in the writ petition. The sale of the hotel to respondent No. 6 was annulled. BICICO was directed to return the possession of the hotel to the appellant and refund the amount of Rs. 1 crore received from respondent No. 6. The appellant was required to pay interest on the Rs. 1 crore to respondent No. 6 for the period between the dismissal of the writ petition and the payment date. The simultaneous handing over of the hotel's possession by BICICO to the appellant and the payment of interest by the appellant to respondent No. 6 was mandated.

Conclusion:
The Supreme Court allowed the appeal with costs, emphasizing the need for fairness and transparency in the exercise of statutory powers by public authorities. The Court highlighted the importance of adequate notice periods for sales to ensure maximum participation and the best price for the property. The judgment underscored the principle that suppression of material facts must be significant enough to affect the merits of the case to disqualify a litigant from relief.

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