9911796707
TMI Blog2012 (12) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... Electric Wire Corporation Ltd. had a factory at Mysore situate on land admeasuring approximately 4.4 acres comprised in plots 44 and 47 in Serial Nos. 55 and 69 in the Industrial Area of village Habal and Serial No. 33 of Metagally, Hobla Kasba. The said company, which closed down in February, 1995, had about 149 workers. 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 continue payment during the subsistence of the relationship of employer and employee between the parties. 4. 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. A proceeding was initiated before the Company Judge of the High Court of Bombay in 1996 forming the subject-matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meeting convened by the Receiver was adjourned to 9th August, 2006 and eventually, on 21st August, 2006, bidding took place inter se the two bidders who submitted their offers when the first and second respondents enhanced their bid to Rs.2.50 crores. 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. In the said meeting, the representative of the Central Bank of India was not present. On 29th September, 2006, a letter was addressed by the Receiver to the advocates of the two banks enclosing the report seeking the confirmation of sale. He also required the banks to send expression of interest in the property from two parties. 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. 7. As is evincible from the Judgment of the High Court, certain meetings took place and the bank had difficulty in contacting the advocate. On 27th October, 2006, when both the bidders arrived at the office o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. The said Umrah Developers deposited the full consideration of Rs.6.45 crores on 10th November 2006 and 11th December, 2006. Taking note of the same, the Recovery Officer declared them as the successful bidder. 9. Being grieved by the aforesaid order, the first and second respondents therein preferred an appeal before the DRT which set aside the sale. Taking note 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 conducted only amongst a few persons and not in the public realm and that was good enough indicative of the fact that the property could fetch a higher value. The DRT further opined that it would have been proper to issue a public notice and invite fresh offers. 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 notice to determine as to whether offers higher than the bid of Rs.6.45 crores of Umrah Developers could be realized and if no further offers were received, the Recovery Officer was directed to accept the highest bid after inter se bidd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It adverted to the facts in a chronological manner and came to hold that the manner in which the sale proceedings had been conducted was neither fair nor transparent as a consequence of which the possible price that could be realized had become an unfortunate casuality. It took note of the offer made by Umrah Developers after a month of confirmation of sale and opined that the proper price had not been realized. The finding of the DRT that the Central Bank of India had remained absent could not be a justification to sustain the manner in which the sale had been conducted as it was manifestly contrary to the basic concept of fairness and transparency. The Court referred to number of authorities to highlight the conception that in every case, the duty of the court 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. Expressing the aforesaid view, the High Court allowed the writ petition, set aside the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which need not be referred to in prasenti having regard to the nature of directions which we are going to pass today. It is worth noting that Mr. Jaideep Gupta, learned senior counsel appearing for the Central Bank of India has filed a chart of the amount due from the original buyer, namely, Jay Electric Wire Corporation. We think it apposite to reproduce the chart in toto: "1. Central Bank of India (Respondent No. 1): As per the Recovery Certificate dated 6.11.2003 issued by the DRT an amount of Rs.10.99 cores is due and payable which as on 31.3.2012 @ 12% per annum at quarterly rests amounts to Rs.42.41 crores. 2. Standard Chartered Bank (respondent No. 2) : As on 26.8.2003 an amount of Rs.1.12 crores is outstanding along with interest @ 12% per annum. 3. Workmen through Official Liquidator (respondent No. 4) : As per the recovery certificate issued by the Deputy Labour Commissioner on 18.12.2006 an amount of Rs.4.44 crores is due and payable as computed until 1999." It is submitted by Mr. Gupta that in fitness of things and regard being had to the concept of obtaining of the Highest Price in Court sale, having of auction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... List the matter after five weeks." 14. After the said order came to be passed, I.A. Nos. 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. Hence, the Bank has sought modification of the upset price fixed by the Court. Learned counsel 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 conduct the auction within two weeks. To this extent the respondent seeks modification of that direction also. Learned counsel on the either side submitted that the auction should go on without any delay. Considering the facts and circumstances of the case we are inclined to dispose of these applications directing the Recovery Officer to go on with the auction within the time limit stipulated in the bid. The question as to whether the upset price has been correctly fixed or not will depend upon the bid amount offered by the bidders in the auction." 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court. As per directions of the Hon'ble Supreme Court, the Bid Sheet at Exh. 154 be submitted to the Hon'ble Supreme in a sealed cover." 7. The bid sheets were opened before us and we find that an offer amounting to Rs. 3,30,00,000/- by Kumar Enterprises, Rs. 3,30,00,000/- by Riddishiddhi Bullions Ltd. and Rs. 3,30,00,000/- by Krishna Texturisers Pvt. Ltd. were deposited by way of bank drafts on 29.08.2012 and 30.8.2012 respectively. 8. It is submitted by Mr. Sundaram, learned senior counsel for the petitioners, that as the said offers were not in accord, the same should not be considered and the petitioners should be treated as the highest bidder in the auction. Mr. Rohtagi and Mr. Gupta, learned senior counsel for the Central Bank of India, per contra, submitted that the price of the property as on today is worth more than Rs. 10 crores and the reason for the offerees not coming is that the petitioners are in possession and they have put up a board indicating their name and status. It is urged by them that it is one thing to say that the auction is conducted by virtue of the order passed by this Court and the whole thing is subject to the pendency of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The auction shall be held within a period of two weeks from the date of issuance of the advertisement which shall state the specified time and place for the auction. (vii) The petitioners without prejudice to the contentions to be raised and dealt with in these Special Leave Petitions shall participate in the auction without the deposit as they have purchased the property in the year 2006. (viii) The offerees who have already given the bids shall deposit the balance amount to meet the reserved price before the Recovery Officer of the DRT failing which they shall be ineligible to participate in the bid. (ix) After the submission of the bids there shall be a public auction amongst the eligible offerees to get the maximum price. (x) The auction shall not be finalized and the bid sheet shall be produced before this Court in a sealed cover for issuance of further directions, if required. 10. We repeat at the cost of repetition that the above arrangements are subject to the result of the final adjudication to the Special Leave Petitions. 11. A copy of the order passed today be sent by fax, email and speed- post to the Principal District J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficial liquidator, a three-Judge Bench referred to the pronouncements in A. P. State Financial Corporatin v. Official Liquidator[(2000) 7 SCC 291] and International Coach Builders v. State of Karnataka[(2003) 10 SCC 482] and, in the ultimate eventuate, summed its conclusions. The relevant conclusions are reproduced below: - "(i) A Debts Recovery Tribunal acting under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 would be entitled to order the sale and to sell the properties of the debtor, even if a company-in-liquidation, through its Recovery Officer but only after notice to the Official Liquidator or the Liquidator appointed by the Company Court and after hearing him . xxx xxx xxx (iv) In a case where proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 or the SFC Act are not set in motion, the creditor concerned is to approach the Company Court for appropriate directions regarding the realisation of its securities consistent with the relevant provisions of the Companies Act regarding distribution of the assets of the company-in-liquidation." 18. On a perusal of the record, it transpires that the official li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parent procedure but that does not mean that the conclusion arrived at by the High Court in that regard is erroneous. Thus, while confirming the sale subject to the conditions imposed hereinbefore, we are disposed to think that keeping in view the interest of the workmen and their rights, the High Court should deal with the rights of the workmen regard being had to the submissions advanced by the first and second respondents before it in an apposite manner and, if required, monitor the same. As concession was given before a particular Division Bench, we would request the learned Chief Justice to place the matter before the same Bench and if it is not possible, at least before the learned presiding Judge. We have felt so as such a submission was put forth before the Division Bench which had categorically recorded the same and it is not desirable that there should be any kind of deviation with regard to the statement made. 21. Presently to the Interlocutory Applications which have been filed for impleadment and withdrawal of the amounts that have been deposited as earnest money. Regard being had to the facts and circumstances of the case, all impleadment applications are allowed and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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