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TMI Blog2012 (12) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... as been directed by us shall be treated to have attained finality. 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. 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 the bidders who have deposited the money are allowed to withdraw the same. - CIVIL APPEAL NOS. 8658-8660 OF 2012 - - - Dated:- 3-12-2012 - K. S. Radhakrishnan And Dipak Misra, JJ. JUDGMENT Dipak Misra, J. Leave granted. 2. 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. 2689 of 2011, 748 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dation. 5. It is pertinent to state here that in the year 1999, the ICICI Bank had instituted a suit before the High Court in its original side for recovery of its dues against the company. 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 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. 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. 6. In June, 2004, a public notice was issued for sale of the moveable and immoveable properties of the borrower and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction and to consider the offers submitted by the two bidders who had expressed interest in the purchase of the property was made. It is apt to mention here that the official liquidator had filed report on 1st December, 2006 before the DRT stating that an application had been received from the workers contending that the sale which had been confirmed in favour of the first and second respondents, the appellants herein, was at a price which was neither fair nor reasonable. A submission was put forth that no notice was sent to the liquidator through the Registrar despite the mandate of law. 8. 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 confirmation of the sale holding that it was obligatory to ensure that a higher price was fetched for the property and the assets of the company in liquidation, if the sale price offered by an auction purchaser was inadequate. He ultimately set aside the sale and directed for conduct of a fresh auction in the presence of secured creditors, the Receiver and the official liquidator after notice. In pursuance of the said or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally, 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. The said order came to be challenged before the writ court and during the pendency of the writ proceedings, an application was filed by Umrah Developers for refund of the balance sum which was allowed. The writ petition preferred by the first and second respondents was disposed of on 11th August, 2010 in terms of the agreed minutes. As per the agreed order, the matter stood remanded to DRAT for a fresh decision. 11. As is demonstrable, on remand, the DRAT, by its order dated 15th October, 2010, allowed the appeal and directed restoration of the confirmation of sale in favour of the first and second respondents. The said order of the DRAT was assailed by the workers union and the High Court remitted the matter to the DRAT for fresh consideration. The DRAT, considering the facts in entirety, allowed the appeal vide order dated 3rd March, 2011 and restored the confirmation of sale. The said order came to be assailed by the secured creditors and the workmen s union on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovery Officer and shall meet all the expenses of the sale, including towards newspaper advertisements. On the request of the two banks, we further clarify that if the Banks are ready and willing to meet the expenses for the issuance of a publication in any additional newspapers, that shall also be permitted by the Recovery Officer at the expenses which have been agreed to be borne by the Banks. We direct the Recovery Officer to expedite the process of sale and to hold a meeting for fixing the terms and conditions within a period of three weeks from today. The sale process should be completed within a period of three months from the date on which an authenticated copy of this order is placed before the Recovery Officer. 12. 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. 13. At this juncture, it is worthy to note that this Court on 27th March, 2012, after taking note of the High Court s direction, had passed the following order: - This Court while issuing notice on 25th November, 2011, had directed status quo to be maintained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e totality of the circumstances, we issue the following directions: (i) The property in question be put to auction by issuing a public advertisement in at least two newspapers one in English and another in Kannada language having wide circulation in the city of Mysore inviting bids for the sale of the property. (ii) It shall be mentioned in the advertisement that the reserve price is Rs.3 crores and the same shall be deposited before the Recovery Officer of the DRT to enable one to participate in the bid. (iii) Anyone who would not deposit the amount would not be permitted to participate in the auction as speculative bids are to be totally avoided. (iv) The newspaper publication shall be made within a period of two weeks stipulating that the deposit is a condition precedent for participation in the auction which shall be made before the DRT within a week from the date of publication of the advertisement in the newspapers. (v) The auction shall be held within a period of two weeks from the issuance of the advertisement which shall state the specified time and place for the auction. (vi) The petitioners without prejudice to the contentions to be raised and dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried in English and Kannada newspapers no other 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. 6. When the matter was taken up, order dated 30.8.2012 passed in R. P. No. 419 of 2003 was brought to our notice. The said order reads as under: - As per directions of the Hon ble Supreme Court vide its orders dated 27.3.2012 5.7.2012, advertisement was published fixing reserve price at Rs. 3.00 Crores. Only one bid of Shri Pravin Gada Amarnath Singhla has been received on 07.08.2012 as per public notice. His bid was opened at the scheduled date time of the auction. He has given offer of Rs. 3 crores. As his participation in auction was without deposit as directed in above orders, there was no question of his depositing EMD. Relevant columns of Bid Sheet were accordingly filled in and the signature of the bidder has been obtained. As per the directions, the said bid sheet be submitted to the Hon ble Supreme Court. Apart from above, 3 offers in closed envelope were received today, but those are not opened considered in view of the directions of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing bids for the sale of the property. (ii) It shall be mentioned in the advertisement that the reserved price is Rs. 5 crores and the same shall be deposited by way of bank drafts drawn on a nationalized bank before the Recovery Officer of the DRT to enable one to participate in the bid. The advertisement shall stipulate that the deposit of the reserved price fixed by this Court is a condition precedent for participation in the auction. (iii) It shall be clearly stated in the advertisement that the property would be available for inspection in presence of the Registrar of Civil Court or any equivalent officer nominated by the Principal District and Session Judge, Mysore, and it is so done to avoid the grievance from any quarter that the property was not available for proper verification. The inspection by any interested party shall be done within one week from the date of advertisement between 11.00 a.m. to 3.00 p.m. (iv) During the entire period of inspection the concerned officer deputed by the learned Principle District and Sessions Judge, Mysore shall see to it that the board that has been fixed is removed from the site so that there can be inspection of the plot w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome into the sphere of auction. Despite the best of efforts, as we have seen, the maximum price the property has fetched is Rs.5.04 crores. It is submitted by Mr. Sundaram and Mr. Choudhary, learned senior counsel, that a sum of Rs. 2.50 crores was deposited by the present appellants in October 2006 and in the meantime, six years have elapsed. It is urged by them that the said amount was kept with the bank and the bank must have dealt with the money as a prudent financial commercial venture and thereby must have earned interest at least at the rate of 15% per annum. Calculated on that basis, it is contended, the interest component by now would have come to rupees 2 crores 25 lacs and thereby the total sum would come to rupees 4 crores 75 lacs. It is also urged by them that the possession was taken over by them long back and they have already invested substantial amount. As is noticeable, the highest offer in the auction has come up to rupees 5.04 crores at such a distance of time. Regard being had to the totality of the circumstances, we are disposed to think that the sale should be confirmed subject to the appellants depositing a further sum of Rs. 50 lacs before the DRAT within a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he DRAT. The High Court, while dealing with their submission, has recorded as follows:- During the course of the hearing of these proceedings, the Court has been informed that an effort has been made by the First and Second Respondents to settle the outstanding dues of the workers through an out of Court settlement. Counsel appearing on behalf of the workmen submitted that the workmen would abide by the result of the Petitions which have been filed by the secured creditors and it is only in the event that the Petitions filed by the Banks are dismissed that the workers would be inclined to enter into an out of Court settlement with the First and Second Respondents. Counsel for the First and Second Respondents stated that his clients would be able to resolve the dispute with the workmen only if the Petitions filed by the secured creditors challenging the sale in favour of his clients fail. Counsel appearing on behalf of the First and Second Respondents submitted that while the First and Second Respondents are ready and willing to negotiate with the workmen, they are no in a position to do so until the litigation which has been instituted by the secured creditors attains finality ..... X X X X Extracts X X X X X X X X Extracts X X X X
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