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TMI Blog2009 (9) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... er square meter. The appellant established a retail outlet on the said land purchased by the IOC. The remaining land of 3,742 square meters was still available with the APSSIDC. The APSSIDC went into liquidation and respondent No. 1, the Official Liquidator, is in control of the properties. As the unsold land was situated contiguous to the land purchased by the IOC, whereon the appellant is running the retail outlet under license, it approached the Official Liquidator, through letter dated 3-10-2002 with a request to sell the remaining land to it at the price of Rs. 3,230 per square meter at which the extent of 1,036.64 square meters was sold to IOC. In reply to the said letter, the Official Liquidator sent letter dated 31-10-2002, wherein he, inter alia, stated that the Government examined the appellant s proposal and stipulated certain conditions for considering the appellant s offer, which are reproduced herein below : 1. Your offer should be subject to the outcome of counter offers. 2. You should agree to keep the validity of the offer till the counter offers are decided. 3. You can participate in the counter offer proposed to be invited on Tender-cum-Auction basis. 4. You shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or purchase of the land through advertisement dated 21-1-2003, fixing 13-2-2003 as the date of opening of tenders and conducting auction, the appellant failed to participate in the tender-cum-auction process and that consequently the only one valid bid received from respondent No. 4 was found to be the highest and better than the unsolicited bid of the appellant; and that as the tenders have since been finalized and approved by the Cabinet Sub-Committee, it was not feasible to consider the appellant s request. Through the Official Liquidator s letter dated 6-6-2003, respondent No. 4 was informed that its offer was accepted for sale of 3,442 square meters for Rs. 1,11,29,931 though the latter s offer was for purchase of 3,742 square meters for Rs. 1,21,00,000, because the extent of 300 square meters of land was the subject-matter of Writ Petition No. 1893 of 2003 in this Court. Feeling aggrieved by the acceptance of respondent No. 4 s offer, the appellant filed Writ Petition No. 12588 of 2003. 5. By order dated 30-6-2003, this Court granted interim stay of all further proceedings in pursuance of acceptance of the offer of respondent No. 4. 6. In the Writ Petition, separate counter-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11-2002 addressed by the appellant, no further opportunity need be given to it. The learned Judge also held that the appellant suppressed the material fact pertaining to its addressing letter dated 5-11-2002 to respondent No. 1. The learned Judge rejected the contention of the appellant that the approval of the competent authority was not obtained as envisaged in section 512 of the Companies Act, 1956 (for short the Act ) by holding that in the meeting of the creditors held on 10-12-2001 and 10-3-2003 resolutions were passed for sale of the assets and that since it was a case of voluntary winding up, the Official Liquidator is empowered to exercise the powers conferred on him under section 457(a) to (d) of the Act with the approval of the Company Court or the Committee of Inspection or, if there is no such Committee, of the creditors in their meeting. The Writ Petition was, accordingly, dismissed by holding that acceptance of the offer of respondent No. 4 did not suffer from any illegality. 10. We have heard Sri C.V. Mohan Reddy, learned Senior Counsel for the appellant : Sri D. Prakash Reddy, learned Senior Counsel for respondent No. 4, and Sri N.V. Jagannath, learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no budgetary allocation for purchase of the balance land. So IOC has recommended my name because I am dealer of IOC to purchase the balance land. Basing on IOC authorization, I have offered my rate of Rs. 3,230 (the rate sold to IOC land) to purchase this balance land even though this land has no front entrance. The main entrance was blocked by IOC land. If the Corporation allot the balance land at the rate of Rs. 3,230 per sq. mtr., I am agreeable to purchase this land. Otherwise, I am not interested in counter offers. My rate, i.e., Rs. 3,230 per sq. mtr., is more advantageous to the corporation when compared to the offers already received in earlier tenders. If you call for open tenders my rate of Rs. 3,230 per sq. mtr., is automatically cancelled. I can also participate in open tender and offer my rate only at the time of tender opening basing on the circumstances. [Emphasis supplied]. Thanking you, Yours faithfully, Sd/- (A. Sambaraj). 13. Though in the letter extracted above, the appellant has indicated that it is not interested in counter offers, in the last para while stating that if respondent No. 1 calls for open tenders, its offer of Rs. 3,230 per square meter is autom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s supplied the tender form to the appellant and received the same without any demur, he ought to have considered the offer made by the appellant and conducted the auction between the appellant and respondent No. 4. 14. While respondent No. 1 was under no obligation to supply tender form to the appellant even before the tender notification was published, having supplied the tender form and received the same along with the EMD, we see no justification in respondent No. 1 to ignore the tender filed by the appellant. Such an action not only constitutes arbitrariness but also reveals absolute lack of transparency. 15. To our mind though the appellant s conduct in approaching respondent No. 1, obtaining an undated tender and filing the same even before a formal tender notification was issued, showed its undue anxiety to steal a march over others in buying the property, obviously at a less or throw away price; by ignoring the appellant s offer and treating the tender of respondent No. 4 as the only responsive tender, respondent No. 1 has caused enormous loss to public exchequer and damage to public interest. This view of ours is further fortified by the fact that at the hearing the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No. 1 failed to conform to the fair, proper and transparent procedure in conducting sale of the public property. 18. In the present context, it would be apposite to refer to a recent judgment of the Apex Court in Meerut Development Authority v. Association of Management Studies: (2009) 6 SCC 171 wherein the Supreme Court reiterated the well-settled doctrine of trust by observing that disposal of the public property by the State or its instrumentalities partakes the character of a trust and the methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process. In this case, respondent No. 1 failed to follow this firmly established principle of law and allowed the property to be sold for a thoroughly inadequate price. Therefore, such an action is liable to be invalidated in public interest. 19. For the reasons above mentioned, we set aside the order of the learned Single Judge, allow the Writ Petition and quash the proceedings impugned in the Writ Petition, Writ Appeal is, accordingly, allowed. 20. Before parting with this case, it is relevant to note that during the hearing, t ..... 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