IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
INTERLOCUTORY APPLICATION NOS. 7-9 OF 2012
IN
SPECIAL LEAVE PETITION (CIVIL) NOS. 30894-96 OF 2011
Pravin Gada and Another … Petitioners
Versus
Central Bank of India and others … Respondents
O R D E R
These are the applications for seeking certain directions in view of
the subsequent developments after the order passed on 5.7.2012.
2. We have heard Mr. C.A. Sundaram, learned senior counsel for the
petitioners and Mr. Mukul Rohtagi and Mr. Jaideep Gupta, learned senior
counsel for the Central Bank of India, respondent No. 1.
3. Before we advert to order dated 5.7.2012, it is necessitous to refer
to order dated 27.3.2012. In the said order, after referring to the order
passed by the High Court in W.P. No. 2689 and other connected matters, the
interim order passed by this Court on 25.11.2011, recording the contentions
of Mr. Sundaram, learned senior counsel for the petitioners and Mr. Jaideep
Gupta, learned senior counsel for the Central Bank of India and taking note
of the chart produced in respect of the dues of the Central Bank of India,
Standard Chartered Bank and Workmen through Official Liquidator, this Court
passed the following order: -
“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 is the warrant and,
therefore, auction should be directed to be held. The learned
senior counsel further submitted that the property is likely to
fetch much more amount than that has been deposited by the
petitioners.
Mr. Sundaram, learned senior counsel would contend that
the sale had been given effect to in the year 2006 on acceptance
of 2.5 crores and with the efflux of time if there has been a
price rise solely on the said base a public auction should not
be directed.
Be it noted that at one point of time, a third party had
deposited 6 crores to purchase the property but later on he
withdrew as the matter was litigated in Court.
Having heard learned counsel for the parties and regard
being had to the 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 advertisements that the
reserve price is 3 crores and the same shall be deposited before
the Recovery Officer of the DRT to enable one to participate in
the bid.
(iii) Any one 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 newspaper.
(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 dealt with in these Special Leave Petitions
shall participate in the bid without the deposit as they have
purchased the property in the year 2006.
(vii) The bid shall not be finalized and the bid sheet
shall be produced before this Court in a sealed cover.
We reiterate at the cost of repetition that the above
arrangements are subject to the result of the final adjudication
in these Special Leave Petitions.
List the matter after five weeks.”
4. After the said order was passed two Interlocutory Applications forming
Nos. 4-6 of 2012 were filed. This Court, looking at the facts and the
contentions raised, passed the following order on the said
applications: -
“These applications were preferred by the Bank stating that
going by the present valuation the property will fetch nearly
Rs.10 crore whereas the order stipulates Reserved 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.
With the above directions, the I.As are disposed of.”
5. In the present applications it has been asseverated that in
compliance with the order dated 5.7.2012, the Recovery Officer of Debt
Recovery Tribunal-I, Mumbai, ordered for publication of the notice 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. Pursuant to the
publication carried 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 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 envelops were
received today, but those are not opened & considered in view of
the directions of the Hon’ble Supreme Court as per aforesaid
orders.
On the date of auction the above 3 closed envelops
containing offers have been received. This being new situation
arisen at the time of auction, in my opinion it would be
appropriate to bring this fact to the kind notice of the Hon’ble
Supreme Court. Hence these 3 closed envelops be also submitted
to the Hon’ble Supreme Court.
As per directions of the Hon’ble Supreme Court, the Bid
Sheet at Exh. 154 be submitted to the Hon’ble Supreme Court 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
Riddisiddhi Bullions Ltd. and Rs.3,30,00,000/- by Krishna Texturisers Pvt.
Ltd. were deposited by way of bank drafts on 29.8.2012 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 the lis but it
is another thing to see at the entrance that the board is fixed and the
people are not allowed to survey the nature and character of the assets.
The photographs of the board that have been put up are filed in Court and
we have perused the same. Be it noted, the putting up of the said
photographs is not disputed.
9. Regard being had to the facts and circumstances, we are of the
considered opinion that there should be a re-auction and we are inclined to
modify the conditions incorporated in the earlier order. Keeping in view
the totality of circumstances we issue the following directions: -
(i) The property in question be put to auction by issuing a public
advertisement within two weeks 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 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 without any kind of pre-
conceived notion by the perspective bidders.
v) The aforesaid reserved price shall be deposited before the Recovery
Officer of the DRT within ten days from the date of the advertisement.
Any one who would not deposit the reserved price within the time
limit, his bid shall not be considered.
vi) 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, e-mail and speed-
post to the Principal District Judge, Mysore by the Registry of this Court.
12. List the matters on 1.11.2012.
……………………………….J.
[K. S. Radhakrishnan]
……………………………….J.
[Dipak Misra]
New Delhi;
September 18, 2012.
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