REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6347 OF 2012
[Arising out of SLP (Civil) No. 32610 of 2011]
M/s Micro Hotel P. Ltd. .. Appellant
Versus
M/s Hotel Torrento Limited & Ors. .. Respondents
WITH
CIVIL APPEAL NO. 6348 OF 2012
[Arising out of SLP (Civil) No. 1125 of 2012]
J U D G M E N T
K. S. RADHAKRISHNAN, J.
1. Leave granted.
2. Common questions arise for consideration in both these appeals and
hence we are disposing of both the appeals by a common judgment.
3. We are, in these appeals, called upon to consider the question
whether the Division Bench of the Orissa High Court was justified in
directing Orissa State Financial Corporation (OSFC) and Industrial
Promotion and Investment Corporation of Odisha Ltd. (IPICOL) to offer
afresh the benefit of One-Time Settlement Scheme (OTS) to M/s Hotel
Torrento Limited, 1st respondent herein, which had earlier been offered
vide communications’ dated 18.3.2006 and 3.4.2006, but was not availed off
by complying with the terms and conditions stipulated therein. The further
question is whether the High Court was right in ordering dispossession of
the appellant (auction purchaser) and put 1st respondent back in
possession.
4. This case has a chequered history, therefore, it is necessary to
examine the facts at some length to appreciate the real controversy between
the parties and to reach a proper and just decision, on facts as well as on
law. OSFC, 2nd respondent herein, disbursed a term loan of Rs.51,27,200/-
and loan in lieu of subsidy of Rs.23.30 lakhs to 1st respondent for
establishing a hotel project at Janugarji, Balasore in the State of Odisha.
The project was jointly financed by OSFC and IPICOL, for which 1st
respondent had entered into a loan agreement and mortgaged the title deeds
and extended a registered lease deed dated 8.2.1988. Lease was valid for a
period of 25 years with a renewable clause. There was default in repayment
of the loan amount, which led OSFC issuing a demand notice to 1st
respondent on 7.2.1991, followed by a recall notice dated 30.11.1991. The
respondent was also served with a show cause notice dated 16.12.1994
followed by recall notices dated 4.1.1995 and 13.3.1996.
5. 1st respondent then filed a Writ Application No. 2513 of 1996 on
20.3.1996 before the High Court of Orissa to quash the recall notice dated
13.3.1996 and for rehabilitation. The High Court disposed of that writ
application with a direction to respondents 2 and 5 (OSFC & IPICOL) to
consider the request of 1st respondent for rehabilitation package. On
9.3.2006, an OTS scheme was introduced by OSFC and 1st respondent applied
for settlement of its loan account under that scheme. On 18.3.2006, the
benefit of the scheme was extended to 1st respondent by OSFC and agreed in
principle to settle the term loan account on payment of Rs.1,16,21,200/- on
or before 18.4.2006, subject to certain terms and conditions which were as
follows:
1. The settlement amount shall either be paid in one lump sum on or
before Dt. 18.04.06 (within 30 days of this settlement order) with
3% discount on the settlement amount.
OR
Installments as per the sequence mentioned below:
a) Up front payment of Rs.23,61,400.00 (Rupees twenty three lakh
sixty one thousand four hundred only) (i.e.25% of settlement
amount less initial deposit) shall be paid along with the
acceptance letter (format enclosed herewith) on or before Dt.
16.04.06, within 30 days.
b) The balance settlement amount of Rs.87,15,900.00 (75%) shall
be paid on or before Dt. 15.06.06.
2. Any other expenses chargeable/incurred/debited in the loan accounts
towards misc. expenses on L/A with effect from Dt. 11.07.05 (date
of application) till the final settlement of loan accounts shall be
paid by you along with the settlement amount.
3. It may be noted that (NDC) can only be issued in your favour after
liquidation of all the loans availed.
4. You shall have to submit the consent/decree/permission/withdrawal
order (wherever applicable) before issue of No Due Certificate
(NDC).
In case of failure on payment of the aforesaid amount within the
stipulated dates, the one time settlement of dues considered in your
favour including relief and concession thereon shall be withdrawn
without further reference to you.”
6. IPICOL also approved the request for OTS at Rs.45 lacs with waiver of
Rs.1,88,21,099 subject to certain terms and conditions, which were as
follows:
“(a) The OTS amount is Rs.45 lacs (Rupees forty-five lacs only) and
the resultant sacrifice(s) by way of waiver is Rs.1,88,21,099
(Rupees one crore twelve lakhs seventeen thousand five hundred
twenty nine only on account of funded interest and Rs.76,03,570/-
(Rupees seventy six lakhs three thousand five hundred seventy
only) on account of overdue interest.
(b) The OTS amount shall be paid within a period of 1 year from the
date of this letter as per the schedule given below:
Rs.6,75,000 towards 25% of upfront payment (including initial
payment made by you) within 30 days and balance 75% amounting to
Rs.33,75,000/- within a period of 1 year in 4 quarterly
installments, carrying simple interest @ 14% p.a. on reducing
balance.
(c) The above OTS is subject to cancellation, if it is found that
you have provided incorrect details and information or
suppression of any material facts for getting the sanction of
OTS. The decision of IPICOL is final in this regard.
(d) In case of non payment, IPICOL shall have the right of
requital.”
7. We notice that despite of waiver of Rs.2,26,85,800 and Rs.1,88,21,099
by OSFC and IPICOL respectively, 1st respondent did not comply with the
terms and conditions of the OTS scheme, consequently, OSFC and IPICOL
informed 1st respondent that they had withdrawn OTS offer.
8. We find, on 31.3.2007, yet another OTS scheme of 2007 was launched by
OSFC and, again, an offer was made to 1st respondent to avail of the
benefit of that scheme. OSFC, on 4.10.2007, requested 1st respondent to
pay the settlement amount of Rs.1,16,21,200 with delayed payment of
interest within 10 days. 1st respondent did not comply with that request
as well, consequently, OSFC, on 28.12.2007, withdrew the offer and advised
1st respondent to pay the entire dues as per the agreement, failing which
1st respondent was informed that recovery proceedings would be initiated
for realization of the dues. Later, OSFC sent a demand notice dated
22.8.2008 stating that the total loan outstanding as on 31.12.2007 was
Rs.4,52,94,691 and 1st respondent was called upon to pay the amount,
failing which it was informed that recovery proceedings would be initiated.
9. 1st respondent then, on 10.09.2008, filed a Writ Petition No. 13376
of 2008 before the Orissa High Court to quash the demand notice dated
22.08.2008 and for a direction to consider its claim under the OTS scheme.
On 31.10.2008, OSFC had, however, issued a notice recalling the entire
amount along with interest and informed 1st respondent that in case of
failure to make payment, further action would be taken under Section 29 of
the State Financial Corporation Act (SFC Act). Writ Petition came up for
hearing before the Orissa High Court on 4.12.2008, and the Court directed
OSFC to maintain status-quo and on 7.4.2010, the Court passed an ad-interim
order directing 1st respondent to inform as to whether they were willing to
deposit the amount or Rs.1 Crore for consideration of their claim under
OTS. On 26.11.2008, IPICOL also made a request to OSFC to initiate
proceedings under Section 29 of SFC Act and to take over the assets of the
unit.
10. Writ Petition No. 13376 of 2008 came up for final hearing on
21.4.2010, and the Court enquired whether 1st respondent was willing to pay
Rs.1 Crore, as suggested by the Court on 4.12.2008. The Court was informed
that a petition had been filed on 21.4.2010 along with a bank draft of
Rs.17,50,000 drawn in favour of the Registrar, Orissa High Court. 1st
respondent had also made a request to the Court for time up to 26.2.1010 so
as to pay the amount of Rs.1 Crore. The Court ordered the return of the
draft to the 1st respondent since the amount was due to both OSFC and
IPICOL. The Court was informed by OSFC that 1st respondent had not availed
of the earlier proposal for OTS and no new OTS scheme was available, still
the Court passed the following order:
“The learned counsel for the Corporations submits that the
earlier proposal for one-time settlement had been considered by both
the Corporations and the matter had been settled. But the petitioner
did not pay the amount for which it had to be cancelled and, at
present there is no scheme for one-time settlement.
Be that as it may, the Petitioner having defaulted in payment of
huge amount we dispose of the writ petition directing that the
petitioner may deposit a sum of Rs.50,00,000/- (Rupees fifty lakhs)
each before each of the two Corporations by 20.6.2010 and applications
shall be filed before both the Corporation for settlement of the dues.
If any such application is filed the same shall be considered on its
own merit by both the Corporations either separately or jointly
provided there is any scheme available for such settlement by the
Corporations.
In the event, the Petitioner fails to deposit the aforesaid
amount by 20.6.2010, both the Corporations shall be at liberty to take
such action as permissible under law under the State Financial
Corporation Act.”
(emphasis added)
11. 1st respondent did not comply with even the above mentioned order.
OSFC then issued a registered notice dated 8.7.2010 to 1st respondent
pointing that since it had failed to comply with the above mentioned order
of the Court, OSFC would be at liability to initiate proceeding under the
SFC Act. The 1st respondent was, therefore, asked to liquidate the entire
outstanding amount as on 30.6.2010, failing which 1st respondent was
informed that OSFC would be initiating action under Section 29 of SFC Act.
Later, OSFC issued a seizure order dated 2.8.2010 of the property and that
order was executed on 15.9.2010 and the possession of the unit was taken
over “as is where is” basis.
12. OSFC, during seizure, got prepared a valuation report dated
17.09.2010 from its panel valuer. Based upon that valuation report, off-
set price of the unit was fixed at Rs.1,75,45,000. Later, the sale notice
was published in the Daily newspapers, Samaj and the New Indian Express on
18.9.2010. On 21.9.2010, again, OSFC issued a notice to 1st respondent to
clear the outstanding dues with up to date interest of Rs.6,18,62,238/-
collected up to 30.6.2010 before Default-cum-Disposal Advisory Committee
(DDAC) on 29.9.2010 so also to get the assets released. 1st respondent was
informed of the sale notice published in the daily newspapers requesting to
clear up the dues before the DDAC meeting scheduled to be held on
29.9.2010. 1st respondent was also informed that in the event of non-
payment of dues, it could still match or better the highest bid price. 1st
respondent, however, did not take any steps to clear the outstanding dues,
but preferred a Review Petition No. 99 of 2010 for reviewing the order
passed by the Orissa High Court on 21.4.2010 in Writ Petition No. 13376 of
2008. The Court rejected the review petition on 22.9.2010. The Court,
after noticing that 1st respondent had not deposited any amount in
pursuance to its order dated 21.4.2010, held as follows:
“Apart from the above, from the conduct of the petitioner, we find
that the petitioner did not pay any amount when the account was
settled under the scheme earlier and waited for another demand
notice. Even in the writ petition though the petitioner was
directed to deposit Rs.50,00,000/- (Rupees fifty lakhs) each with
the two Corporations, the same was not complied with. In course of
hearing of this review petition, the petitioner has offered only
Rs.40,00,000/- (Rupees forty lakhs) to be deposited with the two
Corporations against the outstanding dues of more than seven crore.
We are, therefore, of the view that the petitioner has no
intention to clear the dues of the two Corporations which had
financed for establishing a hotel. In the meantime possession of
the said hotel has been taken by OSFC under section 29 of the State
Financial Corporation Act and the same has been advertised for
sale. The sale notice, a copy whereof was produced before us shows
that the loanee can appear before the DDAC on the date fixed i.e.
29th of September, 2010 for the purpose of getting release the
seized asset.”
(emphasis added)
13. 1st respondent then submitted a proposal to DDAC, which was
considered by DDAC on 29.9.2010 and the order was communicated to the 1st
respondent.
14. DDAC, in pursuance to the auction notification in the newspapers,
received altogether 9 bids and, after negotiations with the auctioneers,
the offer of the appellant was found to be the highest at Rs.774 lacs,
which was accordingly accepted OSFC delivered the possession of the
land, building and machinery/furniture and fixtures to the appellant vide
possession letter dated 11.10.2010.
15. 1st respondent, as already stated, then approached the Orissa High
Court and filed the present writ petition No. 17711 of 2010 to quash the
cancellation of the OTS dated 28.12.2007, sale letter dated 1.10.2010 and
also for other consequential reliefs, which were granted by the Division
Bench of the Orissa High Court, the operative portion of which reads as
follows:
“For the reasons stated supra the writ petition is allowed. Rule
issued. The letters dated 28.12.2007 and 1.10.2010 (Annexure-5 &
Annexure-8 series) cancelling the proposal for OTS and rejecting
the representation dated 29.9.2010, the public sale notice dated
19.9.2010 (Annexure-6), the sale letter dated 1.10.2010 (Annexure-
8 series), the sale agreement dated 11.10.2010 (Annexure-A/5) and
the alleged delivery of possession are hereby quashed. The Orissa
State Financial Corporation and IPICOL are directed to place fresh
demand with the petitioner, within four weeks from the date of
receipt of this order, with regard to the amount of OTS offered in
the communications dated 18.3.2006 and 3.4.2006 of the OSFC and
IPICOL along with interest at the rate of 9% on the said amount
from that date till the date of payment or at the rate of
interest, stipulated under the OTS Scheme, 2007 in case of
similarly placed persons. The petitioner is directed to make
payment within six weeks thereof. Thereafter the possession of
the property shall be delivered to the petitioner within a
reasonable time. If the petitioner fails to deposit the amount,
as directed, the OSFC and IPICOL are at liberty to proceed in the
matter in accordance with law.”
16. Shri C.A. Sundram, learned senior counsel appearing for the appellant
(auction purchaser) submitted that the High Court has completely misread
and misunderstood the facts of the case which resulted in incorrect
reasoning, leading to wrong conclusions. Learned senior counsel also
submitted that the judgment in writ petition No. 13376 of 2008 as well as
the order in Review Petition No. 99 of 2010 had attained finality and,
consequently, the orders dated 28.12.2007 and 01.10.2010 cancelling the
proposal for OTS cannot be questioned. Learned senior counsel also pointed
out that the conditions stipulated in the above mentioned orders were also
not complied with by 1st respondent, consequently, the only course open to
1st respondent was to pay the entire amount demanded by OSFC and IPICOL.
The 1st respondent did not pay the amount demanded, hence, Section 29 of
SFC Act was rightly invoked.
17. Ms. Shubhranshu Padhi, learned counsel appearing for the appellant in
SLP(C) No. 1125 of 2012 fully supported the arguments advanced by the
learned senior counsel Shri C.A. Sundaram and explained the various steps
taken by OSFC which resulted in invoking Section 29 of SFC Act.
18. Shri Ashok Panigrahi, learned counsel appearing on behalf of the
respondent, however, supported the judgment of the Hon’ble Court and
submitted that there is no justification in interfering with the judgment
of the Hon’ble Court, since the conditions laid down in OTS Scheme were
onerous and that procedures were not followed for the sale of the mortgaged
properties.
19. We express our strong disapproval of the manner in which the Division
Bench of the High Court has virtually sat in judgment over the judgment of
another co-ordinate Bench. We are of the view that the Division Bench of
the High Court overlooked some vital facts which have considerable bearing
on the outcome of this dispute, consequently, reopened a lis which has
attained finality, due to non-compliance of the various directions issued
by the co-ordinate Bench of the High Court. Failure to comply with the
various directions issued by the co-ordinate Bench in Writ Petition No.
13376 of 2008 and the order passed in Review Petition No. 99 of 2010 was
completely overlooked by the Division Bench.
Appreciation of Facts
20. Litigations in courts are won or lost mainly on facts more on law.
Duty is cast on all the parties who appear in a court of law to place the
correct facts so that the court can draw correct inferences which enable it
reach a logical, reasonable and just conclusion. Wrong facts lead a Court
to wrong reasoning and wrong conclusions. Duty is also cast on the Court
to take note of the facts which are correctly placed. Wrong appreciation
of facts leads to wrong reasoning and wrong conclusions and justice will be
the casualty. Deciding disputes involves, according to Dias on
Jurisprudence, knowing the facts, knowing the law applicable to those facts
and knowing the just way of applying the law to them. If any of the above
mentioned ingredients is not satisfied, one gets a wrong verdict. A Judge
has to reason out truth from falsehood, good from evil which enables him to
deduce inferences from facts or propositions. Facts are correctly stated
in the instant case but the Division Bench wrongly understood those facts
and wrongly applied the law, consequently, wrong inferences were drawn and
ultimately reached wrong conclusions.
21. Following are the facts and conclusions overlooked by the Division
Bench:
1) OSFC introduced an OTS scheme in the year 2006 and 1st respondent
had applied for settlement of its loan account under that scheme.
On 18.03.2006, the benefit of the scheme was extended to 1st
respondent and OSFC agreed in principle to settle the term loan
account on payment of Rs.1,16,21,200/-, subject to certain
conditions. IPICOL also approved the request of 1st respondent for
OTS at Rs.45 lacs with waiver of Rs.1,88,21,099/-, subject to
certain conditions.
2) OSFC and IPICOL, therefore, waived an amount of Rs.2,26,85,800/-
and Rs.1,88,21,099 and gave the benefit of the OTS scheme to 1st
respondent, subject to few other conditions like period of payment,
interest etc.
3) The 1st respondent had failed to comply with those conditions
imposed, consequently, OSFC and IPICOL had to withdraw the benefits
extended under the OTS scheme.
4) OSFC lodged another OTS scheme in the year 2007. Opportunity was
given to 1st respondent again to avail of the benefit of that
scheme. OSFC on 04.10.2007 requested 1st respondent to pay the
settlement amount of Rs.1,16,21,200/- with delayed payment of
interest within 10 days. The benefit of the said scheme was not
availed of by 1st respondent, consequently OSFC on 28.12.2007
withdrew that offer as well and advised 1st respondent to pay the
entire dues as per the agreement, failing which it was informed
that recovery proceedings would be initiated.
5) 1st respondent filed a Writ Petition No.13376 of 2008 to quash the
demand notice dated 22.08.2008 where it was pointed out by OSFC
that 1st respondent had not availed of all the benefits of the OTS
scheme extended by the Corporation, consequently they had to cancel
the said scheme. Further, it was also stated that in spite of
public notification and their intimation and frequent requests, 1st
respondent did not apply for the OTS 2007 Scheme.
6) When Writ Petition came up for hearing on 07.04.2010, the Court had
enquired whether 1st respondent would be still willing to deposit
the amount of Rs. 1 crore for consideration of their claim under
OTS. The matter again came up for hearing before the Division
Bench on 21.04.2010 on which the Court disposed of the writ
petition directing 1st respondent to deposit Rs.50,00,000/- each
before each of the two Corporations by 20.6.2010, failing which it
was ordered that the Corporations would be at liberty to take such
action as permissible under law under the State Financial
Corporation Act.
7) OSFC issued a loan recall notice to 1st respondent on 8.7.2011,
since it did not comply with the directions in WP No. 13376 of 2008
with a request to pay the entire outstanding amounts within 30
days, failing which the 1st respondent was informed that action
would be taken under Section 29 of SFC Act.
8) OSFC issued a seizure order on 02.08.2010 and during seizure, a
valuation report dated 17.09.2010 was prepared. Based upon the
valuation report, off- set price of the unit was fixed at
Rs.1,75,45,000/-. Sale notice was published in the Daily
newspapers “Samaj” and the “New Indian Express” on 18.09.2010. On
21.09.2010, again OSFC issued a notice to 1st respondent to clear
the outstanding dues with up-to-date interest of Rs.6,18,62,238/-.
9) Review Petition No. 99 of 2010 filed by 1st respondent in writ
petition No. 13376 of 2008 came up for hearing before the Division
Bench on 22.9.2010. While dismissing the Review Petition, the
Bench found that 1st respondent had no intention to clear the dues
of the Corporations which had financed for establishing a hotel.
The court also noticed that the mortgaged properties were taken
over by OSFC invoking Section 29 of SFC Act and advertised for
sale.
10) 1st Respondent filed a representation before DDAC on 29.9.2010
which was rejected and the order of rejection was communicated vide
letter dated 1.10.2010 and 1st respondent was informed that the
assets were already taken over under Section 29 of SFC Act on
15.9.2010 and was put to public auction, with due intimation.
11) Auction was concluded as per rules and ultimately, the appellant
was found to be the highest bidder at Rs.774,00,000 which was
accepted and sale letter dated 1.10.2010 was issued to the
appellant, who had paid the entire amount by 11.10.2010.
12) Sale Memo, Agreement to Sale was executed with the appellant on
11.10.2010 and possession was handed over to the appellant on that
date.
13) 1st respondent then on 11.10.2010 filed the present WRIT Petition
No. 17711 of 2010.
22. We are of the view that the above mentioned facts had considerable
bearing for rendering a just and proper judgment in writ petition No. 17711
of 2010, but those vital facts were completely overlooked by the Division
Bench and it had also ignored the binding judgment of the co-ordinate Bench
rendered in writ petition No. 13376 of 2008 and the order passed in Review
Petition No. 99 of 2010 and the steps taken by the Corporations as
permitted by the Division Bench.
23. A 3-Judge Bench of this Court in Haryana Financial Corporation and
Another v. Jagdamba Oil Mills and Another, (2002) 3 SCC 496 while dealing
with the scope of Section 29 of SFC Act held as follows:
“6. The Corporation as an instrumentality of the State deals with
public money. There can be no doubt that the approach has to be
public oriented. It can operate effectively if there is regular
realization of the instalments. While the Corporation is expected
to act fairly in the matter of disbursement of the loans, there is
corresponding duty cast upon the borrowers to repay the instalments
in time, unless prevented by unsurmountable difficulties. Regular
payment is the rule and non-payment due to extenuating
circumstances is the exception. If the repayments are not
received as per the scheduled time frame, it will disturb the
equilibrium of the financial arrangements of the Corporations. They
do not have at their disposal unlimited funds. They have to cater
to the needs of the intended borrowers with the available finance.
Non-payment of the instalment by a defaulter may stand on the way
of a deserving borrower getting financial assistance.”
24. The Court again reminded of the fact that the fairness required of
the Corporations could not be carried to the extent of disabling them from
recovering what is due to them and held as follows:
“13. …….The Corporation is an independent autonomous statutory body
having its own constitution and rules to abide by, and functions
and obligations to discharge. As such in the discharge of its
functions, it is free to act according to its own light. The views
it forms and decisions it takes are on the basis of the information
in its possession and the advice it receives and according to its
own perspective and calculations. Unless its action is mala fide,
even a wrong decision by it is not open to challenge. It is not
for the courts or a third party to substitute its decision,
however, more prudent, commercial or businesslike it may, for the
decision of the Corporation…...”
25. The Court while explaining and over-ruling Mahesh Chandra v. Regional
Manager, U.P. Financial Corporation and Others, (1993) 2 SCC 279 held as
follows:
“Indulgence shown to chronic defaulter would amount to flogging a
dead horse without any conceivable result being expected. As the
facts in the present case show not even a minimal portion of the
principal amount has been repaid. That is a factor which should
not have been lost sight by the courts below. It is one thing to
assist the borrower who has intention to repay, but is prevented
by insurmountable difficulties in meeting the commitments. That
has to be established by adducing material. In the case at hand
factual aspects have not even been dealt with, and solely relying
on the decision in Mahesh Chandra's cases (supra), the matter
has been decided.”
26. We are of the view that the principles laid down by this Court in the
above judgments apply to the case on hand, if the facts are properly
appreciated. The Division Bench, in the impugned judgment, took the view
that the Corporations had not followed the guidelines laid down by this
Court in Kerala Financial Corporation v. Vincent Paul and Another, (2011) 4
SCC 171. In our view, this is factually incorrect. This Court, in the
above judgment, indicated that the authority concerned should serve to the
borrower a notice of 30 days for sale of immovable assets. In this case,
Corporation had issued the recall notice dated 08.07.2010 with a request to
pay the entire outstanding dues within 30 days otherwise, failing which, it
was stated that action under section 29 of SFC Act would be initiated
against the 1st respondent. Seizure order was issued by the Corporation
and the entire assets of the unit were taken over under Section 29 of the
Act on 15.09.2010 which was after the expiry of 30 days from the date of
notice dated 08.07.2010. Therefore the guidelines laid down in the above
referred judgment have also been complied with. Even otherwise, the
guidelines issued by this Court in Vincent Paul case would operate only
prospectively and that too depends upon the facts and circumstances of each
case.
27. We have found that the procedure laid down under Section 29 of SFC
Act has been followed by the Corporations. The independent valuer
submitted his report on 17.09.2010 and the off-set price of the unit was
fixed after getting it valued by an independent valuer. It was based upon
the valuation report that the off-set price of the unit was fixed at
Rs.1,77,45,000/- on 17.09.2010. Sale notice was published in the News
Papers on 18.09.2010 and the auction was conducted on 29.09.2010. In our
view, the High Court has committed an error in holding that off-set price
of property was not valued before the conduct of auction and that there was
no due publication of auction. Sale notice, it is seen, was published in
the “Samaj” a vernacular paper and also in the “New India Express” a widely
circulated English newspaper on 18.09.2010 and the Corporation had received
nine offers and after protracting negotiations with all the bidders, the
offer of the appellant was accepted being the highest. The Corporation
before putting the appellant in possession again issued a notice dated
21.9.2010 to 1st respondent enquiring whether he would match the offer.
1st Respondent did not avail of that opportunity as well. It is under such
circumstances that sale letter dated 1.10.2010 was issued to the appellant
with a copy to all the Directors/Promoters/Guarantors of 1st respondent
company. The appellant paid the balance consideration of Rs.5,65,20,000 on
11.10.2010 and the Sale Memo was extended on that date and the property was
also delivered.
28. We find no illegality in the procedure adopted by the Corporation,
since 1st respondent had failed to comply with the directions issued by the
co-ordinate Bench of the Orissa High Court in writ petition No. 13376 of
2008, which gave liberty to the Corporations to proceed in accordance with
Section 29 of SFC Act. We are of the view that the Division Bench of the
High Court had overlooked those vital facts as well as the binding judgment
of a co-ordinate Bench in writ petition No. 13376 of 2008 and had wrongly
reopened a lis and issued wrong and illegal directions.
29. In the said circumstances, we are inclined to allow both the appeals
and set aside the judgment of the Division Bench of the Orissa High Court.
However, in the facts and circumstances of the case, there will be no order
as to costs.
……………….……………………..J.
(K. S. RADHAKRISHNAN)
………………………………….…..J.
(DIPAK MISRA)
New Delhi
September 6, 2012
