Later Offer Tendered Was Of No Legal Significance & Rightly Not Acknowledged By Authority: SC In An Auction Case
The Supreme Court in an auction case has dismissed the appeal on the ground that the later offer tendered by the appellants was of no legal significance and rightly not acknowledged by the authority.
The two-Judge Bench comprising Justice Ajay Rastogi and Justice Bela M. Trivedi observed, “… the appellants have not participated in the bidding process and it is not the case of the appellants that the auction notice published on 24th May, 2004 was not in their knowledge. In our considered view, later offer in the facts and circumstances of the case tendered by the appellants was of no legal significance and rightly not acknowledged by the authority.”
The Bench said that the question of locus was never raised by the appellants before the High Court and once the subject issue has been looked into by the High Court on merits and it is persuaded that order of the AAIFR confirming the bid pursuant to its order is not legally sustainable, there is no justification at this stage to non-suit the claim of the appellants prayed for.
Senior Advocate Jaideep Gupta appeared for the appellants while Advocate Rakhi Ray appeared for the respondents.
Brief Facts -
A batch of appeals was directed against the judgment passed by the Punjab and Haryana High Court whereby it set aside the auction held pursuant to auction notice by the Industrial Development Bank of India (IDBI). M/s Bharat Commerce & Industries Limited (BCI) was established in 1964 but later became a sick company and by an order passed by the BIFR, IDBI was directed to become the Operating Agency to take up the sale of assets of BCI under Section 20(4) of SICA in terms of ASC guidelines.
An advertisement came to be published by IDBI for the sale of land and the appellant was the solitary bidder who submitted its bid for the purchase of Block IV for Rs. 2,84,00,000/- and paid earnest money of Rs.6 lakhs. The Operating Agency accepted the bid by a letter subject to the condition that the successful bidder has to comply with the terms and conditions of the ASC, as advised to all the bidders.
The Supreme Court after hearing the contentions of the counsel directed, “… the money deposited by the appellants in Civil Appeal No. 10128 of 2011 shall be refunded in terms of the order of the High Court impugned dated 5th February, 2010. At the same time, the official liquidator may take all reasonable steps to fetch the optimum value of the property in order to achieve the object of public auction.”
Accordingly, the Apex Court dismissed the appeals.
Cause Title- Rajiv Kumar Jindal and Others v. BCI Staff Colony Residential Welfare Association and Others