SHAKHARAMSETH EMPLOYEES UNION Vs. ICICI BANK LIMITED

JUDGEMENT

(1.) Appeal No.302 of 2008 and Appeal (Lodging) No.337 of 2008 are directed against the order of the learned single Judge dated 27th June, 2008 by which the learned single Judge permitted the highest bidder to withdraw its bid in respect of the land admeasuring 5,41,436 sq. mtrs. and directed a fresh public auction by disposing of the Court Receiver's Report. Appeal (Lodging) Nos.336 and 347 of 2008 are directed against the order of the learned single Judge dated 12th March, 2008, fixing the reserve bid at Rs.1650 crores for sale of land admeasuring 5,41,436 sq. mtrs.

(2.) Since the point involved in all these appeals being common, all these appeals are disposed of by this common judgment at the admission stage itself.

(3.) The ICICI Bank instituted a suit being Suit No.3636 of 1999 as debenture holders of the Company in liquidation i.e. Pal Peugeot under debenture deed dated 21st December, 1997 for Rs.136.79 crores. The said suit was filed on 12th May, 1999. On 30th June, 1999, the Court Receiver was appointed in connection with the suit properties. By an order dated 8th February, 2002, the Receiver was directed to sell the property. On 5th July, 2002, the first auction sale was held and 41 offers were received but the same were rejected as all the bids were below the reserve price. On 3rd September, 2002, second auction was held and it seems that 5 offers were received in connection with the aforesaid second auction. The learned single Judge did not accept the said offers. Even the third and the fourth auctions which were held on 5th May, 2003 and 17th January, 2004 respectively met with the same fate. Since bid received in the aforesaid auctions did not exceed Rs.60 crores and since it was much below the reserve price fixed by the Court, the said auction proceedings were ultimately resulted into a failure. Subsequently, by an order dated 4th March, 2008, the learned single Judge directed sale of 5,41,436 sq. mtrs. of land. Four valuation reports were submitted and the learned single Judge fixed the reserve price by a separate order. The said order was passed on 12th March, 2008. The learned single Judge at the time of fixing the reserve price for sale of the aforesaid land directed that the envelope containing the reserve price should not be opened during the auction sale. Subsequently, the auction was held on 22nd April, 2008. Citra Developers Ltd., hereinafter referred to as the "highest bidder", gave its bid at Rs.676 crores. The Court Receiver accordingly accepted the said bid on the ground that the same is the highest bid and the said bidder was treated as successful bidder by the Court Receiver. In view of clause 16 of the terms and conditions of the sale, the highest bidder deposited Rs. 139 1 crores, in addition to the earnest money of I Rs.30 crores, to make 25 per cent of the purchase price of Rs.676 crores. The Court Receiver thereafter submitted his Report No. 162 of 2008 and sought various directions as to whether the offer of highest bidder should be accepted or not and whether the sale should be concluded on that basis. In case if the said offer is not accepted, whether the Court Receiver should readvertise the sale and re auction the said property. The matter thereafter came up for hearing before the learned single Judge on 5 th May, 2008. The learned single Judge found that the amount offered by the highest bidder is much below the reserve price fixed by the Court and, therefore, the same cannot be accepted. The matter was adjourned to 6th May, 2008. At the request of the highest bidder and another bidder, the Court disclosed the reserve price to the parties. Accordingly, the Court opened the sealed cover and pointed out that the reserve price is fixed at Rs. 1,650 crores. The Court passed the following order on 5th May, 2008.