MANGALAGIRI VENKATACHALAPATHI RAO Vs. MANAGING DIRECTOR APSFC HYD

JUDGEMENT

(1.) This writ appeal is directed against the order of the single Judge dismissing the writ petition filed by the appellant in seeking a declaration that the sale of immovable properties of Jayalakshmi Cellulose and Allied Products Private Limited, Dokaparru (for short 'the defaulting company') by Respondents 1 to 3 is void and a direction for conducting a fresh auction.

(2.) The appellant claiming himself to be a share-holder of the defaulting company filed the writ petition. The defaulting company obtained a loan of Rs. 15,00,000/- on 21-5-1980 for setting up a unit for the manufacture of bleached cotton linters repayable in 17 half- yearly instalments, at the rate of 15 1/2% interest per annum on half-yearly rests and an additional loan of Rs.1,40,000/- in 1988 repayable in 10 half-yearly instalments at the rate of 16 1/2% interest per annum on half- yearly rests. As the defaulting company did not pay the instalments, the respondents put the properties of the defaulting company to auction after following the procedure and were sold to fourth Respondent for Rs. 10,60,000/-. The contention of the appellant-petitioner is that defective advertisements were made for selling the properties of the defaulting company, that the sale money would satisfy the debts of the first respondent only and that a tender of Rs.12,60,000/- of another tenderer was wrongly rejected and that of himself for Rs. 13,00,000/- was also rejected. Respondents 1 to 3 filed counter-affidavit denying the allegations. Fourth respondent filed separate counter-affidavit in similar lines of Respondents 1 to 3. The single Judge dismissed the writ petition. Against that order, the present writ appeal is filed.

(3.) The learned Counsel for the appellant, Sri N. Subba Reddy, contended that the sale is vitiated by number of irregularities, that the appellant was willing to purchase the unit for Rs. 13,00,000/-, that there was no communication to the defaulting company before accepting the bid of the fourth respondent, that the action of the Respondents 1 to 3 in not accepting the tender of the appellant is arbitrary and illegal and that the acceptance of bid of fourth respondent is not proper and valid.