MECHANO PAPER MACHINES LIMITED Vs. ALLAHABAD BANK

JUDGEMENT

(1.) The petitioners question the propriety of an order dated May 17, 2013 passed by the Debts Recovery Appellate Tribunal at the initial stage of an appeal arising out of an order dismissing proceedings under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Though the petitioners seek to assail the conduct of the bank, independent of the challenge to the order of the appellate tribunal, paragraph 54 of the petition limits the scope of the petition to the ad interim order of the appellate tribunal.

(2.) The petitioner company obtained credit facilities from the respondent bank, failed to repay the same and now complains of the sale of the manufacturing facility of the petitioner company to the respondent No. 4 to be at a gross undervalue. The petitioners say that the property was put up for sale by a notice of January 16, 2006 where the reserve price indicated was Rs.10.98 crore. There does not appear to have been any taker for the property at such value, but the petitioners attribute mala fides to the bank scaling down the reserve price to Rs.8.52 crore in its subsequent sale notice issued early in 2011 for the property, which is off the Dum Dum airport.

(3.) To record some of the facts narrated by the petitioners, whether or not they may be relevant in the ultimate consideration herein, it needs to be noticed that before the time denoted for the bids to be opened had elapsed following the second notice for sale issued in 2011, the petitioners apparently made an offer to the bank that they were willing to pay Rs.1 lakh more than the best offer received by the bank for the property; and, in support thereof, the petitioners deposited a sum of Rs.1 crore by way of earnest money which exceeded 10 per cent of the reserve price that was indicated by the bank in the relevant sale notice. The petitioners claim that on March 2, 2011, the petitioners caused the third respondent company to make an offer of Rs.10 crore for the property with an indication in the offer letter to negotiate for a higher price. It was at such stage that, inter alia, the petitioner and the third respondent companies brought a petition under Article 226 of the Constitution to this court challenging the sale of the property by the bank at a value less than the offer of the third respondent.