Order
1. The present special leave petition has been preferred under Article 136 of the Constitution of India challenging the order dated 20-9-2011 passed by the Division Bench of the High Court of Judicature of Bombay in Jay Electric Wire Corpn. Employees Union v. Pravin Gada (2011) 6 Mah LJ 675 and other connected matters whereby the High Court in exercise of its jurisdiction under Article 226 of the Constitution of India has quashed the order passed by the Debts Recovery Appellate Tribunal (for short “DRAT”) dated 3-3-2011 wherein DRAT had set aside the order of the Debts Recovery Tribunal (for short “DRT”) and restored the confirmation of sale of immovable property in favour of the first respondent who is the petitioner before this Court. The High Court has ascribed certain reasons for quashing the order.
2. It is worth noting that after quashment of the order, the Division Bench had directed as follows:
“We direct that the Recovery Officer attached to DRT to issue a public advertisement which shall be published in at least two newspapers, one in English and another in Kannada having circulation in Mysore, inviting bids for the sale of the property. The terms and conditions governing the sale shall be laid down by the Recovery Officer of DRT, and a fresh valuation shall be carried out on the basis of which the reserve price of the property shall be fixed. We record the statement made on behalf of Central Bank and Standard Chartered Bank by their counsel that both the banks shall cooperate with the Recovery Officer and shall meet all the expenses of the sale, including towards newspaper advertisements. On the request of the two banks, we further clarify that if the banks are ready and willing to meet the expenses for the issuance of a publication in any additional newspapers, that shall also be permitted by the Recovery Officer at the expenses which have been agreed to be borne by the banks. We direct the Recovery Officer to expedite the process of sale and to hold a meeting for fixing the terms and conditions within a period of three weeks from today. The sale process should be completed within a period of three months from the date on which an authenticated copy of this order is placed before the Recovery Officer.”
3. This Court while issuing notice on 25-11-2011 SLPs (C) Nos. 30894-96 of 2011, had directed status quo to be maintained by the parties. When the matter was heard for some time it was submitted by Mr C.A Sundaram, learned Senior Counsel for the petitioner that the High Court has grossly erred in directing the sale of the property by inviting bids despite the factum that public auction was not successful and eventually the sale was effected by the direction of DRT and ultimately the offer of Rs 2.5 crores was accepted from the petitioners herein. The learned Senior Counsel has urged many other contentions which need not be referred to in praesenti having regard to the nature of directions which we are going to pass today.
4. It is worth noting that Mr Jaideep Gupta, learned Senior Counsel appearing for Central Bank of India has filed a chart of the amount due from the original buyer, namely, Jay Electric Wire Corporation. We think it apposite to reproduce the chart in toto:
“1. Central Bank of India (Respondent 1): As per the recovery certificate dated 6-11-2003 issued by DRT an amount of Rs 10.99 crores is due and payable which as on 31-3-2012 @ 12% per annum at quarterly rests amounts to Rs 42.41 crores.
2. Standard Chartered Bank (Respondent 2): As on 26-8-2003 an amount of Rs 1.12 crores is outstanding along with interest @ 12% per annum.
3. Workmen through Official Liquidator (Respondent 4): As per the recovery certificate issued by the Deputy Labour Commissioner on 18-12-2006 an amount of Rs 4.44 crores is due and payable as computed until 1999.”
5. It is submitted by Mr Gupta that in fitness of things and regard being had to the concept of obtaining the highest price in court sale, having an auction is the warrant and, therefore, auction should be directed to be held. The learned Senior Counsel further submitted that the property is likely to fetch much more amount than that has been deposited by the petitioners.
6. Mr Sundaram, learned Senior Counsel would contend that the sale had been given effect to in the year 2006 on acceptance of Rs 2.5 crores and with the efflux of time if there has been a price rise solely on the said base a public auction should not be directed.
7. Be it noted that at one point of time, a third party had deposited Rs 6 crores to purchase the property but later on he withdrew as the matter was litigated in court.
8. Having heard the learned counsel for the parties and regard being had to the totality of the circumstances, we issue the following directions:
(i) The property in question be put to auction by issuing a public advertisement in at least two newspapers one in English and another in Kannada language having wide circulation in the city of Mysore inviting bids for the sale of the property.
(ii) It shall be mentioned in the advertisements that the reserve price is Rs 3 crores and the same shall be deposited before the Recovery Officer of DRT to enable one to participate in the bid.
(iii) Anyone who would not deposit the amount would not be permitted to participate in the auction as speculative bids are to be totally avoided.
(iv) The newspaper publication shall be made within a period of two weeks stipulating that the deposit is a condition precedent for participation in the auction which shall be made before DRT within a week from the date of publication of the advertisement in the newspapers.
(v) The auction shall be held within a period of two weeks from the issuance of the advertisement which shall state the specified time and place for the auction.
(vi) The petitioners without prejudice to the contentions to be raised and dealt with in these special leave petitions shall participate in the bid without the deposit as they have purchased the property in the year 2006.
(vii) The bid shall not be finalised and the bid-sheet shall be produced before this Court in a sealed cover.
9. We reiterate at the cost of repetition that the above arrangements are subject to the result of the final adjudication in these special leave petitions. List the matter after five weeks.