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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

INTERLOCUTORY     APPLICATION     NOS.     7-9     OF     2012   

IN

SPECIAL     LEAVE     PETITION     (CIVIL)     NOS.     30894-96     OF     2011   

Pravin Gada and Another … Petitioners

Versus

Central Bank of India and others … Respondents

O     R     D     E     R   

These are the applications for seeking certain directions  

in view of the subsequent developments after the order passed  

on 5.7.2012.

2. We have heard Mr. C.A. Sundaram, learned senior  

counsel for the petitioners and Mr. Mukul Rohtagi and Mr.

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Jaideep Gupta, learned senior counsel for the Central Bank of  

India, respondent No. 1.

3. Before we advert to order dated 5.7.2012, it is  

necessitous to refer to order dated 27.3.2012.  In the said  

order, after referring to the order passed by the High Court in  

W.P. No. 2689 and other connected matters, the interim order  

passed by this Court on 25.11.2011, recording the contentions  

of Mr. Sundaram, learned senior counsel for the petitioners  

and Mr. Jaideep Gupta, learned senior counsel for the Central  

Bank of India and taking note of the chart produced in respect  

of the dues of the Central Bank of India, Standard Chartered  

Bank and Workmen through Official Liquidator, this Court  

passed the following order: -

“It is submitted by Mr. Gupta that in  fitness of things and regard being had to the  concept of obtaining of the highest price in  Court sale, having of 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.

Mr. Sundaram, learned senior counsel  would contend that the sale had been given  

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effect to in the year 2006 on acceptance of 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.

Be it noted that at one point of time, a  third party had deposited 6 crores to purchase  the property but later on he withdrew as the  matter was litigated in Court.

Having heard 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 3  crores and the same shall be deposited before  the Recovery Officer of the DRT to enable one  to participate in the bid.

(iii) Any one 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 the DRT within a week from the  date of publication of the advertisement in the  newspaper.

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(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 finalized and  the bid sheet shall be produced before this  Court in a sealed cover.

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.”

4. After the said order was passed two Interlocutory  

Applications forming Nos. 4-6 of 2012 were filed.  This  

Court, looking at the facts and the contentions raised,  

passed the following order on the said applications: -

“These applications were preferred by the Bank  stating that going by the present valuation the  property will fetch nearly Rs.10 crore whereas  the order stipulates Reserved Price only Rs.3  crores.  Hence, the Bank has sought  modification of the upset price fixed by the  Court.

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Learned counsel for the Bank also  submitted that as per the Debt Recovery  Tribunal Act the time stipulated for auction is  thirty days whereas the order directs to  conduct the auction within two weeks.  To this  extent the respondent seeks modification of  that direction also.

Learned counsel on the either side  submitted that the auction should go on  without any delay.

Considering the facts and circumstances  of the case we are inclined to dispose of these  applications directing the Recovery Officer to  go on with the auction within the time limit  stipulated in the bid.  The question as to  whether the upset price has been correctly  fixed or not will depend upon the bid amount  offered by the bidders in the auction.

With the above directions, the I.As are  disposed of.”

5. In the present applications it has been asseverated that  

in compliance with the order dated 5.7.2012, the Recovery  

Officer of Debt Recovery Tribunal-I, Mumbai, ordered for  

publication of the notice in two newspapers which was  

published on 20.7.2012 calling upon interested parties to give  

their offer within seven days from the date of publication as  

directed by this Court vide order dated 27.3.2012.  Pursuant  

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to the publication carried in English and Kannada newspapers  

no other offer whatsoever was received by the Recovery Officer  

and till 7th only the offer of the petitioners, namely, Praveen  

Gada and Amarnath Singhla, was received.

6. When the matter was taken up, order dated 30.8.2012  

passed in R.P. No. 419 of 2003 was brought to our notice.  The  

said order reads as under: -

“As per directions of the Hon’ble Supreme  Court vide its orders dated 27.3.2012 &  5.7.2012, advertisement was published fixing  reserve price at Rs.3.00 Crores.

Only one bid of Shri Pravin Gada &  Amarnath Singhla has been received on  07.08.2012 as per public notice.  His bid was  opened at the scheduled date & time of the  auction.  He has given offer of Rs. 3 crores.  As  his participation in auction was without  deposit as directed in above orders, there was  no question of his depositing EMD.

Relevant columns of Bid Sheet were  accordingly filled in and signature of the  bidder has been obtained.  As per the  directions, the said bid sheet be submitted to  the Hon’ble Supreme Court.

Apart from above, 3 offers in closed  envelops were received today, but those are  not opened & considered in view of the  

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directions of the Hon’ble Supreme Court as per  aforesaid orders.

On the date of auction the above 3 closed  envelops containing offers have been received.  This being new situation arisen at the time of  auction, in my opinion it would be appropriate  to bring this fact to the kind notice of the  Hon’ble Supreme Court.  Hence these 3 closed  envelops be also submitted to the Hon’ble  Supreme Court.

As per directions of the Hon’ble Supreme  Court, the Bid Sheet at Exh. 154 be submitted  to the Hon’ble Supreme Court in a sealed  cover.”

7. The bid sheets were opened before us and we find that an  

offer amounting to Rs.3,30,00,000/- by Kumar Enterprises,  

Rs.3,30,00,000/- by Riddisiddhi Bullions Ltd. and  

Rs.3,30,00,000/- by Krishna Texturisers Pvt. Ltd. were  

deposited by way of bank drafts on 29.8.2012 and 30.8.2012  

respectively.

8. It is submitted by Mr. Sundaram, learned senior counsel  

for the petitioners that as the said offers were not in accord,  

the same should not be considered and the petitioners should  

be treated as the highest bidder in the auction.  Mr. Rohtagi  

and Mr. Gupta, learned senior counsel for the Central Bank of  

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India, per contra, submitted that the price of the property as  

on today is worth more than Rs.10 crores and the reason for  

the offerees not coming is that the petitioners are in  

possession and they have put up a board indicating their  

name and status.  It is urged by them that it is one thing to  

say that the auction is conducted by virtue of the order passed  

by this Court and the whole thing is subject to the pendency  

of the lis but it is another thing to see at the entrance that the  

board is fixed and the people are not allowed to survey the  

nature and character of the assets.  The photographs of the  

board that have been put up are filed in Court and we have  

perused the same.  Be it noted, the putting up of the said  

photographs is not disputed.   

9. Regard being had to the facts and circumstances, we are  

of the considered opinion that there should be a re-auction  

and we are inclined to modify the conditions incorporated in  

the earlier order.  Keeping in view the totality of circumstances  

we issue the following directions: -

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(i) The property in question be put to auction by issuing a  

public advertisement within two weeks 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 advertisement that the  

reserved price is Rs.5 crores and the same shall be  

deposited by way of bank drafts drawn on a nationalized  

bank before the Recovery Officer of the DRT to enable one  

to participate in the bid.  The advertisement shall  

stipulate that the deposit of the reserved price fixed by  

this Court is a condition precedent for participation in  

the auction.

(iii) It shall be clearly stated in the advertisement that the  

property would be available for inspection in presence of  

the Registrar of Civil Court or any equivalent officer  

nominated by the Principal District and Session Judge,  

Mysore, and it is so done to avoid the grievance from any  

quarter that the property was not available for proper  

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verification.  The inspection by any interested party shall  

be done within one week from the date of advertisement  

between 11.00 a.m. to 3.00 p.m.

(iv) During the entire period of inspection the concerned  

officer deputed by the learned Principle District and  

Sessions Judge, Mysore shall see to it that the board that  

has been fixed is removed from the site so that there can  

be inspection of the plot without any kind of pre-

conceived notion by the perspective bidders.   

(v) The aforesaid reserved price shall be deposited before the  

Recovery Officer of the DRT within ten days from the date  

of the advertisement.  Any one who would not deposit the  

reserved price within the time limit, his bid shall not be  

considered.

(vi) The auction shall be held within a period of two weeks  

from the date of issuance of the advertisement which  

shall state the specified time and place for the auction.

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(vii) The petitioners without prejudice to the contentions to be  

raised and dealt with in these Special Leave Petitions  

shall participate in the auction without the deposit as  

they have purchased the property in the year 2006.

(viii) The offerees who have already given the bids shall  

deposit the balance amount to meet the reserved price  

before the Recovery Officer of the DRT failing which they  

shall be ineligible to participate in the bid.

(ix) After the submission of the bids there shall be a public  

auction amongst the eligible offerees to get the maximum  

price.

(x) The auction shall not be finalized and the bid sheet shall  

be produced before this Court in a sealed cover for  

issuance of further directions, if required.

10. We repeat at the cost of repetition that the above  

arrangements are subject to the result of the final adjudication  

to the Special Leave Petitions.   

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11. A copy of the order passed today be sent by fax, e-mail  

and speed-post to the Principal District Judge, Mysore by the  

Registry of this Court.

12. List the matters on 1.11.2012.

……………………………….J. [K. S. Radhakrishnan]

……………………………….J. [Dipak Misra]

New Delhi; September  18, 2012.

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