PRAVIN GADA Vs CENTRAL BANK OF INDIA .
Bench: K.S. RADHAKRISHNAN,DIPAK MISRA
Case number: C.A. No.-008658-008660 / 2012
Diary number: 34640 / 2011
Advocates: Vs
DUA ASSOCIATES
Page 1
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.
Page 2
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
2
Page 3
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.
3
Page 4
(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.
4
Page 5
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
5
Page 6
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
6
Page 7
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
7
Page 8
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: -
8
Page 9
(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
9
Page 10
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.
1
Page 11
(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.
1
Page 12
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.
1