M/S. Chaudhary & Sons (Forgings) ... vs Asset Sales Committee & Ors.
2009 Latest Caselaw 1704 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      W.P.(C) 8540/2009
                                        Date of Decision: 27th April, 2009
       M/s. Chaudhary & Sons (Forgings) P. Ltd.
       Plot No.4, South of G.T. Road
       Bulandshahar Road Indl. Area
       Ghaziabad.                                 ..... Petitioner
                    Through: Mr. Rajeeve Mehra, Sr. Adv. with
                                Mr. Kunal Sinha and
                                Mr. Sumeher Bajaj, Advs.
                    versus

       1. Asset Sales Committee
          Formed under direction of Appellate Authority for
          Industrial & Financial Reconstruction
          Kamla Tower
          Kanpur.

       2. J.K. Synthetics Limited
          1st Floor, Ghalib Institute
          Mata Sundari Lane
          New Delhi.

       3. Mr. K.N. Khandelwal
          Member-Asset Sales Committee
          J.K. Synthetics Limited
          Kamla Tower
          Kanpur.

       4. Mr. Sanjeev Garg
          Member-Asset Sales Committee
          1st Floor, Ghalib Institute
          Mata Sundari Lane
          New Delhi-110 002.

       5. S.R. Buildcon Pvt. Ltd.
          412, B-08, Building GDITL Tower
          Netaji Subhash Palace, Pitampura,
          Delhi-110 034.                              .... Respondents

Through: Ms. Geeta Sharma, Adv. for R-1.

Ms. Maneesha Dhir and Ms. Preeti Dalal, Adv. for R-2.

Mr. Chetan Sharma, Sr. Adv. with Mr. Sanjay S. Chhabra, Adv. for R-5.

CORAM:

HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE MR. JUSTICE SIDDHARTH MRIDUL

1. Whether reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporter or not?

3. Whether the judgment should be reported in the Digest?

MADAN B.LOKUR, J (ORAL):

The Petitioner is aggrieved by an order passed by the Asset Sale

Committee accepting the bid of Respondent No.5 pursuant to a tender for

the sale of Jhalawar assets of M/s J.K. Synthetics Ltd.

2. It is mentioned in the tender document in paragraph 1.2(f) that the

minimum reserve price is fixed by the Asset Sale Committee is Rs.32.00

crores plus taxes as applicable.

3. Paragraph 3.5 of the tender document pertains to participation in

open bidding and paragraph 3.6 pertains to acceptance of tenders.

Learned counsel for the Petitioner relies on paragraph 3.6(b) and 3.6(c)

which reads as follows:

"3.6 Acceptance of Tenders:

(a) xxxxxxx

"(b) As per the directives of Hon'ble AAIFR, ASC has a right to dispose off the Jhalawar Assets without referring to Hon'ble AAIFR/BIFR on receipt of the bid for higher than the Minimum Reserve Price as stated here in above. However, ASC is not bound to accept the same. ASC shall have discretion to accept or reject any bid without assigning any reason.

(c) The bids if any received for lower amount than the Minimum Reserve Price but found suitable by ASC shall be subject to confirmation by BIFR/AAIFR and such acceptance by ASC shall be communicated to the concerned Tenderer in writing. However, the sale shall be completed only after getting approval of BIFR/AAIFR."

4. It is stated by learned counsel for the Petitioner that though the

reserve price is Rs.32 crores plus applicable taxes, the Petitioner gave a

bid for Rs.24,01,00,000/- after tendering the earnest money. Since the

bid of the Petitioner was below the reserve price it appears that the Asset

Sale Committee did not permit the Petitioner to further participate in the

bidding process.

5. Thereafter the remaining bidders, all of whom gave a bid above the

reserve price had interse bidding and the highest bid was given by

Respondent No.5 of Rs.36.76 crores.

6. Learned counsel for the Petitioner today says that his client is

prepared to bid even higher than the highest bid amount and, therefore,

the entire bidding process be re-opened.

7. On a reading of paragraph 3.6 of the bid document it is clear that

three situations can arise:

(i) Where all the bidders bid above the minimum reserve price:

Then the Asset Sale Committee has a right to dispose of the assets without further reference to the Board of Industrial and Financial Reconstruction.

(ii) Where some of the bids are above the minimum reserve price and some are below the minimum reserve price: The Asset Sale Committee is entitled to reject any of the bids made.

(iii) Where all the bids are below the minimum reserve price:

Then the Asset Sale Committee may accept the bids for a lower amount but this will be subject to the approval of the Board of Industrial and Financial Reconstruction.

8. As can be seen from the above, the Petitioner's case falls in the

second category since some bids were above the minimum reserve price

and some below. In view of this, the Asset Sale Committee rejected

those bids that were below the minimum reserve price and the bidders

who had bid above the minimum reserve price were allowed to carry out

inter se bidding.

9. We do not see any error in the view taken by the Asset Sale

Committee in rejecting the bid of the Petitioner since the Petitioner falls

within the second category for acceptance of tenders as per paragraph

3.6(b) and 3.6(c) of the tender document.

10. There is no merit in the writ petition. Dismissed.

                                        MADAN B. LOKUR, J




APRIL 27, 2009                          SIDDHARTH MRIDUL, J
dn