M/S D.V. Exports v. Idbi and Anr

ORDER %

03.04.2017 \ In view of order passed in W.P. (C) No. 265 1/2014, this writ petition is disposed of. INDIRA BANERJEE, J ANIL KUMAR CHAWLA, J APRIL 03, 2017 • rs / - - * IN THE HIGH COURT OF DELHI AT NEW DELHI •

Reserved on: February 14, 2017 Decided on: April 03, 2017 + WP(C)2651/2014 NATIONAL TEXTILE CORPORATION LIMITED .....Petitioner Through: Mr. Sandeep Sethi, Sr. Advocate with Mr. Sanjoy Ghose, Mr. Rhishabh Jetley and Ms. Pratistha Vij, Advocates. Ii versus I D.V. EXPORTS AND ORS. Respondents Through: Mr. Souhabho Ghosh and Mr. shrey • Chathly, Advs, for Ri. • Mr. Sanjib K. Mohanty, Senior Panel Central Government Counsel for R-5. CORAM: -HON'BLE MS. JUSTICE INDIRA BANERJEE HON'BLE MR. JUSTICE ANIL KUMAR CHAWLA JUDGMENT INDIRA BANERJEE, J --

¶1In this writ petition the petitioner, National Textile Corporation Ltd., hereinafter referred to as NTC, has challenged a judgment and order dated 26.03.2014 passed by the Appellate Authority for Industrial and Financial Reconstruction, hereinafter referred WP(C) NO.2651/2014 - Page 10111 • to as AAIFR, dismissing Appeal No.67/2012 filed by NTC, against an order dated 18.01.2012 passed by the Board for Financial Reconstruction (BIFR) in the application being M.A. No.777/2011 and M.A. No.807/2011 in BIFR Case No.501/2008.

¶2NTC and some of its subsidiaries were declared sick under the Sick Industrial Companies (Special Provisions) Act, 1985, hereinafter referred to as the SICA. Hira Mills, Ujjain (MP) was declared a sick industrial undertaking under the SICA.

¶3By an order dated 01.04.2006, the BIFR permitted the subsidiaries of NTC to be merged With NTC. On 04.09.2008, a modified rehabilitation scheme was sanctioned by BIFR in • respect of NTC and on 14.09.2008, an Asset Sale Committee was • constituted by the BIFR.

¶4On 23.12.2009, BIFR passed an order extending the implementation of the sanctioned revival scheme till 31.03 .2011. Thereafter on 12.10.2010 guidelines were issued for sale of properties by the Asset Sale Committee. On 18.11.2011, the Board of Directors of NTC rook a policy decision that reserve NO. 265112014 ---I price for sale of assets, once fixed would remain valid only for six months. --

¶5Pursuant to a rehabilitation scheme sanctioned by the BIFR, the NTC advertised auction of its property at Hira Mills, Ujjain. As per the advertisement, the tender was for a sale of surplus. properties on, 'as is where is' and 'as is what is', basis in compliance of the said rehabilitation scheme. The reserve price for the said property was kept at Rs.40.90 crorTes and all applicants were to make earnest money deposit of Rs.2.05 crores. One M/s D.V. Exports, the respondent no.1 offered Rs.76.51 crores. The offer of MIs D.V. Exports which was almost double the reserve price, was the highest offer. Even though as per terms and conditions of the tender documents, the successful bidder had to deposit a bank guarantee for the full amount excluding the earnest money deposit, within 15 days of receipt of intimation regarding acceptance of bid, no such intimation was received. 1,VP(C)IVO.265112014

¶8According to M/s D.V. Exports, D.V. Exports got bank guarantees oUfltiflgto Rs.75 crores sanctioned from the Bank of Baroda, Punjab Natioflal Bank and Bank of India.

¶9D.V. Exports did not receive any intimation of confirmation of • f reminders and requests. In the sale; allegedly inspite o circumstances, D.V. Exports filed an application before the BIFR being M.A. No.777/2011 on 09.12.2011 for directions on the Asset Sale Committee to apprOVe the bid of D.V. Exports and also bought orders restraining NTC from creating third party interest in respect of the property in question.

¶10The said application being M.A. No.777!2011 was listed before the BIFR on the same date on which the meeting of the Asset Sale Committee was-scheduled be held. The BIFR found the application premature as no final decision had been takei by the Asset Sale Committee. ii. By an order dated 20.12.2011, the Asset Sale Committee declined to approve the bid of D.V. Exports and decided to retender the propertY. WP(C) NO. 265112014 -

¶12On 28.12.2011, NTC issued an adveisement for reaUCti0fl of the filed another application said propeiY whereupon D.V. ExpOS of the adVisemt. being M.A. No.807120 seeking stay Both the appliCatb0 were listed on 18.01.2012.

¶13In the meanwhile, NTC received an offer from MY. State ration Liited for the said propertY hjeh was InduStri Corpo much higher than the bid of respondent No.1.

¶14On 13.01.2012, Muskan Estate Limited which was the second ier auctiOfl increased its bid amount to highest offerer in the eal Whfte these applications were pending MIs Rs.79 croreS. Abhinandan Ispat Pvt; Ltd. filed WP(C) No.209912012m the MadhYa Pradesh High Court, whereupon the High Court issued notice and restrained NTC from f 1naliZiflg the sale. . In the n 18.01.2012, the BIFR set aside the advertisement meanwhile o On for retender and confirmed the bid in favour of DY. Exports.

19.03.2012, NTC filed an appeal against the ordr dated

18.01.2012 befOre the AAIFR being Appeal No.67I2012 along 012 By an order dated 23.04.2012, with M.A. No.15012 the page5°111 14/P(C) NO. 2651/2014 I - S MadhYa padesh High Court dismissed Writ Petition (C) No.2099i2012 with libertY to Abhiflandan Ispat vt. Ltd. being r appeal in accordae with the respondt No.2 to file a prope law. -' LP No.l67272I2Ol2 before 15; Abhiflafldan Ispat Pvt. Ltd. filed an S the Supreme Court which wa dismissed by an order sated Ofl 30.07.2012, Abhinand

03.07.2012, after which, an Ispat P. Authority hich Ltd. also filed an appeal before -the Appellate was Appeal No.172/2O12 Appellate Authority directed

¶16By an order dated 12.09.2012 the that Appeal No.67/2Ol2 of NTC be listed along with Appeal no.172/2012 of Abhinafldafl Ispat Pvt. Ltd. On 07.11.2013, Abhinand Ispat Pvt. Ltd, gav ran dertak1ng before the Appellate Authority to buy the propertY for an amount of Rs.90 • croreS. On 26.03 .2014, the Appellate Authority passed the impugned judgment dismissing the appeal. •

¶17The short question involved in this writ petitiofl is whether the e Ast Sale BIFR ought to have interfered with the order of th - • page6 01 11 WP(C) NO. 2651/20/4 • committee for rauCti0n and that to(), after advertisements for reauCti0fl were issued.

¶18There can be no dispute that a per the policy decision takei on

08.11.2011 by the Board of Directors of NTC, any reserve price for sale of assets once fixed, was to remain valid only fo six months. ffer in an auction sale, untU and unless

¶19It is well settled that an o the bidders in the auction accepted does not give any right to . .V. ExportS since acceptance No right had accrued to D was never ExportS. There being a long time gap, the communicated to D.V. Asset Sale Committee directed reauCt0n. even the BIFR did not proceed to accept the offer of

¶20IncidentallY, It set aside the advertisement for reauCtiofl but D.V. Exports. st prtie5 who had directed that fresh auction be held among already submitted their bids.

¶21When the properties of a public sector d ertaking are sold, it is in public interet that the same should be so4 at the highest possible price. It s reiterated at the costs of repetition that there Page 7ofl.l WP(C) NO, 265112014 was no concluded contract between D.V. Exp0 andT D. V. ExpoS had only submitted its bid atthe auction, acceptance of its bids had not been communicated to D. V. Exp01tS. d that the highest offerer does not have any

¶2It is well settle n e prop ntjl and unless there is a inherent right to be give the ertY en to the owner of the propertY ot to concluded contract. it is op hooseS. Moreover, it is not in public sell the propertY if it so c i: interest to direct confirm a sale in favour of an erer several withbut reyalidation of the properte5 years after the offer, .: n was pending the Sick Industrial

¶23While this writ petitio provisiofls) Repeal Act, 2003 was enforced Companies (Special suedin with effect from 1.12.2016 by a Notification is ant to the repeal, BIFR and AAIFR stand Novernb 2016-Pursu dissolved and all proceedings abate, f the Sick Industrial Companies (Special Provisions)

¶24Section 5

Repeal Act, 2003, however, provides as follows: "5. Saving - (1) The repeal by this Act of the repealed enactment shall not - WP(C) NO. 265112014 page801 II I V\-~

(a) affect any other enactment in which the repealed enactment has been applied incorporated or referred to; - - f the repealed

(b) affect the previouS operation o enactment or anything duly done or suffered thereunder; :--

(c) affect any right, privilege obligation or liability ccrued or incurred under the acquired, a repealed enactment;

(d) affect any order made. by the Board for sanction of •1 the schemes; aliditY, invaliditY, effect0r 0seqUeflCes

(e) affect the v ed, or any right, of anything already done or suffer title, obligation or liabili already acquired, accrued or incurred d1fl in respect or any remedy or procee thereof or any release or discharge of or from any debt, penaltY obligation, liabili, claim or demand, or any jdemflity already granted or the proof of any past act or thing; forfeiture or punishment naurre affect any penalty d any offence committed against the in respect of repealed enactflent, affect any jeStigatb0fl, legal such right proceethugs or remedy in respect of any privilege ob ligation, liabilitY, penaltY forfeitUre or WP(C) NO. 265112014 - Page 9 of Ii punishment as aforesaid, and any such jvestigatbon, legal proceeding or remedy may be instituted, continued or enforced, and any such priVileg forfeiture or punishmt may be imposed as if this • Act had not been passed; rule of law, or established

(g) affect any principle or jurisdiction form 0r course of pleadiflg practice or custom, privilege procedUre or exisiflg usage, restriction, exemption, office or appoifltment 0withstanding that the same respectiVely may have been in any manner affirmed or recognized or derived by, in, or from, the repealed enactiflent

(h) revive or restore any jurisdicti0n office, custom, • liability, right, title, privilege restricti01, exemption, or thing usage, practice procedure or other matter • not now existing or in force.

(2) • Save as otherwise provided in section 4 and in sub-section (1) of this section, the mention of paiicUlar matters in the said section and subsecti0n shall not be held to prejudice or affect the general application of section 6 of the General,c Act, 1897 10 of ( 1897), with regard tothe effect of repeal." • WP(C) NO 2651/2014 Page 10 of II

¶25In view of Section 5, the sanctioned scheme would continUe to operate as also the orders peiainiflg to the sanctioned schme that might have been passed before the repeal.

¶26The impugned order dated 18.1.2012 of BIFR setting aside the adveiSement, as also the impugned order dated 26.03.2014 of the AAIFR are both set aside. Should the sale no longer be iew of the present health of NTC and its necessary in v ed not at all be sold. Should any sale subsidiaries, the propertY ne operation be necessa it will be open in terms of the scheme, in

to the NTC to re advei5e the properties for sale.

¶27The writ petition is disposed of accordingly. INDIRA BANERJEE, J ANIL KUMAR CHAWLAq

April 031 2017/dr Page of WP(C) NO. 2651/2014 -

* IN THE HIGH COURT OF DELHI AT NEW DELHI. + W.P.(C) 2693/2014 and CM Nos. 5600/2014 (stay) and 5602/2014 MIS D.V. EXPORTS Petitioner Through: Mr. T.K. Ganju, Senior Advocate along with Mr. Souhabho Ghosh and Mr. Shrey Chathly, Advocates. versus IDBI AND ANR. Respondents Through: Mr. Sanjoy Ghose, Mr. Rhishabh Jetley and Ms. Pratistha Vij, Advocates for NTC Ltd. CORAM: HON'BLE MS. JUSTICE INDIRA BANERJEE HON'BLE MR. JUSTICE ANIL KUMAR CHAWLA