M/S Muskan Infra State Ltd v. National Textile Corporation Ltd. & Ors

ORDER %

03.04.2017 In view of orderpassedin W.P. (C) No. 2651/2014,this writ petition is disposed of. -cL—Q ^ INDIRA BANERJEE, J i/ ANIL KUMAR CHAWLA, J APRIL 03, 2017 rs IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: February 14,2017 o/o Decidedon: April 03, 2017 + WP(C) 2651/2014 - NATIONAL TEXTILE CORPORATION LIMITED Petitioner Through; Mr. SandeepSethi,Sr. AdvocatewithMr. SanjoyGhose,Mi-. RhishabhJetleyand Ms. Pratistha Vij, Advocates. -.i: versus D.V. EXPORTS AND ORS. Respondents Through: Mr. SouhabhoGhoshand Mr. shrey Chathly, Advs. for R1. Mr. SanjibK. Mohanty,SeniorPanel Central Government Counsel for R-5. CORAM: p HON'BLEMS. JUSTICEINDIRABANERJEE HON'BLE MR. JUSTICE ANIL KUMAR CHAWLA JUDGMENT T INDIRA BANERJEE, J

¶1In this writ petitionthe petitioner.NationalTextileCorporation Ltd., hereinafterreferredto as NTC, has challengeda judgment ' and order dated 26.03.2014passed by the AppellateAuthority for Industrial and Financial Reconstruction,hereinafter referred V IVPrCJ NO. 2651/2014 Page I of 11 c r ' to as AAIFR, dismissing Appeal No.67/2012 filed by NTC, against an order dated 18.01.2012 passed by the Board for FinancialReconstruction(BIFR) in the applicationbeing M.A. No.777/2011andM.A.No.807/2011in BIFRCaseNo.501/2008.

¶2NTC and some of its subsidiarieswere declaredsick under the Sick Industrial Companies (Special Provisions) Act, 1985, hereinafterreferredto as the SICA. HiraMills,Ujjain(MP) was declaredasickindustrialundertakingunderthe SICA. 3, By an order dated 01.04.2006, the BIFR permitted the subsidiariesofNIC to be mergedwith NTC. On 04.09.2008,a ' modified rehabilitationscheme was sanctioned by BIFR in ^ respectofNTCandon 14.09.2008,anAssetSaleCommitteewas constituted by the BIFR.

¶4On

23.12.2009, BIFR passed an order extending the implementationofthe sanctionedrevivalschemetill 31.03.2011. Thereafter on 12.10.2010 guidelines were issued for sale of propertiesby the Asset Sale Committee. On 18.11.2011,the Board of Directorsof NTC took a policy decisionthat reserve PVPfCJ NO. 2651/2014 2of11 r price for sale of assets, once fixed would remainvalid only for six months.

¶5Pursuantto a rehabilitationscheme sanctionedby the BIFR, the NTC advertisedauctionofits propertyat 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 complianceofthe said rehabilitationscheme. The reserveprice for the said property was kept at Rs.40.90 crores and all applicantswereto make earnestmoneydepositofRs.2.05crores.

¶6One M/s D.V. Exports, the respondentno.l offered Rs.76.51 crores. The offerofM/s D.V. Exportswhichwas almostdouble the reserveprice,was the highestoffer.

¶7Even though as per terms and conditions of the tender documents,the successfulbidderhad to deposita bar&guarantee for the hill amount excludingthe earnestmoney deposit,within 15 days of receiptof intimationregardingacceptanceof bid, no such intimation was received. WP(C) NO. 2651/2014 s According to M/sD.V. Exports. D.V. Exports,sot bank guaranteesamountingto-Rs.75croressanctionedfrom the Bank ofBaroda,PtmjabNationalBankandBankofIndia.

¶9D.V. Exportsdid not receiveany intimationof confirmationo , sale, allegedly inspite of reminders^ and requests. In the circumstances,D.V.ExportsfiledanapplicationbeforetheBIFR being M.A. No.777/20n on 09.12.2011 for directionson the Asset sale Committeeto approvethe bid of D.V. Exportsand also sought orders restrainingNTC from creatingthird party interestIn respectofthe propertyin question. ,0. The saidapplication,beingM.A. No.777/2011was.listedbefore C • the BIFR on the same date on whichthe meetingof the Asset salecommitteewas scheduledto be held. The BIFRfoundthe applicationprematureas no finaldecisionhad beentakenby the , AssetSale Committee. j 90 12 2011 the Asset Sale Committee

¶11By an order dated 20.1Z./UiL, tViP hid of DV. Exports and decided to declined to approve the bid ot . retender the property. -1. _ • 7p(Qn1165''u20I4 ' Page4ofII a20n NTCissuedan advertisementforreauctionofthe ° ' D.V.ExportsfiledanotheraWlication ^ saidproperty,whereupon advertisement, being M.A. Ho.807/2011 seeking stay of BoththeapplieationswerelistedonlS.01.2012. ^ while NTC received an offer from M-P-1-:! Tn the meanwhile, ini . , " ^ , - Mnm-nertvwhich was ' « Tliriitedfor the said propeny IndustrialCorporationLimited inuchhigherthanthebidofrespondentNo.l. T• •+ which was the second »«" W«""" "" rMn the Hifth Court issued • "C » — * •" u TtTPRset asidethe advertisement 1o ai 9012 the BlrR meanwhileon 18.01.201 , ' On PorretenderandconfirmedthebidinfavourofD.V.Expo 19 03.2012, NTC-filed an appeal against the order ae U• Anneal No.67/2012along 18 01 2012 beforethe AAlFRbemgAppealN . 150/2012 By an order dated 23.04.2012,the . with M.A. No.150/2012. _1_"=======- ,, " Page5of11 WP(C) NO. 265I/20I4 > pdsh High court dismissed Writ Petitiort (O Madhya Pradesh >1. i^hertvto AbhinandanIspat islo 2099/2012with libertylo .nneal in aecotdancewith. , t iMo 2to file aproper appeal the respondentNo.2 - , c, pNo 167272/2012before , T._"tPvt Ltd. filed an SLP N• 15, AbhinandanIspat the Supreme Court which was dismisse - ,0 07 2012 AbhinandanIspatPvt. 03 07 2012. after which, on 30.07.2012, wasAppealN0.1^ , t Pvt Ltd on 07.11.2013, 172/2012 of Abhinandan Ispat P • , On 26.03.2014,.the Appellate crores. un . . l^pugnediudgmentdismissingftteappeal. —,=:======^~~ Page6ofII WP(C) 1^0. 2651/2014 r , .U ^ after advertisementsfor committeefor re-auctionand that too, after 4/^ re-auctionwereissued. Therecanhe no disputethatas perthepoUc.decisiontahenon 08--^ ^ C "ce. fixed was to remain valid only or si for sale of assets once tixeu, w " ii fnirectotsofNTC,any reserveprice

11.2011by the BoardofD months. iriswellsettledthatan offerin an auctionsale,untilan uness : HorighthadaccruedtoD.V.Exportssinceacceptancewasnever communicatedto D.V.Exports. Therebeingalongtimegp, AssetSaleCommitteedirectedreauction. 20 incidentally,eventheBIFRdidnotproceedto accepttheoffero directedthat fresh"auctionhe held amongst parties who had alreadysubmittedtheirbids. 21 Whenthepropertiesofapublicsectorundertakingare sold,it is • la public interestthat the same should be sold at the bluest - p"ssibleprice.Itisreiteratedat.ecostsofrep«« ======— . - Page7of 11 WP(C) NO. 2651/2014 H7 Ti V Exportsand NTC. D. was no concludedcontractbetweenD. • • ^ 'tc hid at the auction,acceptance V Exportshad only submitte , , It is opento theownerofthepropertynott concludedcontract It is open rtv if it so chooses. Moreover,it is not in pu sell the property,rt it s _ firm asale in favour of an offererseveral interestto direct confirma 2, write M. ».il !«"«" "" "• " •• r,«^ RepealAct, 2003 was enforced companies(SpecialProvisions)Repeal ni 17.2016 by a Notification issued m with effect from 01.12.201 y ai rtER and AAIFRStand November2016.Pursuantto therepe , dissolvedandall proceedingsabate.- ,4. section5ofthe SichIndustrialCompanies(SpecialProvisions RepealAct,2003,however,providesasfollows.

¶115Saving-(l) TherepealbythisActofthe repealedenactmentshallnot-_=========='~~'^^ Page8ofIJ ]VP(C) NO. 265I/20I4 ,, affect any other enactmentin which^therepealed enactmenthas beenapplied,incorporatedor re err

1.:::: enactment or anything duy to;

(b) thereunder; thereunder; ^ ^ c) •«" * 7—d «-p"" acquired, accrued or mcurr enactment; ' t^e Boardfor sanctionof

(d) affectany order made y the schemes; ^ consequences , t affectthe validity,invalidity,ette "i.,"d.»y"7, thereofor any releaseor dischargeof or fro y It,penalty,obligation,liability,claiinor dern^d^^ or any indemnity already granted, or tepr. anv n^'Stnet or thing? ^ , Itv forfeitureor punishmentincurred affectany penalty,toiteiiu f , • " ,he in respect of any offence committed aga. :;al!denactment,affect any investigation privilege,obligation,liability,penaty, r ====— Pcg^ 9of11 WP(C) NO. 2651/2014 "T forfeitureor punishmentmay be imposedas ifthis . Acthadnotbeenpassed; ,,tabUshed ,ffect any principleor rule of law, form or^courseof pleading,practiceor jurisdic10 , custom, privilege, nredure or existing usag , , e.emption, Office or ——gdrat.es^^^^^^^^^^ ribyTTrim,therepealedenactment; restore any jurisdiction,office, custom, h title privilege,restriction,exemption, liability,right,ti ,P thing usage, practice,procedureor other matt "otnowexistingorinfome^ ^

(2) Save as otherwiseprovi • fn nf this section,the menuuu r " Ilia— ======"^ Pog^ JO of J1 WP(C) NO. 2651/2014 r ,5 in view ofSect,on5. the sanctionedschetnewouidcontinueto . operate,as aiso the orderspertarningto the sanctionedscheme thatmighthavebeenpassedbeforetherepeal. 26 The impugnedorder dated 18.1.2012ofBIFRsettingasid advertisement,as also the impugnedorderdated26103.2014of ' the AAIFR are both set aside. Shouldthe sale no longer be • necessary in view of the present health of NTC and its subsidiaries,thepropertyneednotatallbe sold. Shouldanysale in termsofthe scheme,in operationbe necessaryitwillbe open totheNTCto re-advertisethepropertiesfor sale. 27 Thewritpetitionis disposedofaccordmglyi INDIRABANERJRE?J anil KUMARCHAWLA,J April 03, WP(C) NO. 2651/2014 Page11 of11 \

$-7 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 9997/2015 M/S MUSKAN INFRA STATE LTD. Petitioner Through: None versus NATIONAL TEXTILE CORPORATION LTD. & ORS. Respondents Through: Mr. Sanjoy Ghose, Mr. Rhishabh Jetley and Ms. Pratistha Vij, Advocates for NTC Ltd. Mr. Souhabho Ghosh and Mr. Shrey Chathly, Advocates for respondent No. 2. CORAM: HON'BLE MS. JUSTICE INDIRA BANERJEE HON'BLE MR. JUSTICE ANIL KUMAR CHAWLA