Jpj Exim Pvt. Ltd v. National Textile Corporation Limited and Ors

ORDER

03.04.2017 In view of order passed in W.P. (C) No. 2651/2014, this writ petition is disposed of. APRIL 03,2017 rs INDIRA BANERJEE, J 1/ ANIL KUMAR CHAWLA, J nyj .1: •.i; I * IN THE HIGH COURT OF DELHI AT NEW DELHI "

Reserved on: February 14, 2017 o/q 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. versus - D.V. EXPORTS AND ORS. - Respondents Through: Mr. Souhabho Ghosh and Mi", shrey Chathly, Advs. for Rl. 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 •.!; to as AAIFR, dismissing Appeal No.67/2012 filed by NIC, against an order dated 18.01.2012 passed by the.Board for Financial Reconstruction (BIFR) in the application being M.A. , No.777/2011 andM.A.No.807/2011 inBIFRCaseNo.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 I 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.

4.. On 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 took a policy decision that reserve WP(C) NO. 2651/2014 - ■i: 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. NIC 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 crores and all applicants were to make earnest money deposit of Rs.2.05 crores.

¶6One M/s D.V. Exports, the respondent no.l offered Rs.76.51 t crores. The offer of M/s D.V. Exports which was almost double the reserve price, was the highest offer.

¶7Even 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. mo NO. 2651/2014 ' -■.i; 8 According to M/s D.V. Exports, D.V. Exports got bank guarantees amounting to Rs.75 crores sanctioned from the of Baroda, Punjab National Bank and Bank of India.

¶9D.V. Exports did not receive any intimation of confirmation of sale, allegedly inspite of reminders and requests. In, the circumstances. D.V. Exports filed an application before the BIER being M.A. No.777/20n on 09.12.2011 for directions on the Asset sale Committee to approve the bid of D.V. Exports and also sou^t orders restraining NIC from creating third party interest in respect of the property in question. ,0. Thesaidapplication.beingM.A.No.777/2011 was listed before the BIFR on the same date on which the meeting of the Asset ^ sale committee was scheduled to be hpld. The BIER found the application premature as no final decision had been takeii by the Asset Sale Committee. j.a on 122011 the Asset Sale Committee

¶11By an order dated 20.12.2U11. me .1,^ uin of D V Exports and decided to declined to approve the bid ot U.v. c P retender the property. D V Exports filed another appUcation said property, whereupon D.V. Expo , ,eln, M.A. Ho.S07/20n seehln, stay ot the ad— • " NTC received an offer from M-n In the meanwhile, N ^ . - 1 rtrnnertv which was .• T imited for the said propeny Industrial Corporation Limited n.uchhigherthanthebidofrespondentNo.1. I on 13.01.2012, Mushan Estate Limited which was the secon -—"7" n "." Court whereupon the High Court issued Madhya Pradesh Hi^ Court, wn • H NTC from finalizing the sale, notice and restrained NTC trom 18 01 2012 the BIFR set aside the advertisemen meanwhile on 18.01.2012, Exports On forretenderandconfirmedthebidinfavouro . - • + mp order dated 19 03.2012, NTC filed an appeal again , u I the AAIEE being Appeal No.67/2012 along 18 01 2012 before the AAi 1^,2012 By an order dated 23.04.2012, the with M.A. No.150/2012. By I PVPfC) NO. 265I/20I4 . "■ h Court dismissed Writ Petition (C) Madhya Pradesh Hig ^ ^ , .a being ., lihetty to Abhinandan Ispat P No.2099/2012 with liberty , with t No 2 to file a proper appeal in acoor an the respondent No.2 to i r a f, ^ nn SLP No.167272/2012 before

¶15Abhinandan Ispat pvt. Ltd. le . _ ",der dated Supreme Court which was dismisse y ,0 07 2012 Abhinandan Ispat Pvt. n, 07 2012 after which, on 30.07.20U, "" y •• nr.. HlCl. a-U + Anneal No.67/20122 Oi that Appeal a T td. On 07.11.2013, 172/2012 of Abhinandan Ispat ::i........ - - -— " Tl. *.« «"«»» " S.I. ____^_=:=:=:=i===~~^ ' Pdg^ 6 Of 1 f ''wP(C) NO. 2651/2014 J +v,o+ +nn after advertisements for committee for re-auction and that too. after re-auction were issued. There can he no dispute that as per the poiicy decision tahen on

08.ii.20fih, the Board of Directors of KTC, any reserve pr.ce for sale of assets once fixed, was to remain valid only for s.x months. well settled that an offer in an auction sale, until and unless • ut tr. the bidders, in the auction, accepted does not give any nght to the a to r> V Exports since acceptance was nev No right had accrued to D.V. Expon • a , n V Exports, There being a long time gap, the communicated to D.V. Expons. Asset Sale Committee directed reauction. .Up WFR did not proceed to accept the offer of 20 Incidentally, even the BIER dian P . D V Exports. It set aside the advertisement for reauct.on hut already submitted their bids. . f sector undertaking are sold. It IS 21 When the properties of a public sector ,"aaibleprice. Itisreiteratedatthecostsofre.ti.nthatthere ========= _ Page 7 of IJ WP(C)h!0. 2651/2014 ..no—d—.>,etweenD.V.Exponsan.NTC.D. V, Exports had only submitted its bid at Ae auctton, acceptance of its bids had not been communicated to D. V. Exports. "t right to be given the property until and unless there ts a oonciuded contract, his opentotheownerofthepropenynotto e,rtv if it so chooses. Moreover, it is not m pu ic sell the property, it n so , 23 While this writ petition was pending the Sick Industr . . vn^oeal Act 2003 was enforced Companies (Special Provisions) Repeal A , ..rh effect ffom 01.12.2016 by-a Notification issued m dissolved and all proceedings abate.

¶24section 5 of the Sick Industrial Companies (Special Provisions Repeal Act, 2003, however, provides as follows. (\\ The repeal by this Act of the "5. Saving-(U ^ repealed enactment shall not-PVP(C) NO. 2651/2014 Page 8 of II "-"1

(a) attect any incorporated or referred enactment has been-appUed,mcorp r the previous' operation of the repealed

(b) affect the prev enactment or anydnng duly done thereundei, , obligation or liability affect any ^ J acquired, accrued or incurrea

(C) enactmen , jp uv the Board for sanction of affect any order made by Itrvalidity. invaliay, effeetor consequences of anything already done or suffered, or any , , title obligation or liability already acquired, accru ^ or incurred or any remedy or.proceeding in respect thereof or any release or discharge of or from ^y debt, penalty, obligation, liability, claim or dem» . n, any indemnity already granted, or t e pro anv past act or thing, _ affect any penalty, forfeiture or ' in respect of any offence committed ag tepealed enactment, affect any investigation eg proceedings or remedy in respect of ^ privilege, obligation, liability, penalty, forf^^

(d)

(e)

(f) h:p WP(C) NO. 2651/2014 Page 9 of II (&) I M .nfl anv such investigation, punistaent as aforesaid, and any , legal proceeding or remedy y . _ ILL« forfeiture or punishment may be imposed as Act had not been passed; ^^^.p.^ed affect any prineiple or rule of law, ,nrisdiction, form or course of pleadm.P-0 nrocedure. or existing usage, custom, pnvdeg P :■ office or appointment, restriction, exemption, office ^ notwithstanding that the same respectively may h len in any manner affirmed or recognized derived by, in, or from, the repealed en^tmen^ .t revive or restore .ny jurisdiction; office, custom, liability right, title, privilege, restriction, exempfion, CVlice, procedure or o.er matter or tlnng not now existing or in force^ ^

(2) Save as otherwise provi e ^ ,• " rn of this section, the menuui beheldtoprj iROT'dOof "'"I"' Page 10 of II WPfC) NO. 265I/20I4 ^ 25 In view of Section 5, tte sanctioned scheme would continue to opetate. as also the otdets pertaining to the sanctioned scheme that might have been passed before the repeal. - f J , a 1R 1 M12 of BIFR setting aside the

¶26The impugned order dated 18.1.20U 01 D Icr, the imnugned order dated 26.03.2014 of advertisement, as also the impugnc the AAIFR are both set aside. Should.the sale no longer be . necessary in view of the present health of NTC and its subsidiaries, the property need not at all be sold. Should any sale in terms of the scheme, in operation be necessary it will be open to the NTC to re-advertise the properties for sale.

¶27The writ petition is disposed of accordingly. INDIRA BANERJER' J -r anil KUMAR CHAWLA, J April 03,2017/dr M^P(C) NO. 2651/2014

$-4 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2670/2014 and CM No. 5565/2014 (stay) JPJ EXIM PVT. LTD Petitioner Through; Mr. Rahul Sharma, Advocate, versus NATIONAL TEXTILE CORPORATION LIMITED AND ORS. Respondents Through: Mr. Sanjoy Ghose, Mr. Rhishabh Jetley and Ms. Pratistha, Advocates forNTCLtd. Mr. Souhabho Ghosh and Mr. Shrey Chathly, Advocates for respondent No. 2. Mr. RahuL Sharma and Mr. Akashay Gupta, Advocates. CORAM: HON'BLE MS. JUSTICE INDIRA BANERJEE HON'BLE MR. JUSTICE ANIL KUMAR CHAWLA %