M/S Parashwa Veer Builders and Developers Pvt. Ltd v. National Textile Corporation Limited & Ors

ORDER %

03.04.2017 In view of order passed in W.P. (C) No. 2651/2014, this writ petition is disposed of. INDIRA BANERJEE, J i/ ANIL KUMAR CHAWLA, J APRIL 03, IQlUrs i: f/ IN THE HIGH COURT OF DELHI AT NEW DELHI •.i: 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 Mr. shrey - Chathly, AdVs. for R1. - 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 r Page I of 11 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 andM.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.

3., By 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 took a policy decision that reserve WP(C)NO.265!/20l4 ( 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 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 crores. The offer of M/s D.V. Exports which was almost double the reserve price, was the highest offer.

¶7. Even though as per terms and conditions of the tender documents, the successful bidder had to deposit a bai^ 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. WP(C) NO. 2651/2014 J

¶9application before the BIFR 2011 for directions ofi the

¶8According to M/s D.V. Exports. D.V. Exports got bank guarantees amounting to Rs.75 crores sanctioned from the Bank ofBaroda, Punjab National Bank and Bank of India. . D.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 n being M.A. No.777/2011 on 09.12 Asset sale Committee to approve t re bid of D.V. Exports and also sou^t orders restraining NIC from creating ted party interest in respect of the property in

¶10The said application, being M.A. b' the BIFR on the same date on which the meeting of te Asset sale committee was"scheduled to |re held. The BIFR found the application premature as no final Asset Sale Committee. U. By an order dated 20.12.20u[ the Asset Sale Committee declined to approve the bid of question. O.777/2011 was listed before decision had been taken by the D.V. Exports and decided to retender the property. I4^P(C) NO. 2651/2014 jPage 4 of II .e.fo"eauc.o^ D V Exports filed another application said property, whereupon • • being M.A.No.807/2011 seeking stay_ of the BoththeapplicationswerelistedonlS.01.2012. 1 M xTTP received an offer from M-n In the meanwhile, NTC receiv , " Limited for the said property'which was Industrial Corporation Limited x "uchhigherthanthebidofrespondentNo.l. , ^ ..hestof.rer..eeart.r —hs.— rs79 crores. While these applications were p '. a ispat Pvt Ltd. filed WP(C) No.2099/2012 in the Abhinandan Ispat rvu ^ the Hieh Court issued Madhya Pradesh High court, whereupon the "0Xice and restrained HPCfiomfinalixing the sale, in, meanwhile on 18.01.2012, the BIFR set aside the ^ for retender and confirmed the bid in favour of D.V. Expo s^ - , - 0+ the order dated 19 03.2012, KTC filed an appea again ' oKP e'theAAlER being Appeal No.67/2012 along 18 01.2012 before the AAirix . ,50/2012 By an order dated 23.04.2012, the with M.A. No.150/2012. y ""===• Page 5 of II WP(C)NO.265I/20I4 ' _ . 'court dismissed Writ Petitiou (C) Madhya Pradesh Hrgh Court ., libertv to Abhinandan Ispat ^0.2099/2012 wdh hberty n the respondent N0.2 to fde a proper appe t tp.t Ltd filed an SLPNo.167272/2012 before

¶15Abhinandan Ispa n a by an order dated . Court which was dismissed by the Supreme Court w , , pvt an m 2012 Abhinandan Ispat P 03 07 2012, after which, on 30.07.2012, , h fore the Appellate Authority 'which Ltd. also filed an appeal before r rirdalTi2.09.2012 the Appellate Authority directed rippeal Ko.67/2012 of KTC be listed aiong 172/2012 of Abhinandan Ispat Pvt. Ltd. On :::dan,IspatPyt.Ltd.gaye..— ..pel.ateAu.ori.tobuytheprope.for— On 26.03.2014, the Appellate , crores.

¶17The short ouestion involved in Sale BIPft ought to have interfered with Pflgs 6 of WP(Q NO. 2651/2014 ^ that too after advertisements for committee for re-aucttom and that too, re-auction were issued. ,3 There can he no dispute that as per the poUcy decision tahen on 0ST1.20iihy the BoardofDirectorsofNTC,any reserve pnce for saie of assets once fixed, was to remain valid only for stx months. .c"p«d "> » » "" » h.^ «- » D.V. .1." -"t—- » D.V. V,™ b.lns . «.l™ »>'• Asset Sale Committee directed reauctton. 20 incidentally, even the BIFR did not proceed to accept the offer of DV Exports. It set aside the advertisement for reauction but directed that fiesh auction he held amongst parties who had already submitted their bids. 21 When the properties of a public sector undertaking are sold, it is fo public interest that the smne should be sold at the highest possible price. It is reiterated at the costs of repetition .that toe (VP(CJ NO. 2651/2014 "nV Exports and NTC. D-was no concluded contract between n n , nmed its bid at the auction, acceptance V Exports had only submitted its ^PHsbldshadnotbeencommunicatedtoD.V.Exports. ^ 22 It is well settled that the highest offerer does not have any ' .tterentrightto be giventheproperty until andunless.ereisa . ..acludedcontracttltisopentotheownerofthepropertynouo a sale m favour of an offerer several interest to direct confirm a sale m . ,earsaftertheoffer.withoutrevalidationoftheproperties.. 23 While this writ petition was pending the Sick Indus companies (Special Provisions)d.epeal Act, 2003^was en orce with effect from 01.12.2016 by a Notification issued in Hovember 2016. pursuant to die repeal, BIER and AAIPK Stan dissolved and all proceedings abate.

¶24section 5 of the Sick Industrial Companies (Special Provisions Repeal Act, 2003, however, provides as follows. c • m The repeal by this Act of the "5. Saving-(U ^ . repealed enactment shall not- =============="^""^ WP(C) WO. 2651/2014 , , effect any other enactntent in which the repealed :"nt has heen applied, incorporated or referred let the previous operation of the repealed

(b) ^ or suffered enactment or anything

(c)

(d)

(e) thereunder; _ ii^unuv rigly-pPI'SPPP" PP enactment; ^ Vtxr the Board for sanction ot affect any order made by the Boar the schemes; affect the vaUdity, invalidity, effect or consequence of anything already done or suffered, or any rtg^ n title, obligation or liability already acquired, accrue or incurred or any remedy or proceeding in respec thereof or any release or discharge of or from an debt, penalty, obligation, liability, claim or demtm or any indemnity already granted, or dte proof of any past act or-thing, . a , afl any penalty, forfeiture or punishment mcurred in respect of any offence committed agams repealed enactment, affect any investigation le^ proceedings or remedy in respect of any such righ privilege, obligation, liability, penalty, fo^-^ WP(C) NO. 265I/20I4 ·.1.

(g) punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such privilege, forfeiture or punishment may be imposed as if this Act had not been passed; affect any principle or rule of law, or established jurisdiction, form or course of pleading, or procedure, or existing usage, custom, privilege, restriction, exemption, office or appointment, notwithstanding that the same respectively may have been m any manner affirmed or recognized or derived by, in, or fr_om, the repealed enactment;

(h) revive or restore any jurisdictiOn, office, Custom, liability, right, title, privilege, restriction, exemption, usage, practice, procedure or other matter or thing r not now existing or in force. ·

(2) Save as otherwise provided in section 4 and in sub- .l . .r ·.1. section ( 1) of this section, the mention of particular matters in the said section and sub-section shall not be held to prejudice or affect the general application· of section 6 of the General Clauses Act, 1897 (10 of 1897), with regard to the effect of repeal." - WP(C) NO. 265112014 ---====::::: . PageiOofll . ·.L r

¶25·In view of Section 5, the sanctioned scheme would continue to operate, as also the orders pertaining to the sanctioned scheme r that might have been passed before the repeal. /!j

¶26The impugned order dated 18.1.2012 of BIFR setting aside. the advertisement, as also the impugned order dated 26.03.20t4 of - 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 ewill be open to the NTC to re-advertise. the properties for sale.

¶27The writ petition is disposed of accordingly . • JNDIRA BANERJEE, J . .[ ANIL KUMAR CHAWLA, J April 03, 2017/dr ·1 -----==--=--==-== . . - WP(C) NO. 265112014 -.r

^ 'sj $-8 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 9998/2015 M/S PARASHWA VEER BUILDERRS AND DEVELOPERS PVT. LTD. Petitioner Through: None versus NATIONAL TEXTILE CORPORATION LIMITED & 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