None v. NATIONAL TEXTILE CORPORATION LIMITED & ORS.

1. In this writ petition the petitioner. National Textile Corporation Ltd., hereinafter referred to as NTC,has challenged ajudgment * and order dated 26.03.2014 passed by the Appellate Authority for Industrial and Financial Reconstruction, hereinafter referred 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 inBIFRCaseNo.501/2008.

2. NTC and some ofits subsidiaries were declared sick under the Sick Industrial Companies (Special Provisions) Act, 1985, hereinafterreferred to asthe SICA. HiraMills,Ujjain(MP)was declared asickindustrialundertakingunderthe SICA. 3., By an order dated 01.04.2006, the BIFR permitted the subsidiaries ofNTC to be merged with NTC. On 04.09.2008,a modified rehabilitation scheme was,sanctioned by BIFR in respectofNTC andon 14.09.2008,an AssetSale Committee was constituted by the BIFR.

4. On 23.12.2009, BIFR passed an order extending the implementation ofthe 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 ( i price for sale ofassets,once fixed would remain valid only for six months.

5. Pursuant to a rehabilitation scheme sanctioned by the BIFR,,the NTC advertised auction ofits 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 ofthe said rehabilitation scheme. The reserve price for the said property was kept at Rs.40.90 crores and all applicants wereto make earnestmoney depositofRs.2.05 crores.

6. One M/s D.V. Exports, the respondent no.l offered Rs.76.51 crores. The offer ofM/s D.V.Exports which was almost double the reserve price,wasthe 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 ofreceipt ofintimation regarding acceptance ofbid,no such intimation was received. J

9. applicationbeforetheBIFR 2011 for directions ofi the

8. According to M/s D.V. Exports. D.V. Exports got bank guaranteesamountingtoRs.75croressanctionedfromtheBank ofBaroda,PunjabNationalBankandBankofIndia.. D.V.Exports did notreceiveany intimationofconfirmationof sale, allegedly inspite of reminders and requests. In the circumstances.D.V.Exportsfiled an n being M.A. No.777/2011 on 09.12 Assetsale Committeeto approvetrebidofD.V.Exports and also sou^t orders restraining NIC from creating ted party interestinrespectofthe propertyin

10. The said application,beingM.A.b' theBIFR onthesame date on whichthe meeting ofte Asset salecommitteewas"scheduledto|reheld. TheBIFRfoundthe application premature asnofinal AssetSale Committee.

1 M xTTP received an offer from Mn In the meanwhile, NTC receiv,„Limited for thesaid property'which was Industrial Corporation Limited x „uchhigherthanthebidofrespondentNo.l., ^..hestof.rer..eeart.r—hs.— rs79 crores. While these applications were p '. a ispatPvt Ltd.filed WP(C)No.2099/2012inthe Abhinandan Ispat rvu ^ the Hieh Court issued MadhyaPradeshHighcourt,whereuponthe 1 „0Xice and restrained HPCfiomfinalixing the sale, in, meanwhileon18.01.2012,theBIFRsetasidethe^ forretenderandconfirmedthebidinfavourofD.V.Expo s^ -, - 0+ the order dated 1903.2012, KTC filed an appea again ' oKP e'theAAlER being AppealNo.67/2012along 1801.2012 before the AAirix.,50/2012 By an order dated 23.04.2012,the with M.A. No.150/2012. y „„===• 2017:DHC:8090-DB. 'court dismissed Writ Petitiou (C) Madhya Pradesh Hrgh Court., libertv to Abhinandan Ispat ^0.2099/2012 wdh hberty n therespondentN0.2tofde aproper appe t tp.t Ltd filedanSLPNo.167272/2012before

15. AbhinandanIspa n a by an order dated.Court which was dismissed by the Supreme Court w,, pvt an m 2012 Abhinandan IspatP 03072012,after which,on 30.07.2012,,h fore the Appellate Authority'which Ltd. also filed an appeal before rrirdalTi[2].09.2012theAppellateAuthoritydirected rippealKo.67/2012ofKTCbelistedaiong 172/2012 of Abhinandan Ispat Pvt. Ltd. On:::dan,IspatPyt.Ltd.gaye..—..pel.ateAu.ori.tobuytheprope.for— On 26.03.2014, the Appellate, crores.

17. Theshortouestioninvolved in Sale BIPftoughtto have interfered with ^ that too after advertisements for committee for re-aucttom and that too, re-auction wereissued.,[3] TherecanhenodisputethatasperthepoUcydecisiontahenon 0ST[1].20iihytheBoardofDirectorsofNTC,anyreservepnce for saie ofassetsoncefixed,wasto remain valid onlyforstx months..c„p«d ">»»"" » h.^«-»D.V..1."-"t—- »D.V. V,™b.lns. «.l™»>'• AssetSaleCommittee directedreauctton. 20 incidentally,eventheBIFRdidnotproceedtoaccepttheofferof DV Exports. Itsetasidethe advertisementforreauctionbut directed that fiesh auction he held amongst parties who had alreadysubmittedtheirbids.

21 Whenthepropertiesofapublicsectorundertakingaresold,itis fo public interestthatthesmne should be sold atthe highest possibleprice. Itisreiteratedatthecostsofrepetition.thattoe "nV Exports and NTC. Dwas no concluded contractbetween n n, nmed its bid atthe auction,acceptance V Exportshad only submitted its ^PHsbldshadnotbeencommunicatedtoD.V.Exports. ^ 22 It is well settled thatthe highest offerer does not have any '.tterentrighttobegiventhepropertyuntilandunless.ereisa...acludedcontracttltisopentotheownerofthepropertynouo a sale m favour ofan offerer several interest to direct confirm a sale m.,earsaftertheoffer.withoutrevalidationoftheproperties..

23 While this writ petition was pending the Sick Indus companies(SpecialProvisions)d.epealAct,2003^wasenorce with effect from 01.12.2016 by a Notification issued in Hovember2016. pursuanttodierepeal,BIERandAAIPKStan dissolved andallproceedingsabate.

24. section5oftheSickIndustrialCompanies(SpecialProvisions RepealAct,2003,however,providesasfollows. c • m TherepealbythisActofthe "5. Saving-(U ^. repealedenactmentshallnot-,, effect any other enactntent in which the repealed:„nthasheenapplied,incorporatedorreferred 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; affectthevaUdity,invalidity,effectorconsequence ofanything already done orsuffered,or anyrtg^ n title,obligationorliabilityalreadyacquired,accrue or incurred or anyremedy or proceedinginrespec thereofor any release or discharge oforfrom an debt,penalty,obligation,liability,claimordemtm or any indemnity already granted,or dte proofof any pastactor-thing,. a, aflanypenalty,forfeitureorpunishmentmcurred in respect of any offence committed agams repealed enactment,affect any investigation le^ proceedingsorremedyinrespectofanysuchrigh privilege,obligation,liability,penalty,fo^-^ ·.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, practice~ 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 repealedenactment; (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 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." - ---====:::::. 2017:DHC:8090-DB. ~~ ·.L ----------~------------:..___r