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M/s. Chaudhary & Sons (Forgings) P. Ltd. v/s Asset Sales Committee & Others

    W.P.(C) 8540 of 2009

    Decided On, 27 April 2009

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE MADAN B. LOKUR & THE HONOURABLE MR. JUSTICE SIDDHARTH MRIDUL

    For the Petitioner: Rajeeve Mehra, Sr. Adv. with Kunal Sinha and Sumeher Bajaj, Advocates. For the Respondents: R1 Geeta Sharma, R2 Maneesha Dhir and Preeti Dalal, Advocate, R5 Chetan Sharma, Sr. Adv. with Sanjay S. Chhabra, Advocates.



Judgment Text

Madan B. Lokur, J (Oral):


The Petitioner is aggrieved by an order passed by the Asset Sale Committee accepting the bid of Respondent No.5 pursuant to a tender for the sale of Jhalawar assets of M/s J.K. Synthetics Ltd.


2. It is mentioned in the tender document in paragraph 1.2(f) that the minimum reserve price is fixed by the Asset Sale Committee is Rs.32.00 crores plus taxes as applicable.


3. Paragraph 3.5 of the tender document pertains to participation in open bidding and paragraph 3.6 pertains to acceptance of tenders. Learned counsel for the Petitioner relies on paragraph 3.6(b) and 3.6(c) which reads as follows:


?3.6 Acceptance of Tenders:


(a) xxxxxxx


?(b) As per the directives of Hon?ble AAIFR, ASC has a right to dispose off the Jhalawar Assets without referring to Hon?ble AAIFR/BIFR on receipt of the bid for higher than the Minimum Reserve Price as stated here in above. However, ASC is not bound to accept the same. ASC shall have discretion to accept or reject any bid without assigning any reason.


(c) The bids if any received for lower amount than the Minimum Reserve Price but found suitable by ASC shall be subject to confirmation by BIFR/AAIFR and such acceptance by ASC shall be communicated to the concerned Tenderer in writing. However, the sale shall be completed only after getting approval of BIFR/AAIFR.?


4. It is stated by learned counsel for the Petitioner that though the reserve price is Rs.32 crores plus applicable taxes, the Petitioner gave a bid for Rs.24,01,00,000/- after tendering the earnest money. Since the bid of the Petitioner was below the reserve price it appears that the Asset Sale Committee did not permit the Petitioner to further participate in the bidding process.


5. Thereafter the remaining bidders, all of whom gave a bid above the reserve price had interse bidding and the highest bid was given by Respondent No.5 of Rs.36.76 crores.


6. Learned counsel for the Petitioner today says that his client is prepared to bid even higher than the highest bid amount and, therefore, the entire bidding process be re-opened.


7. On a reading of paragraph 3.6 of the bid document it is clear that three situations can arise:


(i) Where all the bidders bid above the minimum reserve price: Then the Asset Sale Committee has a right to dispose of the assets without further reference to the Board of Industrial and Financial Reconstruction.


(ii) Where some of the bids are above the minimum reserve price and some are below the minimum reserve price: The Asset Sale Committee is entitled to reject any of the bids made.


(iii) Where all the bids are below the minimum reserve price:


Then the Asset Sale Committee may accept the bids for a lower amount but this will be subject to the approval of the Board of Industrial and Financial Reconstruction.


8. As can be seen from the above, the Petitioner?s case falls in the second category since some bids were above the minimum reserve price and some below. In view of this, the Asset Sale Committee rejected those bids that were below the minimum reserve price and the bidders who had bid above the minimum reserve price were al

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lowed to carry out inter se bidding. 9. We do not see any error in the view taken by the Asset Sale Committee in rejecting the bid of the Petitioner since the Petitioner falls within the second category for acceptance of tenders as per paragraph 3.6(b) and 3.6(c) of the tender document. 10. There is no merit in the writ petition. Dismissed.
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