w w w . L a w y e r S e r v i c e s . i n



National Steel and Agro Industries Limited v/s Industries Finance Corporation of India Limited


Company & Directors' Information:- NATIONAL STEEL AND AGRO INDUSTRIES LIMITED [Active] CIN = L27100MH1985PLC140379

Company & Directors' Information:- NATIONAL STEEL AND AGRO INDUSTRIES LIMITED [Not available for efiling] CIN = U27320MP1985PLC002716

Company & Directors' Information:- P N B FINANCE AND INDUSTRIES LIMITED [Active] CIN = L65929DL1947PLC001240

Company & Directors' Information:- G. R. INDUSTRIES AND FINANCE LTD [Active] CIN = L25209WB1987PLC111041

Company & Directors' Information:- J J AGRO FINANCE PVT LTD [Active] CIN = U01403WB1988PTC045367

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- NATIONAL STEEL CORPORATION LTD [Strike Off] CIN = U27100WB1942PLC020862

Company & Directors' Information:- J V H AGRO FINANCE LIMITED [Strike Off] CIN = U65910DL1996PLC079951

Company & Directors' Information:- THE NATIONAL FINANCE CORPORATION LIMITED [Dissolved] CIN = U99999MH1941PTC003351

Company & Directors' Information:- THE NATIONAL FINANCE OF INDIA LIMITED [Strike Off] CIN = U65990DL1901PLC000648

    Misc. Appeal No. 73 of 2003, In M.A. No. 21 of 2003

    Decided On, 30 June 2004

    At, Debt Recovery Appellate Tribunal At Delhi

    By, K. S. KUMARAN (CHAIRPERSON)

    G.L. Rawal, Kuljeet Rawal, K.K. Sharma, K.N. Balagopal



Judgment Text


The Judgment was delivered by : K. S. KUMARAN (CHAIRPERSON)

1. This appeal has been preferred against the order dated 4th June, 2003 passed by the learned Presiding Officer of the Debts Recovery Tribunal-I, Delhi (hereinafter referred to as 'the DRT') in Miscellaneous Appeal 21/2003.

2. By order dated 4th June, 2003 passed in Miscellaneous Appeal 21/2003, preferred by the appellant herein, the Presiding Officer of the DRT set aside the sale in favour of the respondent No. 4 herein, and while doing so the learned Presiding Officer of the DRT also directed that the property be re-auctioned, and that the sum of Rs. 5.85 crores deposited by the appellant should be retained by the Recovery Officer till the property is sold in re-auction.

3. The appellant in this appeal is aggrieved only with that portion of the order whereby the learned Presiding Officer of the DRT directed that the sum of Rs. 5.85 crores deposited by the appellant herein before the Recovery Officer shall be retained by the Recovery Officer, and that after the auction sale the Recovery Officer will be free to order refund.

4. The defendant No. 1 has filed a suitable reply by way of counter affidavit opposing this appeal. But, the respondent No. 4 did not file any reply to this appeal.

5. I have heard the counsel for both the sides and perused the records.

6. The facts, which are essential for the consideration and decision of this appeal, are as follows :

In pursuance of the recovery certificate issued against the certificate-debtors for the recovery of money due to the respondents-financial institutions, the Recovery Officer commenced the execution proceedings against the certificate-debtors, and sold the property of the certificate-debtors. The respondent No. 4 herein purchased the said property in the execution proceedings for a sum of Rs. .4.95 crores. The appellant herein filed an objection petition before the Recovery Officer for setting aside the sale in favour of the respondent No. 4 herein urging among other things that to would be against public interest if the bid of Rs. 4.95 crores is accepted, and that it (the appellant) is making the bid for Rs. 5.85 crores. To show its (appellant's) bona fides, it also deposited a sum of Rs. 5.85 crores. The Recovery Officer dismissed the objection petition filed by the appellant by his order dated 17th April, 2003, and directed the refund of the amount to the appellant herein.

7. But, the appellant herein filed the Miscellaneous Appeal 21/ 2003 before the DRT, and the learned Presiding Officer of the DRT passed the above said Order.

8. As pointed out already, the appellant is aggrieved by that part of the order which directs that the amount shall be retained by the Recovery Officer with a further direction that the Recovery Officer will be free to refund it after the sale of the property. The learned counsel for the appellant contends that there was no justification at all for ordering the retention of this sum of Rs. 5.85 crores, and if at all, a sum of Rs. 10 lacs or 15 lacs could have been ordered to be retained. He even stated that at the worst the DRT could have ordered the retention of the difference between the price for which the respondent No. 4 herein had purchased the property and the amount deposited by the appellant, i.e., the difference between Rs. 4.95 crores and Rs. 5.85 crores.

9. But, the learned counsel for the respondents-institutions contends that the Recovery Officer did not direct the appellant to deposit the money, that the appellant, on its own, voluntarily deposited the same. He also contends that there could be collusion between the appellant and the respondent No. 4 herein, and that though the appellant offered to purchase the property at Rs. 5.85 crores, it may not even have taken part in the bid during the re-auction ordered to be held by the learned Presiding Officer of the DRT, or deposit the money after taking part in the auction proceedings. Therefore, he contends that the amount cannot and should not be refunded.

10. The learned counsel for the respondent No. 4 herein stated that the respondent No. 4 has no objection for the refund of the amount to the appellant.

11. I have considered the rival contentions, and perused the records,

12. By a separate order passed today in Miscellaneous Appeal 69/2003, I have set aside the order dated 4th June, 2003 passed by the learned Presiding Officer of the DRT, by which the learned Presiding Officer of the DRT had set aside the sale in favour of the respondent No. 4 herein, and had also ordered re-auction of the property by the Recovery Officer. I have also remanded the matter back to the Recovery Officer for further consideration, and fresh disposal in accordance with law and in the light of the observations contained in the order passed in Miscellaneous Appeal 69/2003.

13. The appellant had not taken part in the auction proceedings, but, still it had prayed for setting aside the sale in favour of the respondent No. 4 on the ground that there was no proper publication of the proclamation of sale either in open auction or by inviting sealed tenders. The appellant further urged that it, therefore, could not take part in the proceedings, and had been deprived of the opportunity to purchase the property. The appellant also urged that there was material irregularity in the publication and conducting the sale. Claiming to be a person aggrieved by the sale and to be entitled to question the sale in favour of the respondent No. 4 herein, the appellant herein volunteered to purchase the property at Rs. 5.85 crores, and also deposited the money with the Recovery Officer.

14. The learned Presiding Officer of the DRT accepted the contention of the appellant herein, and set aside the sale. He was of the view that this property should have been sold in open auction in order to get the best price. The learned Presiding Officer of the DRT took notice of the fact that the appellant had proposed to purchase the property at Rs. 5.85 crores. It is in these circumstances, while setting aside the sale, the learned Presiding Officer of the DRT directed that the sum of Rs. 5.85 crores deposited by the appellant herein be retained by the Recovery Officer, and that this amount should be treated as reserve price for the re-auction. It is seen that the appellant had not only expressed its willingness to purchase the property for Rs. 5.85 crores and had on his own deposited the amount with the Recovery Officer, but also prayed to confirm the sale in its favour by accepting its offer. Though, the learned Presiding Officer did not pass any such order, he directed that this amount for which the appellant had expressed his willingness to purchase the property be not only retained by the Recovery Officer, but it should also be the reserve price.

15. Taking into consideration these factors in the light of the order passed by me today in Miscellaneous Appeal 69/2003, whereby I have set aside the order of the learned Presiding Officer of the DRT, and remanded the matter back to the Recovery Officer for further consideration and fresh disposal, I am of the view that the amount deposited by the appellant herein cannot be refunded to the appellant at this stage, but, has to be retained till the Recovery Officer passes appropriate orders on the objection petition filed by the appellant herein to set aside the sale. The learned Presiding Officer of the DRT had set aside the sale by taking note of the fact, among other things, that the appellant herein was prepared to purchase the property for Rs. 5.85 crores. That is why he had directed the retention of the amount deposited by the appellant since the appellant himself was prepared to purchase the property for the sum of Rs. 5.85 crores. Therefore, in my view, whether the amount should be refunded of the appellant or not will have to be decided by the Recovery Officer when he disposes off the objection petition filed by the appellant herein for setting aside the sale, in pursuance of the order of remand by this Tribunal. Till then, the money has to be retained by the Recovery Officer.

16. In view of what I have pointed out above, the appeal has to fail. Accordingly, the appeal is dismissed with the above said observations. The order passed in Miscellaneous Appeal 69/2003 be attached, and shall form part of this order.

17. Copy of this order be furnished to the appellant, and respondent Nos. 1 to 4 and also be forwarded to the Recovery Officer concerned.