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of <h1>Court Validates Bid Process Under Securitisation Act, Emphasizes Compliance with Statutory Rules</h1> <h3>Akhilesh Spintex (P.) Ltd. Versus Union of India</h3> Akhilesh Spintex (P.) Ltd. Versus Union of India - [2006] 68 SCL 444 (BOM.) Issues:1. Bid acceptance process and fairness in decision-making.Analysis:The judgment pertains to a bid acceptance process for the sale of assets under the Securitisation Act, where the petitioners challenged the decision in favor of respondent No. 5. The petitioners contended that all qualified parties should have been allowed to participate in the negotiations to obtain the best price, as per the terms and conditions of the quotation. On the other hand, respondents argued that the conditions, including limiting negotiations to the highest bidders, were part of the accepted terms and conditions. Respondent No. 3 followed the procedure permitted by law, obtaining quotations and shortlisting the highest bidders for negotiations. The court found that respondent No. 3 acted within its rights, as the offer of respondent No. 5 matched that of the petitioners, and the decision was made to recover the debt by securing the best price through the sale of the property. The petition was rejected based on the fairness and legality of the decision-making process.The judgment highlighted the importance of adhering to the statutory rules framed under the Securitisation Act in conducting asset sales. Rule 8(5)(a) allows for obtaining quotations from similar secured assets, and rule 8(8) permits sales on terms settled between parties in writing. The court emphasized that the power to negotiate after initial offers and shortlist bidders was explicitly reserved in the terms and conditions accepted by the petitioners. Respondent No. 3's actions in shortlisting the highest bidders for negotiations were deemed lawful and aimed at recovering the debt by securing the best price. The decision-making process was found to be in accordance with the law and fair in ensuring the sale of the debtor's property.Additionally, the judgment addressed requests made regarding third-party interests in the property and the release of goods belonging to the petitioners. Respondent No. 5 was directed not to create third-party rights in the property for a specified period, and the release of goods belonging to the petitioners was assured upon application to respondent No. 3. These ancillary matters were resolved to ensure fairness and protection of rights, despite the main petition being rejected based on the legality and fairness of the bid acceptance process.
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