Court rejects Jet Airways' Rs. 206 crore offer for property, grants Kotak Mahindra 8 weeks for settlement.

The Court rejected Jet Airways' offer of Rs. 206 crores for the suit property. Kotak Mahendra was granted 8 weeks to settle all debenture holders and creditors as per the Bank of Baroda arrangement. The Court Receiver was directed to halt actions for 8 weeks. If claims remained unsettled after this period, beneficiary banks would become party defendants, and a new valuation and reserve price would be set. Interested parties could bid post-reserve price fixation. All applications and the Court Receiver's report were resolved, with a two-week stay on the order.

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Issues Involved:
1. Redemption of debentures by Apple Finance Limited (AFL).
2. Appointment and actions of the Court Receiver.
3. Offers received for the sale of the suit property.
4. Private negotiations between AFL and Kotak Mahendra for One Time Settlement (OTS).
5. Misrepresentation claims by Dena Bank.
6. Claims and applications by other creditors and debenture holders.
7. Public interest and market value considerations.

Detailed Analysis:

1. Redemption of Debentures by AFL:
The suit was filed by Canara Bank as Debenture Trustee for amounts due on 7500-14% Secured Redeemable Rated Non-Convertible Debentures issued by AFL, amounting to Rs. 75 crores. AFL mortgaged its immovable property to secure these debentures but failed to redeem them, leading to the lawsuit.

2. Appointment and Actions of the Court Receiver:
The Court Receiver was appointed to sell the suit property due to AFL's failure to redeem the debentures. Several offers were received, with the highest being Rs. 206 crores from Jet Airways. However, the Court noted that no binding contract existed until the sale was confirmed by the Court.

3. Offers Received for the Sale of the Suit Property:
Offers of Rs. 225 crores and Rs. 235 crores were received from Financial Technologies India Limited and Parasvnath Developers Limited, respectively. The Court emphasized that the reserve price for the property was Rs. 250 crores, and offers below this price were not acceptable.

4. Private Negotiations between AFL and Kotak Mahendra for OTS:
AFL entered into negotiations with Kotak Mahendra for the revival and rehabilitation of AFL through an OTS to repay the debenture holders. Kotak applied to stay the sale of the suit property, arguing that the parties agreed to allow Kotak to take over AFL's assets and properties to pay off the debenture holders.

5. Misrepresentation Claims by Dena Bank:
Dena Bank claimed misrepresentation, arguing they were induced to accept an OTS based on false representations that other debenture holders were similarly settling their claims. They sought to avoid the agreement under section 18 of the Indian Contract Act, claiming they lost significant amounts due to this misrepresentation.

6. Claims and Applications by Other Creditors and Debenture Holders:
Various applications were made by other creditors and debenture holders, including United Bank of India, ICICI Bank, SICOM Ltd., and Apple Credit Corporation Ltd. (ACCL), seeking protection of their interests and payment of their claims.

7. Public Interest and Market Value Considerations:
The Court emphasized the need to protect the interests of all creditors and ensure the property was sold at a reasonable price. The Court noted that the property's market value was significantly higher than the offers received, with AFL claiming the property was worth Rs. 600 crores.

Court's Judgment:
1. The offer of Rs. 206 crores by Jet Airways was not accepted.
2. Kotak was given 8 weeks to pay off all debenture holders and other creditors at par with the arrangement made with Bank of Baroda.
3. The Court Receiver was instructed not to act further for 8 weeks.
4. If claims were not settled within 8 weeks, debenture holder beneficiary banks would be brought on record as party defendants, and fresh valuation and reserve price would be fixed.
5. All interested parties, including Jet Airways, Financial Technology Limited, and Parasvnath Developers Ltd., would be entitled to bid after the reserve price was fixed.
6. All applications and the Court Receiver's report were disposed of accordingly.
7. The order was stayed for two weeks.

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