Natural justice and approved sale norms invalidated a statutory share sale, though relief was limited because undoing it was impracticable.

A sale approved under a statutory asset-disposal scheme was held defective where the Custodian acted beyond the approved sale procedure and the parties were not given a fair opportunity to secure a better offer. The Court found that failure to follow the governing sale norms and denial of time to the notified parties amounted to breach of natural justice, rendering the approval vitiated. However, because the sale had largely been implemented and undoing it would prejudice third-party interests, relief was confined to the protected shareholding only. The matter was remitted for a fresh sale of that limited portion in accordance with the approved norms.

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Issues: (i) Whether the Special Court's approval of the sale of the controlling block of Apollo shares was vitiated by breach of the scheme, the sale conditions, and the principles of natural justice. (ii) What relief should follow in view of the subsequent developments and the impracticability of undoing the entire sale.

Issue (i): Whether the Special Court's approval of the sale of the controlling block of Apollo shares was vitiated by breach of the scheme, the sale conditions, and the principles of natural justice.

Analysis: The sale framework under the Special Court Act was designed to secure the highest possible price for attached assets, and the Custodian was bound to act strictly under the Special Court's directions. The Custodian exceeded its authority by inviting Apollo and its management to bid before the Special Court had first ascertained the highest offer, and the Special Court failed to adhere to its own sale norms and the earlier directions to explore the method likely to fetch the best price. The denial of 48 hours' time to the notified parties to secure a better offer, coupled with the foreclosure of their opportunity by the Custodian's letter, amounted to denial of a fair hearing. In the circumstances, the decision-making process was contrary to natural justice.

Conclusion: The impugned order was vitiated and liable to be interfered with for breach of natural justice and non-compliance with the approved sale procedure.

Issue (ii): What relief should follow in view of the subsequent developments and the impracticability of undoing the entire sale.

Analysis: Although the impugned order was defective, the sale had long since been acted upon and a substantial portion of the shares had already been extinguished. Setting aside the entire sale would therefore be impracticable and would create grave difficulties for third-party interests. The relief was accordingly confined to the shares covered by the interim protection, and the matter was remitted for a fresh sale of that limited portion in accordance with the approved norms.

Conclusion: Relief was restricted to 4.95% of the shares, and the matter was remitted for fresh sale of that portion with reimbursement of the sale consideration and interest.

Final Conclusion: The appeal succeeded only in part: the impugned sale order was set aside to a limited extent, and the matter was sent back for a fresh sale of the protected portion of shares under the governing scheme.

Ratio Decidendi: Where a statutory disposal process is designed to secure the highest possible price and to be conducted in accordance with approved norms, a sale decision made in disregard of those norms and without affording a fair opportunity to obtain a better offer is vitiated by breach of natural justice.

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