TaxTMI 
TaxTMI 
2019 (11) TMI 1382
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....ct of auction and there was collusion between the auction purchaser and auctioning authorities. Hence all these petitions are heard together and decided finally with the consent of the parties. 2. Brief facts which would be necessary to deal with the issues involved in the present matter, are stated hence forward. The Respondent Parbhani People's Cooperative Bank Ltd. is a Cooperative Bank registered under the Provisions of Maharashtra Cooperative Societies, Act, 1960. As a result of alleged mismanagement and financial irregularities, the said bank went into liquidation in the year 2007. The property in question is a plot admeasuring 2832.37 sq. mtr along with multistorey building standing on it, which was put to auction by the Liquidator. The upset price fixed to the tune of Rs. 10,64,97,000/- and approved by the Commissioner, was based on valuation reports of two Government approved valuers and likewise due consideration to market value as per Government ready reckoner, was given. 3. The respondent Liquidator, on 03.05.2019, published E-Tender notice in two leading State level widely circulated newspapers and also published it on the webpage created by E-tendering agenc....
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.... No. 9064/2019. He urges that a fraud has been committed in the auction process. 11. Shri Sabnis, learned counsel for the petitioner in Writ Petition No. 104192/19, echoed the stand taken by the petitioners in Writ Petition No. 7784/2019 and Writ petition No. 9064/2019 and prayed for quashing the auction assailed in this petition. 12. The Petitioners have placed reliance upon following judgments in support of their case. (2008 (9) SCC 299, Valji Khimji Vs. Official Liquidator; (2000) 6 SCC 69, Divya Manufacturing Vs. Union Bank of India; (2005) 5 SCC 274, Union Bank of India Vs. Official Liquidator; AIR 1999 SC 1715, Allahabad Bank Vs. Bengal Paper Mill; and a Judgment of this Court in Aurangabad Zilha Krishi and Auddhyogik Bahuuddeshiya-Sarva Seva Sahakari Sansthacha Sahakari Sangh Maryadit in Writ Petition No. 4266/2011 dated 29th November, 2011. 13. Shri P. S. Patil, learned Addl. Government Pleader appearing for the Commissioner, submits that by letter dated 01.04.2019, the Liquidator had submitted a proposal for auction of property of the Bank and requested to grant approval to upset price quoted in the proposal. He points out that, based on the valuation reports of t....
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....oners in Writ Petition No. 9064/2019, have approached to this Court on 17.07.2019 i.e. after two and half months, during which auctioned price was deposited by his client on acceptance of his offer. 18. The learned senior Advocate Mr. Dhorde, has pointed out that being highest bidder he was called for negotiations whereafter he made an offer of Rs. 12.06 Corers which was accepted and sale was finalised. The learned senior counsel Mr. Dhorde relies on following judgments in support of his case: 2015(10) SCC 94, Vedica Procon Private Ltd. vs. Balleshwar Greens Private Ltd.; 2008(9) SCC 299, Valji Khimji and Company Vs. Official Liquidator; 2000 (1) SCC 633, Duncan Industries Ltd. Vs. State of U.P. and others; 2016 (15) SCC 272, Montecarlo Ltd. Vs. National Thermal Corporation; AIR 2012 SC 2915, M/s Michigan Rubber Ltd. Vs. State of Karnataka and others;2017 (5) Mh. L.J. 651, D.G. Road Safety Pvt. Ltd. Vs. MSRTC and others; 2014 (2) Mh. L.J. 673, Saj Enterprises Vs. Municipal Corporation Bombay. 19. To consider the rival contentions of the parties, firstly as regards upset price, this Court thought through the valuation reports to make the realistic appraisal of the factors cons....
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....Commissioner in fixing and granting approval to the upset price to the tune of Rs. 10,64,17,000/-, of the property in question. We, therefore, reject the challenge made to the upset price of the property in question. 24. Now the next question which emerges for our consideration is, whether to reopen the concluded auction proceeding for the reason higher offer is made by one of the petitioners, in respect of sale of property in question. 25. In that regard we will refer to undisputed facts, which are as follows: The Liquidator, published a notice of auction on 03.05.2019, in two widely circulated newspapers. In all five bidders had participated including the petitioner in Writ Petition No. 7784/2019 who had offered Rs. 11,21,21,111/whereas the offer of the highest bidder after negotiation was Rs. 12.06 corers which was accepted by the Commissioner. The petitioner in W.P. 7784/19 subsequent to acceptance of offer of successful bidder, had raised his offer to Rs. 13.71 corers. No justification put forward by the said petitioner as to why the offer of Rs. 13.71 corers made by him subsequent to acceptance of offer of highest bidder, was not made at the initial stage. 2....
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....y inadequate. However In the present case this court has arrived at a conclusion as observed above that upset price fixed to the tune of Rs. 10,64,17,000/-, was adequate. Thus, the said judgment in Valji Khimji (supra) will not apply to this case and the same is distinguishable for the above said reasons. 29. In the case of Divya Manufacturing (supra), the facts are that from Rs. 73 lakhs, the offer was increased up to Rs. 2 crores from which the Court had came to the conclusion that price earlier offered was highly inadequate. In case of Divya Manufacturing (supra), the price was increased by five times. In the present case the subsequent offer of Rs. 13.71 corers is not even double the accepted offer of Rs. 12.06 corers, therefore, this judgment is not applicable to the present case. 30. In the case of Union Bank of India (Supra), the facts were different. In the said matter, valuation report was kept secret as confidential document and it was not disclosed to the Bank and therefore, the Bank was not in position to raise any objection. In the said case also, it was observed that in the price offered at the first instance and the price offered subsequently, there was vast di....
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....hold that If all the said principles and safeguards are satisfied and if there is nothing to suggest any collusion or fraud, the auction proceeding may not be reopened only on the ground that subsequent to the finalization of the auction slightly higher offer is received, than the auctioned price to the sale of the property in liquidation. Thus, in view of the fact that except allegation of fraud and collusion, no evidence in that regard brought on record by any of the petitioners, we are of the considered view that this is not a fit case to reopen the auction proceeding only because slightly higher offer is made by one of the petitioners than the auctioned price. 35. Next point in respect of the change of condition relating to negotiation is concerned, it is clear from the facts that the objection was raised to the said condition. Accordingly the said condition was modified in view of Circular of the Central Vigilance Commission, dated 25.10.2005 which envisages that "there should not be any negotiations. Negotiation if at all shall be an exception and only in the case of proprietary items or in case of items with limited source or supply. Negotiations shall be held with L-1 on....