TaxTMI 
TaxTMI 
2011 (1) TMI 1591
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....stitution of India, the Petitioner impugns the validity of the auction sale purely in his capacity as a bidder at the auction. 2. On 21 May 2010, the First Respondent invited bids for a public auction of the immovable property in question. The notice inviting the tenders specifically stipulated that the reserve price was 14.62 crores, below which "the property will not be sold". The Petitioner submitted a bid at the auction which was held on 28 May 2010 in the amount of Rs. 15.05 crores. The Petitioner, however, failed to comply with his obligation of paying the balance of the sale consideration over and above Rs. 3,76,25,000/, upon which the auction sale was cancelled and the property was readvertised. While issuing an advertisement for the public auction, the First Respondent once again stipulated a reserve price of Rs. 14.62 crores below which, it was stated, the property would not be sold. At the second auction which was held on 15 September 2010, the Petitioner submitted a bid of Rs. 5 crores, which was well below the reserve price of Rs. 14.62 crores and below Rs. 15.05 crores which was submitted at the first auction. Four bids were received by the bank. The highes....
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.... in the facts and circumstances of this case and even on the assumption that the remedy of the appeal under Section 17 is available to an auction purchaser, it would be appropriate and proper for this Court to entertain the Petition on merits and deal with the challenge in order to render finality. In view of the joint request made by counsel for both the parties, the grievances of the Petitioner have been considered on merits by consent. 5. The terms and conditions governing the first auction sale specifically provided that the reserve price would be Rs. 14.62 crores below which the property would not be sold. During the course of the first auction, the Petitioner submitted a bid of Rs. 15.05 crores. The Petitioner was unable to comply with the terms of the sale, following which the sale was cancelled and the property was readvertised. On the second occasion, as well, the bank while inviting tenders, specifically stipulated the condition that the property would not be sold below the reserve price of Rs. 14.62 crores. Despite this, the Petitioner submitted a bid of Rs. 5 crores. There is merit in the submission urged by counsel for the Respondent that this bid of the Petitioner wa....
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....ice, he may, with the consent of the borrower and the secured creditor effect the sale at such price. 8. In the present case, the terms and conditions of sale provided that the property would not be sold at a price less than the reserve price. There was, therefore, in this case a clear indication by the First Respondent that it would not agree to any amount less than the reserve price. No bidder was therefore entitled to assume that a bid at an amount less than the reserve price would possibly meet the consent of the secured creditor. The secured creditor had in advance clearly set forth its intent not to accept any bid below the reserve price. That apart, as a matter of fact, in the present case, the bank received two bids both in excess of the reserve price. If as submitted before the Court on behalf of the Petitioner, the Petitioner submitted a bid below the reserve price in the face of a clear stipulation to the contrary in the notice inviting tenders, he was taking a chance or wager. The Petitioner, by taking that chance must be conscious of the possibility of being outbid by others who quoted in excess of the reserve price. The submission of the Petitioner that every bidder ....
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....d. The issuing banker declined to accept the draft following which the First Respondent addressed a letter dated 16 September 2010. The issuing bank by its letter dated 23 September 2010, stated that the purchaser of the draft, Megh Leasing and Investments Limited had informed it that there were certain irregularities in the auction conducted by the First Respondent and that the issuing bank was advised not to accept the draft. The issuing bank stated that since there was a dispute between the purchaser of the draft and the First Respondent, the draft had not been accepted by the bank. On 16 September 2010 Megh Leasing and Investments Limited addressed a letter to the issuing banker stating that it had purchased a draft and furnished it to the Petitioner 'as a business transaction'. 11. The contention which has been urged on behalf of the Petitioner is that Megh Leasing and Investments Limited had financed the earnest money deposit on the occasion of the earlier auction and it would have been known to the bank that the demand draft which was alleged to be found on the floor of the auction hall, in fact, belonged to the Petitioner. Counsel submitted that the tender form had....