Case BriefsHigh Courts

Orissa High Court: A Division Bench of Mohammad Rafiq and Debabrata Dash JJ. disposed off the petition on merits.

The factual matrix of the case is that the petitioner is a registered cooperative society, involved in supply/sale of different products including fertilizers, who participated in the e-auction made by the Steel Authority of India Limited, Rourkela Steel Plant for the purpose of sale of Ammonium Sulphate by depositing the required EMD. The auction was conducted and the petitioner’s name appeared in the bid sheet under rank-1 being the sole bidder. Despite the petitioner being the successful bidder no supply of the stock was made instead another open sale dated 19-12-2019 was published by the opposite parties. Being apprehensive that in the subsequent open sale, the entire stock would be sold wholly to the detriment of the petitioner; bid was given by the petitioner for purchase of small quantity of Ammonium Sulphate.  Hence the instant writ of mandamus has been filed to command the opposite parties to deliver the stock and direct the opposite party to consider and dispose of the petitioner’s representation dated 21-12-2019 as the action of the opposite party in holding the second auction is arbitrary and illegal.

B. K. Mohanty and S S Rao, Counsel for the petitioner submitted that as there was no response towards representation dated 19.12.2019 given by the petitioner, it is clear that there was no prior intimation regarding cancellation of the first auction process been given and it is a fit case for judicial review in annulling the second auction and for restoration of the result of the first auction.

B. Dasmohapatra and B.N Bhol, Counsel for the opposite parties highlighted the scope of writ jurisdiction in contractual dealings of the State. He further highlighted that in the first auction; the petitioner was the only participant and had applied for the quantity quoting the fixed bid price making the first auction not competitive at all. Hence the present case is not fir for judicial review.

The Court after hearing both sides relied on the judgment titled Maa Binda Express Carrier v. North-East Frontier Railway (2014) 3 SCC 760 and observed that there is a certain public interest at stake in the decision of cancellation of the first auction as petitioner being the sole participant in an auction reduces competition and hinders public interest. It also stated that judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made ‘lawfully’ and not to check whether choice or decision is ‘sound’.

In view of the above, petitioner is estopped from questioning the validity/legality of the cancellation of the first auction and the petition is disposed off. [Maa Sarala Multipurpose Co-operative Ltd. v. Steel Authority of India, 2020 SCC OnLine Ori 536, decided on 20-07-2020]

Case BriefsHigh Courts

Kerala High Court: N. Nagaresh, J. disposed of a writ petition seeking to recover the amount due to be received from the properties auctioned.

In the present case, the petitioners 1 and 2 were subscribers to a Chitty and in order to invest in their business, they participated in various auctions. Properties were purchased in installments, however, repayment of the installments defaulted. The 2nd Respondent initiated action against the petitioners under the Revenue Recovery Act.

The counsel representing the petitioners, Sakir K.H had submitted that the amount sought to be recovered from the properties would fetch more than the amount due to the 1st respondent and if auction of the entire properties are conducted in pursuance of revenue recovery proceedings, it would put the petitioners in a position of irrecoverable loss and injury. The counsel expressed the petitioner’s willingness to discharge their liabilities provided the installment facilities are given to them for remitting their dues.

The standing counsel for the respondents, Anil Kumar submitted the amount that would cover the arrears.

High Court upon perusal of the facts and circumstances disposed the writ petition and permitted to remit the arrears towards the chitties and the loan in twenty equal monthly installments. The Court also directed that upon two payment defaults the respondents will be at liberty to proceed against the petitioners.[Prakasan C.K v. Kerala State Financial Enterprises Ltd., 2019 SCC OnLine Ker 2931, decided on 17-09-2019]

Case BriefsHigh Courts

Punjab and Haryana High Court: The petition was filed before Krishna Murari, CJ. and Arun Palli, J., praying that the State Government should be commanded to declare an area in question as a protected monument and to preserve it accordingly. An affidavit was filed by Deputy Secretary, Department of Archaeology, Museums, and Archives, Punjab stating that a notification under Section 4(3) of the Punjab Ancient and Historical Monuments and Archaeological Sites and Remains Act, 1964, had been issued and published.

As per the amicus curiae in this case, according to the affidavit, cause of this petition had already been served thus this petition should be quashed. Whereas the Punjab Urban Development Authority submitted that notification had been issued without considering the objections by the authorities.

The High Court was of the view that issue raised by Punjab Urban Development Authority and submission of respondent both were beyond the scope of this Public Interest Litigation. Amicus curiae brought to light the fact that consideration for auction was not fully paid and no allotment order in their favour has been issued. The Court stated that if any legal right was violated they can take recourse accordingly and for this Public Interest Litigation the proceedings were closed and the matter was disposed. [Subhash Kapoor v. State of Punjab, 2018 SCC OnLine P&H 1517, decided on 01-10-2018]

Case BriefsHigh Courts

Delhi High Court: A Single Judge Bench comprising of Navin Chawla, J. allowed a miscellaneous petition filed under Section 34 of Arbitration and Conciliation Act 1996, against the order of the Arbitrator wherein he did not consider the second part of the prayer made by the petitioner.

The petitioner was the successful bidder for certain commercial plot in an auction sale conducted by the respondent, for which he had paid Rs. 5.52 crores, being the entire bid amount. He also purchased stamp duty worth Rs. 33,12,040. However, the respondent failed to execute the lease deed. Consequently, the petitioner demanded from the respondent, 15% p.a. interest on earnest money deposit (EDM), bid amount and stamp duty. Learned Arbitrator in his impugned award, found the reference in favour of the petitioner and directed the respondent to pay back the entire amount of stamp duty purchased by the petitioner along with 9% p.a. interest thereon. The petitioner was aggrieved by non-consideration of his prayer regarding the bid amount and EDM. The issue was before the High Court in the instant petition filed by the petitioner.

The High Court considered the submission of the respondent that since the Arbitrator did not grant the said prayer made by the petitioner, it must be deemed to have been rejected. The Court rejected such submission of the respondent. There was no discussion in the award on the above-said prayer. The Court observed that in terms of Section 31(3) of the Act, the Arbitrator had to state the reasons upon which the order is passed. If the claim made by the petitioner was to be rejected, Arbitrator has to give reasons for the same. One cannot assume rejection of prayer and, further, the reasons therefor. The High Court held that clearly, the Arbitrator did not consider the prayer as far as bid amount and EDM was concerned. Thus, the High Court directed the petitioner to reagitate such claims under proper proceedings. The petition was disposed of in above terms. [Surajmal Yadav v. DSIIDC Ltd.,  2018 SCC OnLine Del 9555,dated 24-05-2018]

Case BriefsSupreme Court

Supreme Court: Appointing the Official Receiver of the Bombay High Court as the receiver for the auction of the Aamby Valley Property, the 3-Judge Bench of Dipak Misra, CJ and Ranjan Gogoi and Dr. AK Sikri, JJ ordered auction of the property after SEBI sought for the direction of the Court in the light of the possible encroachment of the area in question.

The Bench said that the High Court was at liberty to adopt the procedure which will facilitate the auction and the mode of auction as suggested by the Official Liquidator shall be considered by the Company Judge in consultation with Justice A.S. Oka. It was directed that the Official Receiver has to see that the property is properly maintained and no encroachment takes place so that valuation does not reduce and auction takes place in peaceful manner.

The Court also said that the Receiver was at liberty to take instructions from the Company Judge and Justice A.S. Oka.

Earlier, the Court had rebuked Sahara Chief Subrata Roy for employing dilatory tactics and had said:

“He, who thinks or for that matter harbours the notion that he can play with law, is under wrong impression.”

The Court will now take up the matter in the first week of February 2018. [SEBI v. Subrata Roy Sahara, 2017 SCC OnLine SC 1354, order dated 23.11.2017]

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of Dipak Misra, CJ and Ranjan Gogoi and Dr. AK Sikri, JJ , refusing to grant of further time to Sahara Group and Subrata Roy and entertaining post-dated cheques which are dated 11th November, 2017, said that the same would tantamount to travesty of justice and extending unwarranted sympathy to a person who is indubitably (that which cannot be doubted: Cambridge Dictionary) an abuser of the process of law. The Court, hence, directed the Official Liquidator to carry out the auction of the Aamby Valley property.

The Court directed that the auction be held as per the direction given by this Court and that the Official Liquidator is permitted to carry out the auction as per procedure and during the auction the Registrar General of the High Court of Bombay, who is designated as the Supreme Court appointee, shall remain personally present to over-see the physical auction at the auction venue at Mumbai.

Kapil SIbal, appearing for Sahara, argued that it was the first case where a contemnor had paid the substantial amount which may go up to Rs. 16,000 crores, and though approximately Rs.8651 crores is due, that should not be held against him. He added that tremendous efforts have been made by the respondent-contemnor to comply with the order of this Court and if the prayer made by him is not accepted, the principle of reasonableness would be defeated.

Senior counsel Arvind P. Datar, appearing for SEBI, contended that the auction has to proceed and this kind of “drama of procrastination” must stop. Amicus Curiae Shekhar Naphade also urged that the conception “enough is enough” should be adopted by this Court and there is no reason why long rope should be given to the respondent-contemnor to play truancy and seek indulgence.

Agreeing with the contentions of SEBI and amicus curiae, the bench said:

“He, who thinks or for that matter harbours the notion that he can play with law, is under wrong impression.”

Coming down heavily upon Subrata Roy, the Court said:

“the respondent-contemnor in his own way has treated this Court as a laboratory and has made a maladroit (awkward in movement or unskilled in behaviour or action: Cambridge Dictionary) effort to play, possibly thinking that he can survive on the ventilator as long as he can. He would have been well advised that a person who goes on a ventilator may not survive for long and, in any case, a time would come when he has to be comatosed.”

[SEBI v. Sahara India Real Estate Corporation Ltd, 2017 SCC OnLine SC 1069, order dated 11.09.2017]


Case BriefsSupreme Court

Supreme Court: The bench of Dipak Misra, Ranjan Gogoi and Dr. A.K. Sikri, JJ ordered the auction of the Aamby Valley City near Lonavala, Maharashtra due to non-payment of amount as agreed by the Sahara Group of Companies and asked the contemnors to provide all the necessary details relating to the property to the Official Liquidator of the Bombay High Court within 48 hours. The Court also asked Subrata Roy Sahara to remain personally present before the Court on the next date of hearing i.e. 27.04.2017.

The Court also directed the Power of Attorney Holder Dr. Prakash Swamy, who had filed an interim application giving a proposal that MG Capital Holdings LLC, New York, USA, shall purchase the Hotel Plaza by giving 550 million US dollars and to show its bona fide, had agreed to deposit Rs.750 crores with SEBI Sahara Refund Account, to appear before the Court on the next hearing. Since no sum was deposited by him, the Court asked Rana Mukherjee, the senior counsel appearing for the Union of India to intimate the Ministry of External Affairs, Government of India, so that Dr. Prakash Swamy does not leave India and asked him hand over his address and the passport number. The Court also directed him to deposit a sum of Rs.10 Crores in the SEBI Sahara Refund Account within 10 days, which shall be forfeited towards costs,  failing which this Court may issue non-bailable warrants of arrest against him.

Stating that the contemnor shall be guided by the affidavit that has been sworn and filed before this Court and not play truancy with the contents of the affidavit, the Court said that “He who plays truancy with the Majesty of Law, invites the wrath and, may, ultimately, has to suffer the peril.” [SEBI v. Sahara India Real Estate Corpn.Ltd, 2017 SCC OnLine SC 407, order dated 17.04.2017]

High Courts

Allahabad High Court: In the instant case where the petitioner had alleged that submission of  original documents of solvency and character certificates along with the bid document causes serious hardship to bidders, where bidders have to submit bids to more than one tender, the Court while referring cases of this Court directed the respondents that rather than insisting on filing of original certificates along with the bid document, authorities must accept attested true copies of the aforementioned documents along with affidavits verifying that said documents are valid. The Court further held that at the time of opening of bids authorities may compare the attested copies with originals and can reject the bid in case of non-production of original documents. The Court also clarified that these directions shall govern only those cases where last date of submission of the bid has not expired. Maa & Company v. State of U.P., Writ No. 23641 of 2014, Decided on 24th of April, 2014

To read the judgment, click here