HON’BLE SRI JUSTICE B. PRAKASH RAO AND HON’BLE SRI JUSTICE SANJAY KUMAR W.A.Nos. 1246 and 1274 of 2004 and W.P.No. 25962 of 1999 Date: 04-03-2011 W.A.No.1246 of 2004: Between: Kunj Behari Mundra ……….. Appellant and Andhra Pradesh State Finance Corporation and others …….. Respondents HON’BLE SRI JUSTICE B. PRAKASH RAO AND HON’BLE SRI JUSTICE SANJAY KUMAR W.A.Nos. 1246 and 1274 of 2004 and W.P.No. 25962 of 1999 COMMON JUDGMENT: (Per BPR, J) Since all these three matters concern the same subject matter in dispute, they are taken up together for disposal. The appeals in W.A.Nos.1246 of 2004 and 1274 of 2004 are one at the instance of the unsuccessful writ petitioner, who is a participant in the auction, and the other at the instance of the owner of the property, which is being put to auction by the A.P. State Finance Corporation as a defaulter, respectively. Both are aggrieved against the judgment in W.P.No.5525 of 1994, dated 30-04-2004 dismissing the writ petition with costs where the writ petitioner i.e., the appellant in W.A.No.1246 of 2004 sought a writ under extraordinary jurisdiction under Article 226 of the Constitution of India for a Mandamus directing the A.P. State Finance Corporation to call for negotiations for the sale of the property which is involved. In the other proceedings i.e., W.P.No.25962 of 1999, the petitioner is again the participant in the auction who sought a writ of Mandamus declaring the auction conducted on 21-03-1994 by the Corporation as illegal and allow him to settle the loan amount and revive the unit. Briefly the facts of the case are as follows: W.A.No.1246 of 2004 has been filed against the judgment passed in W.P.No.5525 of 1994, whreunder the writ petition filed by the appellant was dismissed on 30-04-2004. The said writ petition was filed for directing SFC i.e., first respondent therein to call for negotiations for sale of the property viz., Jagdish Industries Rice Mill and finalize the sale only in pursuance of such negotiations between the petitioner and second respondent therein. The learned single Judge, after hearing the rival contentions and after considering the various judgments of Hon’ble Supreme Court, came to the conclusion that the action of Corporation is in accordance with the provisions of Section 29 of the State Financial Corporations Act, 1958 (for short “S.F.C. Act”) and there are also no pleadings nor any attempt is made to prove fraud and after perusing the entire record, the allegation of fraud was rejected, and by holding that the Corporation has acted fairly as held by Supreme Court in various decisions in finalizing the tenders in favour of highest bidders and that it is not vitiated by any illegality or unreasonableness, the writ petition was dismissed. In the Writ Appeal, the learned senior counsel has contended that the Corporation has acted in haste and did not provide opportunity to the appellant for negotiations so that more price can be fetched for the Corporation and it is only to favour the 2nd Respondent, the Corporation has acted in haste and finalized the tender immediately and also delivered possession of the property. It was contended that the petitioner has offered a sum of Rs.24,11,111/- and he was also ready for negotiations but the Corporation, without calling for negotiations, has immediately confirmed the sale in favour of the 2nd Respondent on 24-02-1994. It is also contended that the 2nd Respondent deposited a cheque for Rs.17 lakhs on 28-03-1994 and even before the cheque could be encashed, the possession of the unit was delivered and agreement of sale was executed. It is also stated that in the agreement of sale, the purchaser of the stamp was shown to be a different person but not the 2nd Respondent. As such finalization of the proceedings is bound to be set aside. On the other hand, the Corporation has contended that since the unit has fallen into arrears of more than Rs.14 lakhs, the Corporation issued various advertisements on 27-10-1992, 13-09-1993, 16-04-1993 and 05-10-1993 and sale could not be finalized for various reasons and when a notification was issued on 05-10-1993, the petitioner, though did not file his tender, has offered more amount after the tenders were filed. In the said tender, the 2nd Respondent was the highest bidder for an amount of Rs.22.65 lakhs but in order to see that more amount is fetched, the Corporation has again issued a fresh notification for which tenders were opened on 21- 03-1994 and the 2nd Respondent was the highest bidder for an amount of Rs.25,11,005/- whereas the appellant has offered Rs.24,11,111/-. Since a telegram was addressed by the appellant, a letter was also addressed to him to attend for negotiations but he did not do so and the Corporation has confirmed auction in favour of 2nd Respondent on 24-03-1994 and on receipt of the amount, possession of the unit was delivered on 28-03-1994. With regard to cheque of Rs.17 lakhs, since it was a local cheque drawn in Nizamabad, the Corporation has verified with the bank officials and since it was stated that the amount is available, and as the Corporation wanted to close the auction proceedings by 31-03-1994, the Corporation has finalized the tender and there is absolutely no illegality in the same. The 2nd Respondent filed counter stating that he has participated in the auction pursuant to the auction notice issued on 05-10-1993 and he was the highest bidder for an amount of Rs.22.65 lakhs but based on some representation made by the appellant, the Corporation has again issued advertisement on 13-03-1994 calling for tenders which were received upto 21-03-1994 and the 2nd Respondent filed their tender offering an amount of Rs.25,11,005/- while the appellant has offered only Rs.24,11,111/-. Pursuant to opening of tenders, there were no negotiations and the Corporation has finalized the tender in favour of the 2nd Respondent since he was the highest bidder and pursuant to the same, the Corporation has delivered possession of the property and also executed agreement of sale in favour of 2nd Respondent. As such, the action of the Corporation is in accordance with law. It is also stated that the writ petition and writ appeal were filed only to harass the 2nd respondent and for extraneous considerations. The only point for consideration in the writ appeals is, whether the Corporation acted in accordance with the powers conferred to them under Section 29 of the SFC Act and whether the action of the 2nd Respondent in conducting auction was fair. In the instant case, as stated above, the Corporation, in order to realize its amounts, has, after issuing several advertisements, finalized the tender in favour of the highest bidder i.e., 2nd Respondent on 24- 03-1994 and the appellant could not point out any illegality in the said finalization, as admittedly the appellant was not the highest bidder. The contention of the appellant is only that after the auction was confirmed, without calling for negotiations, the auction was finalized in favour of the 2nd Respondent and the Corporation also acted in haste in delivering possession and also in entering into agreement of sale on 28-03-1994. As seen from the record, a cheque issued by the 2nd Respondent was encashed by SFC on 30-03-1994 and the same has nothing to do insofar as conducting of auction on 21-03-1994 nor the confirmation of auction on 24-03-1994. As seen from the advertisement, there is no clause with regard to negotiations and hence the Corporation has finalized the tender in favour of the highest bidder. The appellant did not adduce any evidence to show that the action of the Corporation is either unfair or mala fide. The Hon’ble Supreme Court, in a judgment reported in KARNATAKA STATE INDUSTRIAL INVESTMENT AND DEVELOPMENT CORPORATION LIMITED v. CAVALET INDIA LIMITED AND OTHERS [1], has held that judicial review of the actions of financial corporation can be interfered under Article 226 of the Constitution of India, only if such action is unfair or unreasonable or violative of any statutory provisions. It was held that under Article 226 of the Constitution of India, the High Court does not sit as appellate authority over the acts and deeds of the Corporation and seek to correct them. The doctrine of fairness does not convert the writ courts into appellate authorities over administrative authorities. In a matter between the Corporation and its debtor, a writ Court has no say except in cases where there is a statutory violation on the part of the Corporation or where the Corporation acts unfairly i.e., unreasonably. In the instant case, since no violation has been pointed out on the part of the Corporation nor any unfairness or unreasonableness while finalizing the tender in favour of the 2nd Respondent, the learned single Judge has considered all these facts and came to the conclusion that the Corporation has acted within its powers and has not shown any favouritism in favour of the 2nd Respondent. Apart from several other developments which have taken place and also taking into account the twin attempts made to proceed with the auction earlier, the details of which need not be gone into at this stage, it would suffice to take note that ultimately a sale deed was executed on 09-08-2004 and the same was duly registered. It is at this stage much is sought to be canvassed from all the sides to bring back the inceptional stage, which may not be possible. However, having regard to the chequred events, which have already been underwent culminating into an execution of sale deed and registration thereof, substantive rights stand vested and they cannot be meddled with nor set at naught in exercise of the powers under Article 226 of the Constitution of India except taking recourse to, if any, the remedies available under the law. M/s. Jagdish Industries Rice Mill was a loanee from SFC and since the said firm defaulted in payment of arrears, the unit was seized on 14-09-1992 and the auction was conducted on 21-03-1994 in which M/s. Godavari Agro Godown(2nd Respondent in the writ petition) was the successful bidder. Thereafter a writ petition was filed by M/s. Jagdish Industries and the said writ petition was dismissed as withdrawn. There is also no permission granted for filing a fresh writ petition. It was also stated that after dismissal of the writ petition, registered sale deed was executed in favour of the 2nd Respondent. In view of the same, the writ petitioner, who is the son of the then Managing Partner, cannot now maintain the writ petition questioning the auction conducted on 21-03-1994. In view of the foregoing discussion, we find no merits in either of the writ appeals and the writ petition and the same are, accordingly, dismissed. No costs. _________________ B. PRAKASH RAO, J ________________ SANJAY KUMAR, J Date: 04-03-2011 YCR [1] 2005 (4) SCC 456