IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No.1729 of 2008 Date of decision: 12.11.2008 M/s Sello Royal (India) Limited -----Petitioner Vs. Haryana Financial Corporation and others -----Respondents CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N.MITTAL Present: Mr. Ashwani Chopra, Sr. Advocate With Ms.Rupa Pathania, Advocate for the petitioner. Mr. Kamal Sehgal, Advocate for respondent Nos. 1 and 2. Ms. Shamila Sharma, Advocate for respondent No.3. Adarsh Kumar Goel, J 1. The petitioner seeks quashing of sale of its property by Haryana Financial Corporation, respondent No.1, and the process of effecting recovery of loan advanced to it. 2. Case of the petitioner is that loan of about Rs.1 crore was taken against the mortgage deeds executed between 1995 to CWP No.1729 of 2008 1998. There was default in repayment, inter-alia, on account of financial hardship, as fire had broken out in the company of the petitioner. In the year 2002, the Unit of the petitioner was taken over under section 29 of the State Financial Corporation Act, 1951 (in short, ‘the Act’). Thereafter, the petitioner made a reference under section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short, ‘the SICA’), which was registered in April 2004. The said reference was dismissed. Another reference was filed on 3.10.2006 which was also rejected. The petitioner filed an appeal on 26.2.2007 before Secretary, BIFR. Another appeal was filed before the appellate authority. Respondent No.1 proceeded to sell unit of the petitioner for which intimation was received by the petitioner on 22.2.2007. The sale was for Rs.277.50 lacs without proper valuation and fixing of reserve price. The value of the property was about Rs.7 crores. Proceedings before the BIFR/AAIFR were ignored. There was collusion between respondent No.1 and the purchaser respondent No.3. 3. Respondent No.1 has contested the petition by submitting that it had to take over the unit of the petitioner on account of default in payment of loan. Reference made to BIFR was dismissed on 2.8.2006 on the ground that the petitioner was 2 CWP No.1729 of 2008 not interested in rehabilitation. The petitioner was given a notice to bring a better buyer but it failed to do so. Second reference filed by the petitioner was declined on 11.10.2006, the same being incomplete. The appeal filed before the AAIFR by the petitioner was never registered before the sale. Thus, no enquiry was pending before the BIFR nor any scheme was under preparation or implementation nor appeal was pending and there was no legal bar to the sale conducted by respondent No.1. Due publicity was given before sale, including in newspapers. The petitioner inspite of opportunity could not bring any better buyer. The Corporation got the property valued and the valuation was assessed at Rs.203.25 lacs. Highest bid was given by respondent No.3 which was higher than value assessed and after following due procedure, the sale was confirmed on 2.3.2007. 4. In the rejoinder filed, the petitioner has stated that sale was conducted in a hurry ignoring the proceedings under the SICA. Sale in favour of respondent No.3 was not fair and respondent No.3 violated interim order of this Court by selling plant and machinery. 5. We have heard learned counsel for the parties and perused the record. 3 CWP No.1729 of 2008 6. It is undisputed that the petitioner defaulted in making payment. Unit of the petitioner was taken over in the year 2002. Till the date of sale i.e. March 2, 2007, the petitioner did not make any effort to pay outstanding dues nor any effort was made to bring any buyer to purchase the property to pay the dues. Reference made by the petitioner before the BIFR stood rejected with the remark that the petitioner was not interest in rehabilitation. Further efforts of the petitioner appear to be only to create a ground for stopping the recovery process. 7. There is no material to show that there was any collusion to ensure that proper price of the property was not fetched. There was due advertisement and sale was in favour of highest bidder. 8. In view of above, we do not find any ground to interfere. 9. The petition is dismissed. (Adarsh Kumar Goel) Judge November 12,2008 (L.N.Mittal) ‘gs’ Judge 4 CWP No.1729 of 2008 5