: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.4378 OF 2007 IN SUIT NO.3636 OF 1999 I.C.I.C.I. Bank Ltd. ....Plaintiff V/s. The Official Liquidator And Citra Developers Ltd. ....Applicant WITH NOTICE OF MOTION NO.4699 OF 2007 IN SUIT NO.3636 OF 1999 I.C.I.C.I. Bank Ltd. ....Plaintiff V/s. The Official Liquidator ....Defendants And State of Maharashtra ....Applicant WITH NOTICE OF MOTION NO.4701 OF 2007 IN SUIT NO.3636 OF 1999 I.C.I.C.I. Bank Ltd. ....Plaintiff V/s. The Official Liquidator ....Defendant And Y.M. Patil ....Applicant WITH NOTICE OF MOTION NO.262 OF 2008 IN SUIT NO.3636 OF 1999 : 2 : I.C.I.C.I. Bank Ltd. ....Plaintiff V/s. The Official Liquidator ....Defendant And Association of Engineering Workers ....Applicant WITH NOTICE OF MOTION NO.716 OF 2008 IN SUIT NO.3636 OF 1999 I.C.I.C.I. Bank Ltd. ....Plaintiff V/s. The Official Liquidator ....Defendant And Sakharamseth Employees Union ....Applicant Mr.Iqbal Chagla, Senior Counsel with Mr.Birendra Saraf, Mr.Vikram Trivedi, Mr.Sachin Chandrana and Mr.Mayur Bhojwani i/b M.K. Ambalal & Co. for the Plaintiff. Mr.Janak Dwarkadas, Senior Counsel with Mr.A.S. Kamat i/b Kartikeya & Associates for the Applicant in Notice of Motion No.4378 of 2007. Mr.S. Purohit with Mr.Abhisekh Sawant i/b Wadia Gandhi for Nirmal Lifestyle Pvt.Ltd. for bidder. Mr.Aspi Chinoy, Senior Counsel with Mr.Prakash Shah i/b PDS Legal for the Applicant - Metropolitian Infrahousing Pvt.Ltd. - Bidder in all Notices of Motion. Mr.N.M. Ganguli for the workers Applicant in Notice of Motion No.262 of 2008. Mr.Akshay Patil with Mr.Manish Doshi i/b Vimadalal & Co. for the Applicant in Notice of Motion No.716 of 2008. Mr.Vipul Shukla for the Applicant in Notice of Motion No.4701 of 2007. Mr.B. Colabawala i/b M/s.Harani & Co. for : 3 : Hajurasteel Ltd. - Bidder. Mr.D.A. Nalawade, Government Pleader with Mr.R. Bhosale, A.G.P. for Tahsildar, Kalyan. Mr.L.B.S. Puri for Official Liquidator. Mr.K.L. Vyas, Court Receiver with Mr.D.V. Deokar, 1st Assistant to the Court Receiver present. CORAM : S.J. VAZIFDAR, J. DATED : 4TH MARCH, 2008. P.C. : 1. By an order dated 4.12.2006, the suit was decreed in terms of the minutes of the order tendered on and dated 27.11.2006 and marked "X". The order was modified by an order dated 19.12.2006. By clause 7 of the said minutes of the order, the Receiver earlier appointed by an order dated 30.6.1999 was directed to act as the Receiver in execution and to conduct the sale of the mortgaged/charged properties as ordered in the minutes of the order. The property comprises of land admeasuring 7,23,449 sq.mtrs. together with structures, movable machinery etc. thereon. 2(A). In fact the Court Receiver appointed at the interlocutory stage was also empowered by orders dated 8.2.2002 and 4.7.2002 to sell the said properties. (B). The Court Receiver had attempted to sell the : 4 : said properties on four earlier occasions. The first auction was held on 5.7.2002. The forty one offers received were rejected as being below the reserve bid. The second auction was held on 3.9.2002. Pursuant thereto, only seven offers were received. I am informed that this auction also did not result in the sale of the properties. The third auction was held on 5.5.2003. The offer was rejected as it was below the reserve bid fixed by the Court. The fourth auction held on 17.1.2004 was also rejected for the same reason. 3(A). By an order dated 27.1.2004, A.M. Khanwilkar, J. dealt with the objections of one of the bidders taken to clauses 1 and 7 of the general terms and conditions notified by the Court Receiver. The learned Judge directed the Court Receiver to issue an advertisement calling upon persons to report any encumbrances in respect of the suit properties to the Court Receiver within a specified time. The learned Judge further directed that after the claims were received, the Court may proceed to issue further directions including for issuing an advertisement incorporating the condition that the auction purchaser shall not be liable for the liabilities of the company and that the properties shall be sold on as is where : 5 : is basis and free from encumbrances. The Court Receiver was also directed to call for a fresh valuation report in respect of the suit properties in a sealed cover. (B). Accordingly a notice dated 18.3.2004 was published inviting encumbrances. 4. On 27.9.2005, the first Defendant company was ordered to be wound up. 5. As stated above, the suit was decreed on 4.12.2006 and the order was modified by an order dated 19.12.2006. 6. Thereafter the Court Receiver had published, on 2.11.2007, notices for public auction of the suit properties scheduled to be held on 27.11.2007. 7. Notice of Motion No.4378 of 2007 was filed by one of the bidders seeking various orders and clarifications in respect of the terms and conditions and in particular clauses 4, 6, 25 and 32 thereof. An ad-interim application was made on 27.11.2007. The auction was ordered to be held but it was clarified that the same would be subject to the orders in the : 6 : Notice of Motion. The matter was mentioned again on the same day. By a further order also dated 27.11.2007, I directed the auction to be postponed to 10.12.2007 at 3.00 p.m. 8. The suit properties which are the subject matter of the proposed sale include land which admeasures 7,23,449 sq.mtrs. The State of Maharashtra by the above Notice of Motion No.4699 of 2007 claimed inter-alia that out of the above properties 1,82,003 sq.mtrs. are class-II occupancy lands and contended that the same ought to be so shown in the public notice. The State of Maharashtra contended that in respect of the said land, it is entitled to 75% of the sale proceeds in respect of the unearned income. Accordingly by the said Notice of Motion, the State of Maharashtra has sought an order modifying the public notice for auction of the said land to show the portion thereof admeasuring 1,82,003 sq.mtrs. described at Exhibit "A" to the affidavit in support of the said Notice of Motion as class-II occupancy lands ; for an order permitting the State of Maharashtra to withdraw the unearned income to the extent of 75% of the sale proceeds of the lands described at Exhibit "A" to the affidavit in support as per the table at Exhibit "A-1" to the affidavit in : 7 : support and for an order directing the Respondents not to part with the said land described in Exhibit "A" to the affidavit in support as per the table in Exhibit "A-1" to the affidavit in support. 9(A). Notice of Motion No.4701 of 2007 is taken out by one Yashwant M. Patil, a worker of the first Defendant company now in liquidation seeking an order directing the Court Receiver to disclose the liabilities of the first Defendant and for a declaration that clause 32 of the conditions of sale is void and for the modification thereof. (B). Notice of Motion No.716 of 2008 is taken out by the Sakharamseth Employees Union, a registered union of the first Defendant company seeking to intervene in all the proceedings relating to the sale of the moveable and immovable properties. (C). Notice of Motion No.262 of 2008 is taken out by the Association of Engineering Workers who have also sought to intervene in the above suit. The Applicants herein have also sought other reliefs including that the terms and conditions of sale be modified by directing the purchaser to purchase the property as a going concern with a stipulation for the : 8 : employment of the workmen employed in the said factory and for an order that the Plaintiffs may be excluded from the benefits of the sale proceeds. These prayers were however not pressed at the hearing before me. 10. The above Notices of Motion appeared before me on the last few occasions when various suggestions were made by all the learned counsel to ensure that the properties are sold as expeditiously as possible. All the parties including the Applicants in each of the above Notices of Motion contended that the sale ought to be completed as early as possible especially in view of the fact that large amounts are due to the workers and other creditors. The learned counsel appearing on behalf of the two unions were particularly anxious in this regard as the delay in the sale according to them was causing the workers enormous prejudice. 11. It was submitted by all the learned counsel including on behalf of the State of Maharashtra that the land alleged to be class-II occupancy lands admeasure only 1,82,003 sq.mtrs. and are identified and in any event identifiable. The particulars thereof have in fact been specified in Notice of Motion No.4699 of 2007 taken out by State of : 9 : Maharashtra and especially in Annexure "A" to the affidavit in support thereof. The clarifications sought by the Applicant of Notice of Motion No.4378 of 2007 which causes considerable difficulty in the way of completing the sale of the property arose inter-alia from the claim of the State of Maharashtra in respect of the said lands alleged to belong to class-II category admeasuring 1,82,003 sq.mtrs. It was therefore submitted that any adjudication in respect of the claim of the State of Maharashtra would prolong the agony of the creditors, especially of the workers, indefinitely and that the entire problem could be solved by ordering the sale of the remaining portion in respect whereof there is no dispute, separately. 12. Having considered the facts and circumstances of the case at considerable length and in detail, I am of the view that the suggestion made by all the parties ought to be accepted. There is nothing on record that suggests that a separate sale of the two portions namely 1,82,003 sq.mtrs. in respect whereof a claim has been made by the State of Maharashtra for unearned income and the balance 5,41,446 sq.mtrs., will not fetch the best price. Indeed in my opinion the sale of 5,41,446 sq.mtrs. will fetch the correct : 10 : price if it is sold separately without any complication arising as a result of the claim made by the State of Maharashtra with respect to the smaller portion admeasuring 1,82,003 sq.mtrs. The State of Maharashtra does not object to the sale of the said 5,41,446 sq.mtrs. on any ground. The purchaser would acquire clear title to the said 5,41,446 sq.mtrs without any claim of the State of Maharashtra attaching to the property itself in respect of the said 5,41,446 sq.mtrs. for any reason whatsoever including in respect of unearned income. 13. The land in respect whereof the State of Maharashtra has made a claim is also a substantial portion admeasuring 1,82,003 sq.mtrs. There is nothing to suggest that the same cannot be exploited commercially by itself. In other words, there is nothing to suggest that it would fetch a higher price only if it is sold along with the remaining 5,41,446 sq.mtrs. 14. The above method would redress the grievances of all the creditors, especially the workers who have been waiting for their dues for many years now, as well the other parties. This procedure commends itself to me. : 11 : 15. Four valuation reports submitted by M/s.S.S. Joshi & Associates, M/s.H. Mehta & Associates, M/s.Sadashiv Nargundkar & Associates and M/s.AT & TS Associates were opened in my presence for my perusal. They were re-sealed in Court during the hearing itself. I will fix the reserve bid later by a separate order. 16. The grievance of the Applicant in Notice of Motion No.4378 of 2007 also stands redressed in view of the clarifications and modifications I propose making to the terms and conditions of sale and in particular clause 32 thereof. 17. I however, reject Mr.Dwarkadas’s contention that the fresh bids ought to be a continuation of the existing auction process and that the bidding must be restricted to those who have already participated therein. Considering all the facts of this case and especially the extent and the value of the properties and the quantum and the nature of liabilities, this is not at all desirable. The endeavour must be to realize the best price. The suggestion if accepted would not fetch the best price. : 12 : 18. By this order therefore Notices of Motion Nos.4378 of 2007, 4701 of 2007, 716 of 2008 and 262 of 2008 are disposed of. Further Notice of Motion No.4699 of 2007 is also disposed of in so far as it concerns the said 5,41,446 sq.mtrs. It remains on the file only in respect of the said 1,82,003 sq.mtrs. The above Notices of Motion are accordingly disposed of by the following order :- i). The Court Receiver shall proceed to sell the portion of the said land admeasuring about 5,41,446 sq.mtrs i.e. the suit land except the portion admeasuring about 1,82,003 sq.mtrs. particulars whereof are at Exhibit "A" to Notice of Motion No.4699 of 2007 on the terms and conditions contained in the draft settled by this order placed on record and marked "Y". Each of the pages has been initialled by me. I have deleted clause 17 from this draft. ii). The above Notices of Motion are disposed of in terms of this order. Notice of Motion No.4699 of 2007 remains pending only in relation to the claim of the State of Maharashtra in respect of the said 1,82,003 : 13 : sq.mtrs. This Notice of Motion is adjourned to 26.3.2008. iii). It is made clear that the State of Maharashtra shall not be entitled to any claim on the land itself admeasuring about 5,41,446 sq.mtrs. upon the sale thereof to the auction purchaser being confirmed. iv). The possession of the said 5,41,446 sq.mtrs. shall be handed over by the Court Receiver to the auction purchaser, if any, only after the land is demarcated by the D.I.L.R. The D.I.L.R. shall demarcate both the portions namely the 5,41,446 sq.mtrs. and the 1,82,003 sq.mtrs. separately. The D.I.L.R. is requested to do the work as expeditiously as possible and in any event within eight weeks from today. The fees of the D.I.L.R. shall be paid from out of the sale proceeds. Only for convenience in the first instance the fees of the D.I.L.R. shall be paid by the Plaintiff who shall be entitled to reimbursement thereof from the sale proceeds forthwith without further orders and upon receipt of even a portion : 14 : thereof in priority to and irrespective of any other claim. v). The auction shall not be delayed on account of the demarcation work of the D.I.L.R. remaining pending. vi). The Court Receiver shall issue necessary advertisements in the Indian Express, Maharashtra Times, Mumbai Samachar (Gujarati edition) as well as on the internet on such sites as the Court Receiver deems fit and as the parties may suggest. The advertisements shall be issued on or before 28.3.2008. The advertisement shall specify the further programme including regarding inspection of the property. vii). It is clarified that the sale will be pursuant to a fresh auction and shall not be limited to the parties who participated in the previous bids. viii). The sale shall be completed on or before 2.6.2008.