Case: LMJ International Ltd Vs. Dankuni Steels Limited

only stated that if an opportunity is given to Siona Enterprise it would be in a position to offer Rs. 14500/- per MT. Again without depositing 10% of the offer value, only a statement was made that the intending bidder was willing to deposit that amount immediately with Special Officer. It was contended that such an offer was no offer in the eyes of law.9. Insofar as dispute about the withdrawal of bid by Respondent no. 5 in the form of statement given by its counsel in the Court on May 29, 2017 is concerned, Mr. Shyam Diwan argued that the statement by the counsel for Respondent no. 5 was made in mistaken belief as the respondent no. 5 only wanted to withdraw the amount. He submitted that since the bid of Respondent no. 5 was for a total sum of Rs. 14,00,00,000/- (Rs. 14 crores only) and 1,40,00,000/- (one crore forty lakhs only) thereof was deposited as EMD (10% of the bid amount) after the acceptance of a bid by the High Court. Respondent no. 5 had also deposited the balance amount of Rs. 12,60,00,000/- (twelve crores and sixty lakhs only). Intention was to withdraw said amount of Rs. 12.60 crores only since this Court had granted stay of the order of the High Court on May 25, 2017. In fact, only this amount was withdrawn thereafter leaving Rs. 1,40,00,000/- (one crore forty lakhs only) still in deposit as EMD amount. This was a bona fide statement made to withdraw the said amount as Respondent no. 5 did not want to block the said money till the settlement of dispute and he had all intention to give back the said money in case order of the High Court is sustained. Therefore, there was no intention to withdraw from the bid itself.10. Prima facie, we find that the submission of Mr. Sinha is correct. On May 29, 2017, when the matter was taken up for arguments on application filed by Respondent no. 5 for vacation of the stay, order was passed on May 25, 2017 and this Court was not inclined to vacate the stay, counsel for Respondent no. 5 had stated that he wanted to withdraw from the auction and this was recorded in the order. Thereafter, the learned counsel for Respondent no. 5 mentioned the matter at the end of the list but at that time Mr. Sinha, learned senior counsel for the appellant was not present. It is for this reason, he mentioned the matter on June 06, 2017 and on that day following order was passed:"Shri Ajit Kumar Sinha, learned senior counsel has produced two orders dated 29th May, 2017 and stated that the second order was passed in his absence.There seems to be some error in the second order passed on 29th May, 2017. When the first order was passed learned counsel stated on instructions received from the applicant that he will withdraw from the auction. At that time, Mr. Ajit Kumar Sinha, learned senior counsel was present and did not raise any objection.On the same date, the matter was again mentioned by the learned counsel or the applicant and he had submitted that the applicant may also be permitted to withdraw the amount deposited by the applicant when he had submitted that bid.When the second order was passed Mr. Ajit Kumar Sinha was not present and his presence was wrongly marked. However, no request was made on behalf of the applicant that he may be permitted to take part in the auction. We therefore, clarify that the applicant has been permitted to withdraw from the auction and also to withdraw the amount which he had initially deposited with his bid, but was not permitted to take in the auction."11. In this order which was passed in the presence of counsel for Respondent no. 5, it is specifically clarified that the Respondent no. 5 had been permitted to withdraw from the auction and also to withdraw the amount which he had initially deposited with his bid. Generally, one has to go by the record and as per the order sheet reproduced above it is noted that Respondent no. 5 had been permitted to withdraw from the auction as well.12. Notwithstanding the above, we have examined the matter on merits as well and are of the opinion that the order of the High Court warrants to be interdicted. The valuation report has fixed the value at Rs. 13000 per MT as the price of the Met Coke which is exclusive of other charges and taxes etc. Therefore, the High Court is not correct in its observations that the amount was inclusive of other charges and taxes. May be some confusion is created by the public notice that was published for inviting bids as it does not categorically state as to whether the reserve price of Rs. 13000/- per MT was exclusive of or inclusive of the taxes. Fact remains that when as per the valuation report, the reserve price is fixed at Rs. 13000/- per MT without taxes etc., the offer of Rs. 14000/- per MT, after excluding the taxes would be well below Rs. 13000/- per MT. Calculations which are given by the appellant of charges and taxes payable, which is not refuted by Respondent no. 5, are as under:chart13. Therefore, it would be impermissible to accept the offer of Respondent no. 5 which turned out to be in the sum of Rs. 8895.15 paisa per MT.14. It is clear that value of Met Coke is much higher (which gets substantiated by the valuation report as well) and may be for this reason Siona Enterprises came forward with much higher offer, i.e., Rs. 14,500/- per MT exclusive of taxes. Though, High Court was right in rejecting that offer on technical grounds, this fact is emphasised to point out that the goods in question are capable of receiving much higher price. It would, therefore, be in the overall interest of the parties to have fresh auction.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]10. Prima facie, we find that the submission of Mr. Sinha is correct. On May 29, 2017, when the matter was taken up for arguments on application filed by Respondent no. 5 for vacation of the stay, order was passed on May 25, 2017 and this Court was not inclined to vacate the stay, counsel for Respondent no. 5 had stated that he wanted to withdraw from the auction and this was recorded in the order. Thereafter, the learned counsel for Respondent no. 5 mentioned the matter at the end of the list but at that time Mr. Sinha, learned senior counsel for the appellant was not present.In this order which was passed in the presence of counsel for Respondent no. 5, it is specifically clarified that the Respondent no. 5 had been permitted to withdraw from the auction and also to withdraw the amount which he had initially deposited with his bid. Generally, one has to go by the record and as per the order sheet reproduced above it is noted that Respondent no. 5 had been permitted to withdraw from the auction as well.12. Notwithstanding the above, we have examined the matter on merits as well and are of the opinion that the order of the High Court warrants to be interdicted. The valuation report has fixed the value at Rs. 13000 per MT as the price of the Met Coke which is exclusive of other charges and taxes etc. Therefore, the High Court is not correct in its observations that the amount was inclusive of other charges and taxes. May be some confusion is created by the public notice that was published for inviting bids as it does not categorically state as to whether the reserve price of Rs. 13000/per MT was exclusive of or inclusive of the taxes. Fact remains that when as per the valuation report, the reserve price is fixed at Rs. 13000/per MT without taxes etc., the offer of Rs. 14000/per MT, after excluding the taxes would be well below Rs. 13000/. Therefore, it would be impermissible to accept the offer of Respondent no. 5 which turned out to be in the sum of Rs. 8895.15 paisa per MT.14. It is clear that value of Met Coke is much higher (which gets substantiated by the valuation report as well) and may be for this reason Siona Enterprises came forward with much higher offer, i.e., Rs. 14,500/per MT exclusive of taxes. Though, High Court was right in rejecting that offer on technical grounds, this fact is emphasised to point out that the goods in question are capable of receiving much higher price. It would, therefore, be in the overall interest of the parties to have fresh auction.