Yogesh Mehta vs Custodian Appointed Under The Special ...

Before adverting to the questions as also the fact involved in each of these matters, we may at the outset notice that one Harshad Mehta was a person notified under the Act. The private respondents herein being his relatives were also notified (hereinafter referred to as 'the notified parties'). Apart from late Harshad S. Mehta, the Custodian had notified 29 entities in terms of Section 3 of the said Act, inter alia, comprising three of his younger brothers, his wife, wives of two of his younger brothers.

In the proceedings initiated before the Special Court various applications were filed. Properties belonging to the said late Harshad S. Mehta or other notified entities were put on auction. The auctioned properties comprised of commercial as also the residential ones. The residential properties, inter alia, were situate at Madhuli.

(xi) The learned Judge, Special Court shall take up the matter relating to confirmation of the auction sale in respect of the commercial properties immediately and pass an appropriate order thereupon within four weeks from the date of receipt of copy of this order. If in the meanwhile, the orders of assessment are passed by the Income Tax Authorities, the Custodian shall be at liberty to bring the same to the notice of the learned Special Court which shall also be taken into consideration by the learned Judge, Special Court."

9. Within 60 days from the Hon'ble Special Court granting sanction to the sale, the Purchaser shall pay the balance of the purchase price and he/she will have to take possession/delivery of the said property from the Custodian at his/her own costs and risks.

12. If the purchaser does not pay the balance amount of the purchase price in the manner and within the time provided herein or the time specified by the Custodian or in any other respect fails to perform these conditions or any of these, the Custodian shall be at liberty to forfeit initial deposit made as per para 4 above and shall then proceed to resell the said property by public auction at such time subject to such conditions and in such manner as the Custodian shall deem fit and proper without previously giving any notice to the purchaser and the deficiency in price if any, occasioned by such resale together with all costs charges and expenses pertaining to the resale shall be made good by the defaulting purchaser and be recovered by the Custodian with interest on the amount of deficiency at the rate of 18% per annum from the expiration of the date of the aforesaid sanction of sale till payment and in the event of non payment of the whole or any part or any part thereof such sum, the same shall be recoverable by the Custodian from the defaulting Purchaser as and by way of liquidated damages while any excess on such resale shall not be available to such defaulting Purchaser as and by way of liquidated damages while any excess on such resale shall not be available to such defaulting purchaser. This condition shall be without prejudice to Custodian's right and remedies, which the Custodian shall otherwise have in law and/or under these conditions.

16. Upon payment of the purchase price in full and all costs, charges and expenses mentioned above, Custodian's authorized representative shall sign such papers and documents as may be necessary for transfer of the said property in the name of the Purchaser. Such documents of transfer shall be prepared and executed by and at the cost, charges and expenses of the Purchaser.

Before us a chart has been submitted, from a perusal whereof it appears that even the purchasers of commercial properties made final payments within the period 14.07.2004 and 05.01.2005. No payment, therefore, was said to have been made within a period of sixty days from the date of auction i.e. 05.04.2005.

We, therefore, are of the opinion that the impugned order cannot be sustained.

In Misc. Petition No. 41 of 1999, evidently a consent order had been passed behind the back of the appellants. The said order, therefore, cannot also be sustained.

There is another aspect of the matter which also cannot be lost sight of. Forfeiture of the earnest money, in our opinion, in the aforementioned situation, could not have been directed.

Oppenheim (1950) 1 KB 616].""