Andhra HC (Pre-Telangana)
State Bank Of Hyderabad vs Andhra Pradesh Industrial Development ... on 3 July, 1996
Equivalent citations: 1998(6)ALD223, 1998(4)ALT781, [1999]98COMPCAS612(AP)
Author: B. Sudershan Reddy
Bench: B. Sudershan Reddy, S.S. Mohammed Quadri
JUDGMENT B. Sudershan Reddy, J.
1. The petitioner, State Bank of Hyderabad, prays for an appropriate writ, order of direction more particularly one in the nature of writ of mandamus directing respondents Nos. 1 and 2 herein to sell the assets of the third respondent-company after revaluation of the assets in consultation with the bank. The petitioner also prays for a further consequential declaration declaring the sale of the assets of the third respondent in favour of the seventh respondent as illegal and void.
2. Before we take up the, rival contentions that were urged before us, it would be appropriate to notice relevant facts required for the adjudication.
3. The petitioner-bank along with respondents Nos. 1 and 2 sanctioned an amount of Rs. 53 lakhs, Rs. 71.39 lakhs and Rs. 33.02 lakhs, respectively, to respondents Nos. 3 to 6 herein under various heads such as medium term loan, working capital, term loan, etc., to establish an industry. The petitioner and respondents Nos. 1 and 2 constitute a consortium and it is stated that the first respondent-corporation is the leading institution. The loan was sanctioned as early as in December, 1984. Respondents Nos. 3 to 6 failed to discharge their obligation and to repay the loan due to the petitioner and respondents Nos. 1 and 2. The petitioner filed a suit, O. S. No. 151 of 1991, and obtained a decree. It is relevant to notice that even during the pendency of the suit, the first respondent-corporation, in exercise of the powers conferred upon it under section 29 of the State Financial Corporations Act, 1951 (for short "the Act"), seized the assets and took over possession of the third respondent unit on June 13, 1991.
4. Thereafter, an advertisement was issued some time in the year 1991 itself for sale of the said unit on loan/outright basis and tenders were invited from interested persons. The seventh respondent herein offered to purchase the said unit for a sum of Rs. 101 lakhs on various terms and conditions. But it was not acceptable to the first respondent-corporation and the offer, though the highest, was rejected on November 27, 1991. Another advertisement was issued and the same got published in the Deccan Chronicle dated January 12, 1992, and in the Economic Times dated January 13, 1992, once again proposing to sell the unit on loan/outright basis and tenders were invited from interested persons. The tenders were opened on January 31, 1992, and once again the seventh respondent was the highest offerer, but the sale could not be concluded as the terms were not agreeable to the first respondent-corporation and a decision was taken to re-advertise by the first respondent-corporation in its meeting held on February 25, 1992, and another advertisement so released by the first respondent-corporation was published on March 4, 1992. Though four offers were received pursuant to the said advertisement and after protracted negotiations, the offer of Rs. 76 lakhs by the seventh respondent was accepted by the first respondent-corporation on March 31, 1992. Thus, the offer of the seventh respondent was accepted and the unit was sold for a sum of Rs. 76 lakhs.
5. In the instant writ, petition, it is complained by the petitioner that in spite of its objections, the sale of the unit was finalised at such a low price by the first respondent. It is stated that the first respondent sought for the consent of the petitioner by its letter dated March 26, 1993, for selling the unit, to which the petitioner replied requesting the first respondent to get the assets of the third respondent unit valued by an approved valuer and determine the rate. It is stated that in spite of several protests, the first respondent went ahead with the selling of the unit and by letter dated May 13, 1993, the first respondent-corporation asked for the consent of the petitioner's bank within three days. It is asserted that the unit can be sold at a much higher rate and according to its sources of information the assets of the third respondent unit were worth more than Rs. 1,66,00,000. It is the case of the petitioner that the seventh respondent himself offered Rs. 1,07,00,000 earlier for the same unit and without any reason, the first respondent-corporation sold the very unit to the same seventh respondent for a sum of Rs. 76 lakhs.
6. The first respondent herein filed a detailed counter-affidavit as to how and in what circumstances, the seventh respondent's offer for purchasing the unit at Rs. 76 lakhs was accepted by the corporation. There is no need to refer to the details in this regard except to refer to the averments made in the counter-affidavit to the effect that the highest offer of the seventh respondent for Rs. 101 lakhs as against the valuation of assets of Rs. 166.96 lakhs could not be accepted, as the other terms and conditions of the offer were totally against the standard norms of the sale. The standard norms then prevailing were (a) 25 per cent. down payment of the sale consideration, (b) repayment of the balance sale consideration over a period of three years carrying interest at the prevailing rates. Whereas the terms offered by the seventh respondent were that a sum of Rs. 4 lakhs only as an initial payment, Rs. 5 lakhs after 45 days, Rs. 15 lakhs after six months, balance loan to be paid in instalments to be determined to commence repayment after one year from the date of commercial production and the amount paid to be adjusted against the principal portion of the sale consideration and the interest accrued would be accounted for separately which will be paid after repayment of the principal amount. Certain other conditions were also laid down by the seventh respondent and all those conditions were totally unacceptable to the first respondent-corporation. Pursuant to the readvertisement, the seventh respondent again offered the highest 'amount amongst five parties. Negotiations were held and the seventh respondent finally increased its offer to Rs. 76 lakhs with 20 per cent. down payment and treating the balance 80 per cent. as term loan. But even this was not acceptable to the first respondent-corporation. Pursuant to the third notification, the seventh respondent again quoted Rs. 71.41 lakhs. But in the negotiations the price was finally increased to Rs. 76 lakhs and the same was accepted in a meeting of the consortium held on March 17, 1992, in which the petitioner's representative, Smt. Meera Deshpande, Branch Manager, Begumpet, Hyderabad, was also present and took part in the discussion.
7. The first respondent in its counter-affidavit states that decision was taken keeping in mind the loss of time resulting in depletion of the value of the assets, the dim prospects of finding purchasers for better consideration and more advantageous terms of sale and also the heavy cost of each advertisement. These factors weighed with the corporation to accept the offer of the seventh respondent.
8. It is also stated that no consent whatsoever was sought at any point of time by the first respondent and the petitioner has no right whatsoever under the pari passu agreement to question the action taken by the respondent-corporation to realise the said loan in exercise of its power under section 29 of the said Act. It is stated that all relevant commercial considerations were kept in mind and a decision was taken by the corporation to sell the unit to the seventh respondent in the best interest of all concerned. There was no possibility of getting any better price. It is also stated that the motive cannot be attributed to the first respondent and there is nothing unreasonable or unfair on its part in conducting the sale and accepting the seventh respondent's offer.
9. The seventh respondent also filed counter-affidavit stating that its offer for a total consideration of Rs. 76 lakhs was duly accepted by the respondent-corporation subject to certain conditions as were set out in its letter dated March 30, 1992, and all the conditions stipulated therein including down payment of 20 per cent. on March 31, 1993, were complied with. It is also stated that the seventh respondent immediately opened a new company on March 30, 1993, itself and had undertaken several repairs for the revival of the work including for getting the power released and huge amounts were spent. It is also stated that having waited for a considerable period without any protest and having participated in the negotiations, it is not open to the petitioner to raise any objection at this point of time.
10. In the additional affidavit filed on March 1, 1996, it is stated that it had already spent Rs. 15.50 lakhs to carry on the repairing works of plant and machinery apart from paying further amount to A.P.S.E.B. for supply of power and the costs incurred for erecting a transformer at the cost of Rs. 1,00,000. It is also stated that on account of the high-handed action of the writ petitioner in stalling the proceedings, the petitioner is made liable to pay the sale amount which is treated as term loan at the rate of 20 per cent. interest per annum with its compoundable quarters.
11. V. V. Krishna Murthy, learned counsel for the petitioner, submits that the sale of the third respondent unit in favour of the seventh respondent is totally vitiated as there was no proper publicity, on account of, which there was no proper, response from the intending purchasers. Public auction ought to have been held instead of inviting tenders. The action of the first respondent in accepting the offer of the seventh respondent is totally unreasonable and unfair resulting in heavy loss not only to the petitioner but to respondents Nos. 1 and 2 also. It is further urged that the sale without the consent of the petitioner is void as it is contrary to the terms and conditions agreed to by the consortium of the petitioner and respondents Nos. 1 and 2 as evidenced by the pari passu agreement. It is also urged that there was no justification whatsoever on the part of the respondent-corporation in refusing to accept the highest offer of the very seventh respondent for a sum of Rs. 101, lakhs and accepting the offer of Rs. 76 lakhs.
12. On the other hand, C. V. Mohan Reddy, learned counsel appearing for the first respondent corporation, submits that there is nothing unreasonable and arbitrary on the part of the first respondent are selling the property in question for a sum of Rs. 76 lakhs on agreed terms land conditions as it was the best under the circumstance. All commercial considerations like any other prudent businessman were kept in mind in confirming the sale. It is also, submitted by learned counsel, that the petitioner cannot be allowed to raise any objection at this point of time, as it had earlier not raised any objection in the matter. The first respondent's action, according to learned, counsel is reasonable in, the circumstances and absolutely fair and free, from any arbitrary manner.
13. The only point that arises for consideration in the instant writ petition is as to whether the sale of the third respondent unit in favour of the seventh respondent is proper, legal and fair in the circumstances ?
14. There is nothing on record to suggest that the sale of the unit, by the first respondent can be said to be vitiated in any manner whatsoever. The affidavit filed by the petitioner in support of the writ petition is bereft of any detail and vague assertions are made. Nothing is stated as to how and for what reason the sale could, be termed as Void and illegal. The offer of the seventh respondent pursuant to the advertisement issued in 1991, and January, 1992, though highest for a sum of Rs. 101 lakhs was not accepted by the first respondent-corporation, as, the conditions imposed by the seventh respondent along with the offer were found to be contrary to the norms stipulated by the first respondent-corporation. It is stated in categorical terms and clearly demonstrated as to how the acceptance of the said offer of Rs. 101 lakhs together with other conditions of mode of payment would have resulted in serious loss to all the financial institutions. The very fact that three advertisements were issued by the first respondent-corporation would itself show that it was anxious to get the best price as sale consideration for the unit. It appears that all its actions were transparent and clearly accounted fort. The twin requirements of transparency and accountability in the matter of disposing of property by way of a public auction sale by the State or its instrumentality are satisfied in the instant case.
15. However, learned counsel for the petitioner placed reliance upon the decision of the Supreme Court in Mahesh Chandra v. U.P. Financial Corporation , and submits that the action in the instant case is contrary to the guidelines laid down by the Supreme Court. It would be apt to refer to the guidelines laid down by the Supreme Court in the same case (page 16 of 78 Comp Cas) :
"Every endeavour should be made, to make the unit viable and be put in working condition. If it becomes unworkable :
(1) Sale of a unit should always be made by public auction.
(2) Valuation of a unit for purposes of determining adequacy of offer or for determining if bid offered was adequate, should always be intimated to the unit holder to enable him to file objection if any as he is vitally interested in getting the maximum price.
(3) If tenders are invited then the highest price on which tender is to be accepted must be intimated to the unit holder.
(4) (a) If the unit holder is willing to offer the sale price, as the tenderer, then he should be offered same facility and the unit should be transferred to him. And the arrears remaining thereafter should be rescheduled to be recovered in instalments with interest after the payment of last instalment fixed under the agreement entered into as a result of tendered amount.
(b) If he brings third parties with higher offer it would be tested and may be accepted.
(5) Sale by private negotiation should be permitted only in very large concerns where investment runs in very huge amount for which the ordinary buyer may not be available or the industry itself may be of such nature that normal buyers may not be available. But before taking such steps there should be advertisements not only in the daily newspapers but business magazines and papers.
(6) Request of the unit holder to release any part of the property on which the concern is not standing of which he is the owner should normally be granted on condition that sale proceeds shall be deposited in loan account."
16. The Supreme Court further held that the sale by public auction, tenders or private negotiations should be bona fide action and the. authority should justify the action assailed on the touchstone of justness, fairness, reasonableness and as a reasonable prudent owner. In a nutshell the Supreme Court held that, while exercising power under section 29 of the Act, either in the matter of taking possession of a defaulting unit or its transfer should be exercised in an honest, fair and reasonable manner. The corporation should not act like an ordinary money lender.
17. It would be relevant to note that the said guidelines were laid down by the Supreme Court in a matter where the action was questioned by the defaulter unit holder himself in which the defaulter wrote repeated letters to the corporation requesting to release a portion of the property so as to enable him to negotiate for private sale of it to pay off the debt and in pursuance of the oral promise made by the corporation to release a portion of the property, he paid a sum of Rs. 65,000 which was received by the corporation. The defaulter also promised to pay a further sum of Rs. 50,000. The corporation having accepted the amount did not release the property. In such view of the matter, the Supreme Court laid down the guidelines in the matter of seizure of the plant and the machinery, taking possession and sale by the corporation in exercise of its power under section 29 of the Act. We fail to appreciate as to how the said judgment could render any assistance to the petitioner. We fail to appreciate the action of the petitioner in filing the instant writ petition particularly after accepting its share of amount deposited by the seventh respondent towards earnest money.
18. In another judgment relied upon by learned counsel for the petitioner in U.P. Financial Corporation v. Gem Cap (India) P. Ltd. [1995] 78 Comp Cas 408; AIR 1993 SC 1435, the Supreme Court held (page 414 of 78 Comp Cas) :
"It is true that the appellant-corporation is an instrumentality of the State created under the State Financial Corporations Act, 1951. The said Act was made by Parliament with a view to promote industrialisation of the States by encouraging small and medium industries by giving financial assistance in the shape of loans and advances, repayable within a period not exceeding twenty years from the date of loan. We agree that the corporation is not like an ordinary money lender or a bank which lends money. It is a lender with a purpose - the purpose being promoting the small and medium industries. At the same time, it is necessary to keep certain basic facts in view. The relationship between the corporation and the borrower is that of creditor and debtor. The corporation is not supposed to give loans once and go out of business. It has also to recover them so that it can give fresh loans to others. The corporation no doubt has to act within the four comers of the Act and in furtherance of the object underlying the Act. But this factor cannot be carried to the extent of obligating the corporation to revive and resurrect every sick industry irrespective of the cost involved. Promoting industrialisation at the cost of public funds does not serve the public interest; it merely amounts to transferring public money to private account. The fairness required of the corporation cannot be carried to the extent of disabling it from recovering what is due to it. While not insisting upon the borrower to honour the commitments undertaken by him, the corporation alone cannot be shackled hand and foot in the name of fairness. Fairness is not a one way street, more particularly in matters like the present one. The above narration of facts shows that the respondents have no intention of repaying any part of the debt. They are merely putting forward one or other ploy to keep the corporation at bay. Approaching the courts through successive writ petitions is but a part of this game. Another circumstance. These corporations are not sitting on King Solomon's mines. They too borrow monies from Government or other financial corporations. They too have to pay interest thereon. The fairness required of it must be tempered - nay, determined-in the light of all these circumstances. Indeed, in a matter between the corporation and its debtor, a writ court has no say except in two situations : (1) there is a statutory violation on the part of the corporation or (2) where the corporation acts unfairly, i.e., unreasonably. While the former does not present any difficulty, the latter needs a little reiteration of its precise meaning. What does acting unfairly or unreasonably mean ? Does it mean that the High Court exercising its jurisdiction under article 226 of the Constitution can sit as an appellate authority over the acts and deeds of the corporation and seek to correct them ? Surely, it cannot be. That is not the function of the High Court under article 226. The doctrine of fairness, evolved in administrative law was not supposed to convert the writ courts into appellate authorities over administrative authorities. The constraints-self-imposed undoubtedly-of writ jurisdiction still remain. Ignoring them would lead to confusion and uncertainty. The jurisdiction may become rudderless.
The obligation to act fairly on the part of the administrative authorities was evolved to ensure the rule of law and to prevent failure of justice. This doctrine is complementary to the principles of natural justice which the quasi-judicial authorities are bound to observe. It is true that the distinction between a quasi-judicial and the administrative action has become thin, as pointed out by this court as far back as 1970, in A. K. Kraipah v. Union of India, . Even so the extent of judicial scrutiny/judicial review in the case of administrative action cannot be larger than in the case of quasi-judicial action. If the High Court cannot sit as an appellate authority over the decisions and orders of quasi-judicial authorities it follows equally that it cannot do so in the case of administrative authorities. In the matter of administrative action, it is well known, more than one choice is available to the administrative authorities; they have a certain amount of discretion available to them. They have 'a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred' (Lord Diplock in Secretary of State for Education v. Tameside Metropolitan Borough Council, 1977 AC 1014, at page, 1064. The court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the court intervene. To quote the classic passage from the judgment of Lord Greene M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 KB 223, at page 229 :
'It is true the discretion must be exercised reasonably. Now what does that mean ? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word "unreasonable" in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting "unreasonably". Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority'.
While this is not the occasion to examine the content and contours of the doctrine of fairness, it is enough to reiterate for the purpose of this case that the power of the High Court while reviewing administrative action is not that of an appellate court, The judgment under appeal precisely does that and for that reason is liable to be and is hereby set aside,"
19. It has been repeatedly held by this court and the apex court that the court exercising its jurisdiction under article 226 of the Constitution of India, does not sit in appeal over the action and the orders of the statutory or administrative authority. The court does not substitute its own view for that of the authorities concerned : In a judicial review proceeding, the court is more concerned with the decision making process and not with the merits of the decision itself. If any illegality or irregularity is committed by the concerned authority in exercising its power and in the process acts in an arbitrary and unfair manner, the court will definitely interfere and issue necessary directions.
20. What could be the best price a property of a defaulter subjected to proceedings under section 29 of the said Act would get in the circumstances, cannot be decided by the court. It may depend upon a variety of circumstances and it may not be possible to lay down any detailed guidelines in this regard. Suffice it to hold that the sale of the property by the corporation in exercise of its power under section 29 of the said Act should be a bona fide one and in the public interest. It should be transparent and being an instrumentality of the State, like its all other actions, it should be fair, just and reasonable.
21. In U.P. Financial Corporation v. Naini Oxygen and Acetylene Gas Ltd. , the apex court held that (page 680) "it is not for the courts or a third party to substitute its decision, however more prudent, commercial or business like it may be, for the decision of the corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the corporation, the same cannot be assailed for;making the corporation liable", and the apex court further said (page; 681) "we are, therefore, of the view that this is not a matter where the High Court should have stepped in and substituted its judgment for the judgment of the corporation which should be deemed to know its interests better whatever the sympathies the court had for the prosperity of the company. In matters commercial, the courts should not risk their judgments for the judgments of the bodies to whom that task is assigned."
22. Learned counsel for the petitioner further relied upon a Division Bench decision of this court in V. Gopal Reddy v. Andhra Pradesh State Financial Corporation (DB) in support of his submission that the first respondent-corporation should act fairly and reasonably. There is no dispute about this proposition and we fail to appreciate as to how this judgment could render any assistance to the petitioner. The short question that arose for consideration before the Division Bench was as to whether the sale-cum-recall notice issued in the name of the deceased loanee was proper or not the loanee V. Koti Reddy had died to the knowledge of the finance corporation, yet sal-cum-recall notice issued on December 8, was not issued to the legal representatives of the loanee, but in the name of the, deceased loanee. Notice has been issued to a dead person in the matter of sale of the unit. The appellant therein the legal representative of the deceased Koti Reddy has been urging upon the respondent-corporation bringing the fact of death of the loanee Koti Reddy. Therefore, the proceedings that were initiated against the, deceased loanee ignoring the claims of the legal representatives were the subject-matter of controversy and the Division Bench in such view of the matter held (page 506) :
"It is in this context of the role of financial corporations as 'State' that they are obliged to conform to the requirement, of natural justice in discharge of their actions which must satisfy the test of having acted fairly. There must be lack of arbitrariness or unreasonableness in their actions and if such is the complaint which, on the statement of facts appears to, be correct, the High Court, in discharging its constitutional obligations, would be under a duty to apply corrective measures for putting the corporation back to the right path so as to enable it to modulate its actions and reach the decisions in a proper manner, answering the demands of rule of law. The power under section 29 of the Act has been held, to which we shall presently refer, as being not available to be resorted to merely for the asking of it or in a routine manner but as a matter of last resort and as arising out of a compelling necessity. Even when a unit is sick policies have been evolved by the State, both at the Central and State levels, for revival of the units. Even where sale of a unit becomes an absolute necessity, yet in the matter of conducting of the sale the same rule of fairness, incorporating in itself the rule of natural justice, has to be followed and the person whose unit is to be sold is required to be noticed so that he can be present at the auction to safeguard his interests since it is his interest to see that the unit is neither undervalued nor undersold and that a proper price is obtained so that he may ultimately gain after reimbursement of the loan amount. He may also bring customers on his own who ave prepared to pay a higher price and hence adequate opportunity must be afforded to him. Even if the sale is to be finalised on the basis of negotiations or by invitation of tenders, similar opportunity has to be made available to him. The matter was examined by the Supreme Court in Mahesh Chandra v. U.P. Financial Corporation [1993] 78 Comp Cas 1 wherein guidelines/directions were issued for taking action under section 29. So far as the present case is concerned, it does not appear that the valuation determined by the engineer of the unit was intimated to the appellant nor the valuation was indicated in the sale notice of April 22, 1990. The highest price at which the tender was sought to be accepted was not intimated to, the appellant and opportunity to him to offer the sale price so that the unit could be transferred to him was not made and he did not have the opportunity also to bring in higher bidders. When the matter was sought to be settled by negotiations, no date was fixed for the purpose nor advertisement was made in the papers nor the fact that the amount was to be settled by negotiation was brought to the notice of the appellant for him to be present or to bring in more persons who could have given higher offers."
23. This is yet another case where the action of the A.P. State Financial Corporation was called in question at the instance of defaulter/loanee and in that context the Division Bench following the earlier judgments of the Supreme Court held that the actions of the financial, corporation are to be in conformity with the requirements of natural justice in discharge of its action and it should satisfy the test of having acted fairly, reasonably and not arbitrarily.
24. Can it be said that the first respondent-corporation acted in an unreasonable or arbitrary manner in the instant case ?
25. Petitioner's learned counsel time and again referred to the memorandum of pari passu arrangement between the members of the consortium and submits that under the said arrangement the first respondent was bound to obtain the consent of the petitioner and then only confirm the sale or auction. We do not find any such covenant in the memorandum of pari passu arrangement and assuming that there is such a clause, the petitioner cannot invoke the extraordinary jurisdiction of this court under article 226 of the Constitution of India for enforcing the covenants in the agreement entered into by and between the parties. The memorandum of pari passu agreement has no force of law or statute so as to be enforced by this court in exercise of its jurisdiction under article 226 of the Constitution of India. The remedy, if at all, lies elsewhere. However, learned counsel refers to the letter addressed by the petitioner to the first respondent on September 16, 1992, informing the first respondent that the terms/conditions laid down for the sale of assets belonging to the third respondent are not acceptable to it. But it would be relevant to refer to the minutes of the adjourned meeting of all the three institutions held on December 24, 1992, in which the petitioner's representative Mrs. Meera Deshpande, Branch Manager, Begumpet, Hyderabad was also present. The minutes emphatically refer to the agreement of the petitioner in principle for the sale of assets of Dakshin Fabrics Ltd. under section 29 of the Act in favour of Finman Finance and Leasing Limited. No doubt some further suggestions were made on behalf of the petitioner, but the sale as such in favour of the seventh respondent was never questioned by the petitioner. Therefore, the letter dated September 16, 1992, upon which reliance is placed by learned counsel for the petitioner is of no consequence. The objection, if any the petitioner had on September 16, 1992, is deemed to have been waived as the petitioner in principle had agreed for the sale of the unit to the seventh respondent. It would be significant to refer to the letter of the first respondent addressed to the petitioner on January 8, 1993, wherein elaborate reasons are given with regard to the suggestions made on behalf of the petitioner in the meeting held on December 24, 1992, and the petitioner was requested to consider the situation and give concurrence for the sale of the unit in favour of the seventh respondent. The letter is admittedly received by the petitioner. The petitioner kept quiet for a period of more than four months and filed the instant writ petition on May 26, 1993. We are not impressed by the criticism levelled by the petitioner against the first respondent in not accepting the offer of Rs. 110 lakhs by the seventh respondent. The conditions attached to the said offer of the seventh. respondent as a business proposition was totally unacceptable to the first respondent as they were said to be totally contrary to the normal procedure in such matters. For good reasons, we do not find anything arbitrary on the part of the first respondent-corporation in not accepting the said offer.
26. It is evident that in all the three advertisements issued by the first respondent-corporation inviting tenders from the interested buyers the terms and conditions were clearly notified for the information of the intending buyers. We are satisfied that all possible efforts were made by the first respondent-corporation to secure the highest price and the sale in favour of the seventh respondent was the best in the circumstances. There was no secrecy whatsoever involved and there is not even an allegation of any collusion between the first respondent and seventh respondent. An opportunity to participate in the negotiations was given to all the parties, who submitted the tenders, but except the seventh respondent all other parties did not participate in the negotiations as it is evident from the minutes of the negotiations meeting held on March 17, 1992, in which the petitioner's representative also participated. Admittedly these minutes were once again conveyed to the petitioner by the first respondent-corporation through its letter dated March 30, 1992.
27. During the course of the hearing of the writ petition, we wanted to know from learned counsel for the petitioner as to whether there is any buyer with the respondent-bank who would offer a better price than that of seventh respondent and learned counsel fairly submitted that the petitioner does not have any buyer or any other better proposal, which could fetch more amount and on the other hand, learned counsel for the seventh respondent offered again a sum of Rs. 101 lakhs but subject to the same terms and conditions as earlier indicated by him. We have already indicated that it is not for this court to substitute its own opinion particularly for that of the financial institution concerned when the first respondent is clear that the acceptance of the said offer, though on the face of it looks higher would result in loss to the financial institutions. It is also brought to our notice that after paying 20 per cent. of the sale consideration, the seventh respondent is said to have spent huge amounts for reviving the unit, though no possession as such was handed over to it, in view of the interim order passed by this court. There cannot be any doubt that the sale was finalised and was acted upon by all the parties concerned.
28. We are also of the view that the interest of the petitioner-bank is protected as it had already filed a suit and obtained a decree against respondents Nos. 3 to 6 and the guarantors therein. It is always open to the petitioner to execute the decree and realise further amounts, if any apart from getting its own share out of the sale proceeds to be paid by the seventh respondent.
29. For the aforesaid reasons, we do not find any merit in the writ petition and the same is accordingly dismissed but in the circumstances without costs.