Rajasthan High Court - Jaipur
Chetak Electric And Iron Industries vs Rajasthan Finance Corporation on 25 July, 1997
Equivalent citations: AIR1998RAJ42
ORDER
1. Both the writ petitions have been filed by the same petitioner for the similar relief against the RFC, therefore, they are being decided together.
2. As stated by the petitioner in the writ petition, the petitioner firm was registered as Small Scale Industry for the manufacturing of Washing Machine, Cooler Kits etc. The petitioner had moved before respondent RFC for sanctioning the loan of Rs. 5 lacks in respect of Industrial project and ultimately vide Annexure 4, total loan of Rs. 3,90,000/- was sanctioned by the respondent. There was some defaults on behalf of the petitioner and the petitioner was issued a notice under Section 30 of the State Financial Corporation Act, 1951 (hereinafter referred to be as "Act of 1951") for payment of the amount as mentioned in Annexure 5. A request was made on behalf of the petitioner for taking a lenient view in regard to payment vide the letter Annexure 6. However, the respondent Corporation proceeded to take possession of the fixed assets including the land, plant and machineries on 2-3-1995 and subsequently on 25-9-1995, the respondent Corporation invited tenders regarding the sale of building, plant and machinery, one of copy of notice dated 25-9-1995 is attached as Annexure 7. It is stated by the petitioner that notice itself shows that maximum offer which had been received by the respondent was Rs. 3.5 lacks. The auction of the unit was scheduled to be held on 18-10-1995 as per notice Annexure 7. It is stated that notice was vague as on one hand, in the same advertisement, auction was announced and on the other hand, teachers were invited as is clear from clause (d) of the advertisement and it was also mentioned that negotiations will take place with the tenderers. It is submitted that except in the news-papers, notice of auction was not published in any other papers; with the result that there was not wide publicity done, the bidders could not take part in the auction and then auction was put-off. The petitioner had taken an objection that value of unit was not less than Rs. 5,50 lacks at that time and the cost of Machines and Electric fitting was over and above of that. The objection taken by the petitioner was dated 15-10-1995, attached as Annexure 9 and registered receipt is marked as Annexure 10. The writ petition was filed on the ground that respondent was making secret deal with certain persons for disposal of the property in a most arbitrary and discriminatory manner. It was submitted that respondent had published the advertisement for the proposed auction only in one news-paper i.e. in "Rajasthan Patrika" and that too in Bikaner addition only and there was no wide publicity at all. It is alleged that land and building in question as advertisement were valued Rs. 5.50 lacks and the valuation of machinery was about Rs. 7 lacks. Prayer was made to restrain the respondent for holding the auction.
3. During the pendency of the writ petition, another writ petition bearing S.B. Civil Writ Petition No. 232/96 was filed with the additional fact that petitioner had requested the respondent to adjust the subsidy due to the petitioner of Rs. 43,000/- towards the loan. After the scheduled auction on 18-10-1995, when no bidders had attended the auction, another auction was held on 5-12-1995 and a bid of total amount of Rs. 3.60 lacks as highest hid was received. It is alleged that as a matter of fact there was no auction held on 5-12-1995 and there was no publicity in the news-paper as required under the law. It has been stated by the petitioner that as a matter of fact respondent Ved Prakash was being handed over the property by way of private negotiations as Shri Ved Prakash had a clout with officers of respondent. It is stated by the petitioner that auction held for Rs. 3.61 lacks is wholly illegal for the reason that no proper publicity was made and even rules were violated. It is alleged that action was being taken against the petitioner with mischievous motive only to hand over the property to respondent Ved Prakash.
4. For deciding the case of the petitioner, the facts are being taken from S.B. Civil Writ Petition No. 232/96 i.e. subsequent writ petition filed by the petitioner. It is true that one advertisement was made in the news-paper "Rajasthan Patrika" of Bikaner Edition on 25-9-1995 for the said auction and the auction notice itself incorporates that it was a tender. Even though, in the body of news item, it was also mentioned that auction would also be held. It was also mentioned that negotiation would also be held on that date for the said property.
5. It is also high lighted that during the pendency of the writ petition, the petitioner had filed an application for impleading M/s. Vinayak Metal Udhyog, Sriganganagarthrough its partner Prem Kumar on the ground that even though the auction is said to have been finalised in favour of the respondent Ved Prakash, but during the pendency of the writ petition, respondent Corporalion had entered into an agreement to sell the assesl of the petitioner for sum of Rs. 3.61 lacks in favour of M/s. Vinayak Metals and even agreement has also been entered with M/s. Vinayak Metals scrupulously. This fact is not denied by the respondent and it has been stated by the respondent that even though the auction was finally accepted in favour of the respondent Ved Prakash, but because of the reason that said Ved Prakash had desired that property in question be transferred in favour of M/s. Vinayak Metals for the reason that Ved Prakash happens to be the Manager/employees of M/s. Vinayak Metals. The respondent Corporation is said to have accepted the money from M/s. Vinayak Metals and transferred the property to it and had entered into an agreement with M/s. Vinayak Metals which agreement dated 24-2-1996 has been placed on record. Because of reason that RFC has altered the position during the pendency of the writ petition when the matter was subjudice, any action taken by RFC by transferring the property by entering into an agreement with third party instead of Ved Prakash shall not effect the merits of the case as all the parties including M/s. Vinayak Metal shall be subject to the decision of writ petition being having entered into the agreement when the matter was subjudiced.
6. During the course of arguments, one Devendra Singh, proprietor of the petitioner firm had appeared and filed an affidavit that he is prepared to deposit the amount of auction i.e. 3.61 lacks and further had averred that respondent had agreed to sell the property to M/s. Vinayak Metal in collusively manner on throw away price without information to the petitioner.
7. Respondent has filed the written statement and it is stated that petitioner could not clear the liability despite repeated notices issued to him and, therefore, there was no alternative with the respondent RFC but to put a notice of auction and for that purpose a publication was made in Rajasthan Patrika of Bikaner Edition dated 25-9-1995 for disposing of the property by way of auction as well by tenders. It is staled in reply that not only tenders were invited, but auction was also sought to be made of the property of the firm which is clear from advertisement dated 25-9-1995.
8. It is further submitted that there was already an advertisement issued and published in Rajasthan Patrika on 12-3-1995, for this unit as per Annexure R/1 and the petitioner was also informed of this fact. The auction was again fixed for 21-6-1995, 23-8-1995 and advertisement was published in Nav Bharat Times dated 5-8-1995 for the auction to be held on 23-5-1995 as advertised.
9. It is stated that on 23-8-1995, two persons had appeared and gave auction. Highest bid money was of Rs. 3.55 lacks whereas respondent Ved Prakash had offered the bid of Rs. 3.61 lakhs as per proceedings of auction Annexure R/7. But ihe auction was not accepted and it was ordered to be auctioned again on 18 -10-1995 andhighest bid of Rs. 3.51 lakhs was received of the same person. In all the auction proceedings, only two persons were present i.e. one from M/s. Jangir Enterprises of Sriganganagar and another Shri Ved Prakash (respondent No. 3). The auction proceedings have been attached as Annexures R/7 and R/8 and ultimately after the advertisement Annexure R/9, auction was again held on 5-12-1995 and bid money was accepted and the highest auction of Rs. 3.61 lakhs made by respondent Ved Prakash was accepted as per Annexure R/12 by the Auction Committee.
10. For the reason that RFC had not attached any rules or regulation or instructions in regard to holding of the auctions and the proper proceedings of auction held at spot as well the procedure of publication as required under the rules and also as no record was produced to show whether any effort was made by the RFC for rehabilitating any unit by rescheduling the loan etc. it was felt necessary that RFC should produce complete record in regard to holding of the auctions, the concerned correspondence as well as rules and regulations.
11. The corporation has produced the conditions for holding of the auctions and the formalities to be complied with before auction is held, which are termed as F.Rs. 5. Clause 5.19 prescribes the procedure for the publicity and the advertisement to be made in Hindi local newspaper and, in one Stale level Daily Hindi newspaper and notice to be displaced on the notice board. The auction notice is required to be published in these papers at least 15 days before the actual date of auction. Under Clause 5.25. earnest money is to be deposited as specified under this clause and Clauses 5.29 to 5.32 prescribes the procedure of recording the auction and 5.38 prescribes for entering into an agreement for the intending purchasers. Relevant clauses are reproduced as under :--
5.19 : Publicity and Advertisement. Where the assets taken over in the possession are to be disposed of through public auction/by inviting sealed offers/lenders the Regional Office should arrange publication, of the sale notice in Hindi as under : (a) In a prominent Hindi Local Newspaper, (b) In one Stale level Daily Hindi Newspaper, (c) List of units available for sale be also displayed on Notice Board.
5.20 : Sale notice should be published in these papers at least 15 days before the actual date of auction/fixed to open offers/tenders.
5.25 : Earnest Money : Participants in the auction shall pay earnest money as under before the commencement of auction proceedings:--
(a) For balance outstanding upto R. 3.00 lacs Rs. 1000
(b) For balance outstanding over Rs. 3.00 lacs and upto Rs. 10.00 lacs Rs. 2000
(c) For balance outstanding over Rs. 10.00 lacs and upto Rs. 20.00 lacs Rs. 5000
(d) For balance outstanding over Rs. 20 lacs Rs. 10000 In case the sale is made through inviting sealed offers the earnest money should be 5% of the amount offered.
5.29 : Recording of Bids : All the bids received from the individual bidders/offers shall be recorded (proforma No. FR-36) 5.30 : Signature of bidders/offers should be taken against their bids and the refusal to bid higher should also be taken from second highest bidder on the bid sheet.
5.31 : Initial deposit by Highest Bidder : The highest bidder shall deposit 10% of the bid amount either in cash or through Demand Draft at the conclusion of auction /sale proceedings.
5.32 : Bio-Data of Two Highest Bidders : On the conclusion of the bids the convenor of the Auction Committee shall take the Bio-Data of first and second highest bidders (Proforma No. FR-37).
5.38 : Execution of Agreement to Sale : On receipt of the initial payment (as per terms and condition of the sale from intending purchaser, we shall be asked to enter into an agreement to sell."
12. The record has been perused. It is true that RFC was issuing notice to the petitioner for repayment of the instalments. The petitioner had been replying to the respondents in response to the notice that because of total slum in market, there was some difficulty in the repayment of amount and had sought permission to deposit Rs. 5000/- per month vide letter dated 31-11-1992 which is born-out from the record. The petitioner had also narrated certain other reasons for his default such as non-availability of the electricity etc. Even though the loan amount was sanctioned at Rs. 3.90 lacs, but from the record it is clear that petitioner had not availed the loan of Rs. 90,000/ - and that was cancelled as per decision of the Project Monitoring Committee vide letter dated 31-2-1992. The petitioner had been depositing Rs. 5,000/- per month from Nov. 1 992 to March 1993 to show that intention of petitioner was bona fide and had submitted that subsidy amount of Rs. 43,000/- which had not been deposited in the account of the petitioner be also adjusted towards the loan. The petitioner vide his letter 6-12-1993 addressed to RFC had even asked for permission to sell some of his machine which could not be used by the petitioner for the purpose of repayment of the loan and had again vide another letter of the same date requested to adjust the subsidy of Rs. 43,000/- lying with the respondents towards the loan. Two cheques of Rs. 10,000/- where deposited by the petitioner in the month of March, 1994. The petitioner had submitted to the respondents in the month of Feb 1994 to the fact that towards the total loan of Rs. 3 lacs, an amount of Rs. 70,000/- had been repaid and a request was made by the petitioner for rescheduling of its loan account. The RFC, Jaipur addressed a letter to the Branch Manager, RFC, Sriganganagar in this regard and invited suggestions for rescheduling the loan. However ultimately without going into the matter of rescheduling of loan or taking any steps whatsoever for the unit to run the Corporation had decided to lake over the unit. Another request was made by the petitioner even in July, 1994 for rescheduling the loan. There is a letter on the record in this regard issued by RFC. Bikaner to Sriganganagar office. Even the Dy. General ManagcrFR I had recommended for rescheduling of the loan vide its letter No. 1255 dated 16-8-1994 written to the Dy. Gen. Manager, Bikaner. Some discussion had taken place between the parties about the reschedulement as is clear from letter dated 9-9-1994 written by the Dy. General Manager, but nothing concrete was done in this regard. Another letter issued by the Asstt.
Manager is of dated 16-1 l-1994,but without any progress and ultimately in the first week of March, 1995, orders were passed to take over the unit in exercise of the powers conferred under Section 29 of the Act of 1951 and immediately on 12-3-1995, publication was issued in the newspaper for auction to be held on 20-3-1995. It is not clear as to what had happened on 20-3-1995. There is no record, but the Committee had recommended that auction may be included in the next auction program. Auction was to be held on 23-8-1995 as per publication of Nav Bharat Times. There is one letter on record dated 23-8-1995 at page No. 73 of the file, written and signed by Ved Prakash son of Desraj Agarwal to the fact that he wanted to purchase the property in question for a sum of Rs. 2.5 lacs and he has already deposited amount of 5% vide receipt No. 123749 and there is endorsement on this application to accept Rs. 12500/- on behalf of Ved Prakash. It is a very material document, photo copy of document is being placed on record and marked as Annexure C/1 with permission/consent of the parties. On that date, one another Jangir Singh also submitted an application who had given the similar tender which is on the file as Annexure C/2. However, even though there was no auction proceedings on that date and only two tenders were received, proceedings had been made out showing the auction amongst two bidders i.e. Jangir Enterprises and Ved Prakash, attached as Annexure R/7. The petitioner was also informed of the auction to be held on 18-10-1995. The auction proceedings of 18-10-1995 have been produced in original which is not signed by any perssonel.
13. It was recommended to reauction the unit by the Committee and reauction was held on 4-12-1995. On 5-12-1995, the bid of Ved Prakash, was accepted vide Annexure R/2 showing the name of one M/s. Jangir Enterprises and Ved Prakash as the only bidders. Against the name of Jangir Enterprises, there is mentioning of an amount of Rs. 3.55 lacs and against the name of Ved Prakash, there is mention of 3.51 and 3.61 lacs. Letter had been written to Ved Prakash on 9-2-1996 for depositing the amount. Vide order dated 29-3-1996, unit and property has been transferred in favour of M/s. Vinayak Metals instead of Ved Prakash, bidder. The above mentioned are the total facts borne out of record perused by me from the file produced by the respondent RFC.
14. It is argued that the action of the respondents in putting the unit of petitioner to sale, is illegal and likely to be set aside on the grounds mentioned below :--
(i) there was no publicity whatsoever as to invite more bidders:
(ii) the publicity was not made in accordance with the rules and regulations :
(iii) the property was situated in Sriganganagar and the publication was made in one Hindi Newspaper circulated in Bikaner :
(iv) that as a matter of fact time and again with intention to handover the property to Ved Prakash, it was the effort of respondent to handover the property to Ved Prakash.
(v) in any case Ved Prakash was bidder, then property could not be sold or registered or transferred in the name of M/s. Vinayak Metals :
(vi) it is the primary duty of RFC to assist and help the unit borrowing the loan to rehabilitating by rescheduling, but despite repeated requests and also instructions issued by the authorities, the respondents have failed to either reschedule the loan or to rehabilitate the petitioner :
(vii) that out of loan of Rs. 3 lacs taken by the petitioner, Rs. 70,000/- had already been paid and in addition to this amount, an amount of Rs. 43,000/- towards subsidy can be adjusted towards the loan :
(viii) that in any case, security of building and the machinery for about more than Rs. 7 lacs was with the respondents and there was hardly any necessity for strangulating the petitioner unit;
15. It is true and has been borne out from the record that publicity in the present case has not been made according to the rules. It is admitted fact that so called notice of auction or tender was only published in one Hindi Patrika of Bikaner Edition. It is requirement of Rules that publication is to be made in a prominent local newspaper and in one State level daily Hindi Newspaper. Apart from that, list of unit available for sale are to be displayed on the notice board. In the present case, no such thing has been done.
16. Admittedly instead of above, the publication has been made in one Newspaper. The property is situated at Sriganganagar where as the Newspaper is published from Bikaner. It has not been brought on record by the respondents that why publication was not made in any local newspaper of Sriganganagar. It is well settled law that in case, the procedure has not been properly complied with, the sale is to be set aside.
17. It has been held by Division Bench of Delhi High Court in AIR 1995 Delhi 388 (Arphi Electronics Pvt. Ltd. v. Union of India) that if publication has not been made in accordance with the rules, the sale is not proper. It was observed as under (at page 390):
"We have carefully considered the rival submissions of the learned Counsel for the parties.
So far as the publication of the notice inviting tender in the newspapers is concerned, we find that the said publication was made in 12 newspapers. However, but so far as Bombay is concerned, where the office of petitioner No. 1 is situate it was published only in Free Press Journals Bombay Edition which only has a limited circulation. We further find that although such notice was published in the Indian Express in different city conditions but surprisingly the same was not published in the Bombay Edition of the Indian Express. On the other hand the individual intimation which was stated to have been sent to the petitioners on 2-9-1994 appears to have been sent by ordinary post as against which the definite allegations of the petitioners are that they have not received any such individual intimation from the respondent No. 1. Since admittedly, the aforesaid individual intimation was sent only by ordinary post there was no scope for drawing any presumption in law about service of such letters on the petitioners, which could have been possible if the said letters were sent to the petitioners by registered post. When a particular process is followed and pursued by the respondents No. 1, it was also their obligation to see that the process has the logical and effective end."
18. The following guidelines were also formulated by Hon'ble Apex Court in 1992 AIR SCW 3629 : (AIR 1993 SC 935), (Mahesh Chandra v. Regional Manager U.P. Financial Corporation). It was held by Hon'ble Supreme Court as under (at page 3643 of AIR SCW):
"(1) Sale of a unit should always be made by public auction.
(2) Valuation of a unit for purpose 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 tenders is to be accepted must be intimated to the unit holder.
(4) (a) If unit holder is willing to offer the sale price, or the tender then he should be offered same facility and 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 a result of tendered amount.
(b) If he brings third parties with highest 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 ordinary buyer may not be available or the industry itself may be of such nature that by normal buyers may not be available. But before taking such steps there should be advertisements not only in 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.
It was also held as under :
"Default in payment of loan may attract Section 29, but that alone is insufficient either to assume possession or to sell the properly. Neither should be resorted to unless it is imperative, Even though no rules appear to have been framed nor any guideline framed by the Corporation was placed, yet the basic philosophy enshrined in Section 24 has to be kept in mind. Rationale of action and motive in exercise of it has to be judged in the light of it. Lack of reasonableness or even fairness at either of the two stages renders the take over and transfer invalid.
"Section 29 confers very wide power on "Corporation" to ensure prompt payment by arming it with effective measure to realise the arrears. But the simplicity of the language is not an index to enormous power stored in it. From notice to pay the arrears, it extends to taking over management and even possession with a right to transfer it by sale. Every wide power, the exercise of which has far reaching repercussion, has inherent limitation on it. It should be exercised to effectuate the purpose of the Act. The exercise of discretion should be objective. Test of reasonableness is more strict. The public functionaries should be duty conscious rather than power charged. Its actions and decisions which though the common man have to be tested on the touchstone of fairness and justice. Power under Section 29 of the Act to take possession of a defaulting unit and transfer it by sale requires the authority to act cautiously, honestly, fairly and reasonably."
"Sub-section (4) of Section 29 treated the Corporation "to be a trustee" of the debtor or person claiming title through him. It saddles the Corporation or the officer concerned with inbuilt duties, responsibilities and obligations towards the debtor in dealing with the property and entails him to act as a prudent and reasonable man standing in the shoes of the owner."
"The Corporation or its officers or servants as trustee are bound to exercise their power in good faith in selling or dealing with the property of the debtor as ordinary prudent man would exercise in the management of his own affairs to preserve and protect his own estate. Therefore, the acts of the officer or servant of the Corporation should be reasonable, just and fair which must meet the eye and the offer accepted must be of competitive and every attempt should be made to secure as maximum price as possible to liquidate the liabilities incurred by the industrial concern on the debtor under the Act."
19. Yet in another case reported in AIR 1989 SC 1551 (Swastik Automobiles v. Bihar State Financial Corporation), sale was set aside by Hon'ble Apex Court and settlement of entire dispute was directed. It was held that there was enough security money with the Financial Corporation and, therefore, there was hardly any necessity to put the unit in auction. It was held by Supreme Court as under (at page 1552) :
"When the matter was heard we found that the sale of the security by the Bihar State Financial Corporation respondent No. 1, herein, in exercise of its powers under the Financial Corporation Act (63 of 1951), was difficult to be sustained inasmuch as the security which was valued at over Rs. 20 lacs had been sold away for a small amount that was actually due by the debtor to the Corporation and subsequently the price had been raised to some extent by negotiation. We further found that the auction purchasers were no other than the tenants."
20. Applying the above said enunciations of law, in the present case, admittedly no publicity has been made right from first day, no proper publicity has been made right from first day to last day. There are only the same one or two bidders available i.e. M/s. Jangir Enterprises and another is Ved Prakash. Even in one of the auction, the Ved Prakash deposit the amount without there being any auction held which is accepted and details of such deposits have been mentioned above. This Ved Prakash is present on each and every auction and so is M/s. Jangir Enterprises and none else. This shows that as a matter of fact, there was no proper wide publicity as to attract other persons and ultimately almost same amount is fetched which was offered by this Ved Prakash and his bid is ultimately accepted. The circumstances do create doubt on the procedure and method of holding the auction. Ved Prakash and M/s. Jangir Enterprises are always available to the department for signing on any bid paper.
21. In whole of the auction proceedings held on number of times, there is no mention of any third person and Ved Prakash nowhere reveals that he was purchasing the property on behalf of M/s. Vinayak Metals. It is after few months of the auction in favour of the Ved Prakash, that there being without any application or verification, the RFC transfers the property in the name of M/s. Vinayak Metals. A doubt has been cast on this action of the RFC. The RFC ought to have transferred the property in favour of Ved Prakash, bidder and not in M/s. Vinayak Metals and that too has been done when two writ petitions had already been filed against the RFC challenging the auction of the unit. The above facts strengthen the apprehension of the petitioner that transaction was not being done in accordance with the law. The bidder is Ved Prakash and property is transferred in the name of M/s. Vinayak Metals during the pendency of the writ petition and, therefore, any action taken during the pendency of writ petition, shall be hit by principles of lis pendise.
22. The petitioner had also filed an affidavit to the fact that he is prepared to deposit the amount of highest bid fetched, but the counsel for respondents has shown his inability to accept such an amount. It seems that even before and after the final decision being taken under Section 29, the petitioner had been writing to the RFC for rescheduling and rehabilitating the unit. It has been held by Hon'ble Apex Court that efforts to recover the amount or sell the property are not the only primary functions of RFC. RFC has been established not only to finance the industrial unit, but also to guide the units incase of any difficulty. RFC has its own expertise to stream line the industrial enterprises which efforts have not been resorted to by the RFC in the present case. It is also not disputed that petitioner had deposited about Rs. 70,000/- out of Rs. 3 lacs loan amount and if subsidy is also adjusted, the amount would rise to more Rs. 1 lac. It has also come on record that petitioner had been requesting the RFC to allow petitioner to dispose of some machinery which was not being used in the unit, so that the the petitioner could repay some more amount. No response had been sent to the petitioner in this regard. It had been repeatedly held that RFC is to be helpful to the unit to whom the loan is sanctioned and it should be the effort of RFC that not only the loan is properly utilised, but also incase of difficulty, it should give helping hand instead of strangulating the unit. In the present case for a very small amount, the unit has been allowed to be destroyed by way of resorting to Section 29 of the Act and also by ultimately selling the unit. It is also admitted that building and machinery were under mortgage with RFC and, therefore, the RFC was totally secured. In such circumstances, there was hardly any necessity for the RFC to rush for locking the unit and selling the same by way of auction.
23. For the above said reasons coupled with the fact, that no proper publicity, as required under the Rules, and publication made was not in accordance with the rules, framed by RFC itself, and in view of attending circumstances, no doubt is left that the action of respondents RFC was not in accordance with the law and was, therefore, illegal on the face of it. It is true that in certain cases, there is no alternative for RFC but to resort Section 29 of the Act and can even sell the property by auction or tender. But in such situation, RFC is bound to adopt the procedure of publicity in accordance with law and should be fair enough and work as a trustee for the benefit of Unit.
24. The petitioner has filed an affidavit to the fact that he is prepared to deposit Rs. 3,61.000/-which was the price fetched as per the bid offered by Ved Prakash. In the present circumstances, the communication vide Annexure-5 and the auction conducted on 5-12-1995 for Rs. 3.61.000/- for the lands, building and plant, ascommunicated vide Annexure-5 attached with writ petition and the auction proceedings in this regard are held to be illegal and, therefore, are set aside.
25. Instead of putting the unit for reauction, it will be appropriate in the present case if the petitioner is allowed an opportunity to restart his unit, as stated by the petitioner in the affidavit filed in this Court, the petitioner may deposit an amount of Rs. 3,61.000/- with RFC and even if such deposit is made within four months, the RFC shall hand over the property to the petitioner and in case no deposit is made, the respondent RFC may reauction the unit in accordance with law after proper publication in the newspapers circulated in the locality as well. The petitioner shall also be free to bring any customers for purchase of property, if more price can be fetched according to the petitioner as per guidelines in Mahesh Chandra's case.
26. For the reasons mentioned above, writ petitions are allowed. The auction held by the RFC in favour of Ved Prakash is set aside and any action of Transferring of Property taken during the pendency of writ petition shall not be binding on the petitioner. With the abovesaid observations, the writ petitions are allowed. No costs.