Calcutta High Court
Ideal Real Estate Private Ltd. & Anr vs West Bengal Financial Corporation & Ors on 4 March, 2008
Author: Dipankar Datta
Bench: Dipankar Datta
G.A. No. 284 of 2008
W.P. No. 25 of 2008
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
Ideal Real Estate Private Ltd. & anr.
....Petitioners
Versus
West Bengal Financial Corporation & ors.
....Respondents
Mr. S. N. Mukherjee
Mr. S. Basu
Mr. B. Bhattacharya
...for the applicants
Mr. U. Majumdar
Mr. P. Kar
...for the petitioners
Mr. A. K. Dhandhania
Mr. A.K. Sur ... for the respondents
Present :The Hon'ble Justice Dipankar Datta
Heard on : 15.2.2008
Judgment on : 4.3.2008
Ideal Real Estates Private Limited and another (hereafter the petitioners)
responded to an advertisement, published at the instance of West Bengal
Financial Corporation (hereafter WBFC), inviting offers for sale of assets of M/s.
S.P. Cycles Limited (hereafter the said assets). They offered to purchase the said
assets at Rs.4.25 crores which was adjudged highest. Due to pending court
cases, WBFC was unable to complete sale of the said assets. However, with the
dismissal of MAT No. 670 of 2007, since renumbered FMAT No. 1488 of 2007, by
a Division Bench of this Court on 19.12.07, WBFC vide its letter dated 24.12.07
informed the petitioners that they were now in a position to transfer the said
assets under Section 29(1) of the State Financial Corporations Act, 1951
(hereafter the said Act) on "as is where is and whatsoever there is" basis in their
favour subject to conditions mentioned therein. In the writ petition, it has been
claimed by the petitioners that they fulfilled all the conditions mentioned in the
aforesaid letter, yet, WBFC acted illegally and wrongly in not accepting the draft
towards the balance price when tendered and failed to hand over the draft deed
of conveyance.
Feeling aggrieved by such action of WBFC, the petitioners prayed for the
following relief:
a) A writ of and/or writs in the nature of Mandamus directing the
respondents and/or each of them, their men or agents or subordinates to
i) furnish the draft Deed of Conveyance to the petitioners for sale of the
assets of the said M/s. S.P. Cycles Ltd.;
ii) on approval of the draft Deed to execute and register necessary
conveyance in favour of the petitioners and/or its nominees;
iii) to hand over possession of the assets of M/s. S.P. Cycles Ltd. to the
petitioners simultaneously with the execution and registration of
conveyance for the said assets;
iv) to furnish all original deeds and documents with regard to the assets
of said M/s. S.P. Cycles Ltd. to the petitioners;
v) to furnish a list of arrear dues with regard to the assets of M/s. S.P.
Cycles Ltd.;
vi) to make settlement with WBIDC about its claim before the execution of
conveyance and/or to obtain No Objection Certificate from WBIDC
before sale;
vii) to accept the balance payment of Rs.4,12,50,000/-;
b) Declaration that the petitioner no.1 and/or its nominees is entitled to
obtain conveyance in respect of the assets of M/s. S.P. Cycles Ltd. and
also entitled for possession of the said assets;
c) A writ of and/or writs in the nature of Prohibition restraining the said
Corporation and/or its agents and subordinates from dealing with and/or
disposing of the assets of M/s. S.P. Cycles Ltd. except with the petitioner
no.1;
The writ petition was moved on 11.1.08 before this Court. Learned Counsel
for WBFC submitted that there was no refusal on its part to accept the draft
prepared by the petitioners. The Court directed learned counsel for WBFC to
accept the draft and WBFC was also granted liberty to encash it and to take
follow up action for the purpose of handing over of the said assets in favour of
the petitioners.
By a subsequent letter dated 14.1.08, WBFC called upon the petitioners to
take over possession of the said assets in terms of the letter dated 24.12.07. In
view of such letter, the Court passed an order dated 15.1.08 directing WBFC to
hand over possession of the said assets in favour of the petitioners as indicated
in their letter dated 14.1.08 on 21.1.08 positively with the assistance of the
police, if necessary. So far as handing over of conveyance deed is concerned, the
petitioners were also granted liberty to approach WBFC. The writ petition was
directed to be listed on 27.1.08 for further consideration.
At this stage, the present application (G.A. 284 of 2008) was filed by
Jagannath Business Services Private Limited & another (hereafter the applicants)
for being impleaded in the writ petition as respondents in view of the facts and
circumstances narrated therein.
The applicants in the said application contended that they had preferred
Special Leave Petition against the order dated 19.12.07 passed by the Division
Bench dismissing FMA No. 1488 of 2007 and that the petitioners having
concealed material facts pertaining to the property in question are seeking orders
which would vitally affect their interest in the pending Special Leave Petition.
Accordingly, a prayer was made for adding them as respondents in the writ
petition.
This Court has heard learned Senior Counsel for the applicants, and
learned Counsel representing the petitioners and WBFC.
Reference to certain facts would be relevant for disposal of the said
application.
On the basis of the materials on record, it appears that West Bengal
Industrial Development Corporation Limited (hereafter WBIDC) and WBFC were
the mortgagees in respect of the said assets. Pursuant to an order passed by the
concerned Civil Court under Section 31 of the said Act, permission to sell the
said assets was given to WBIDC. A sale notice was published by WBIDC inviting
offers and the applicants responded thereto by submitting their offer to purchase
the same for a sum of Rs. 69 lakhs. The offer of the applicants was accepted by
WBIDC and on such acceptance, a sum of Rs. 20 lakhs had been paid by the
applicants to it. WBIDC made over part possession of the said assets to the
applicants but despite requests, possession thereof in its entirety was not handed
over. This resulted in the applicants instituting a suit for specific performance
wherein the Civil Court restrained WBIDC from selling the said assets until
further orders by its order dated 30.7.04. On 21.3.05, WBFC forcibly took
possession of the said assets by evicting the applicants therefrom and on a writ
petition filed by the applicants [W.P. No.6567 (W) of 2005], a learned Judge by
order dated 30.3.05 put the applicants back in possession of the said assets. An
appeal was preferred by WBFC against such order which was disposed of by the
Division Bench by its order dated 7.4.05 reserving the rights and contentions of
WBFC to take appropriate proceedings in the matter. WBFC now issued a notice
dated 5.7.05. It called upon the applicants, in view of their neglect and/or failure
to adhere to the terms of their contract, as to why rights and powers conferred on
it under the said Act shall not be exercised for re-entering upon and repossessing
the said assets, on 20.7.05. This notice was challenged by the applicants before
this Court by filing W.P. 13606 (W) of 2005. Three of the issues framed by the
learned Judge while hearing the writ petition are extracted below:
"B) Is the contract of sale between the petitioners and WBIDC
subsisting?
C) Is WBFC entitled to sell the property for recovery of its dues?
D) Is the notice dated 5th July, 2005 issued under Section 29 of the
State Financial Corporation Act valid and legal?"
The learned Judge answered issues B and C in the affirmative and issue D
in the negative. Observation of the learned Judge while answering issue C
extracted (supra) is relevant and is quoted below:
" In the present case at the highest the petitioner contracted to buy the
mortgaged property. The petitioner has been seeking to specifically
enforce the contract but is not agreeable nor has offered to redeem the
property by paying the dues of WBFC. In the premises the right of
WBFC to sell the property for recovery of its dues cannot be
questioned. The issue is accordingly answered in the affirmative."
The order dated 28.2.07 was challenged in an intra court appeal being the
appeal referred to above. The Division Bench by its judgment dated 19.12.07
dismissed the appeal with the following observations:
" 31. Taking into consideration the aforementioned facts into
consideration we are of the view that the Appellants, by their own
conduct cannot be allowed to "speculate" over a property which is so
valuable merely because, on the basis of an offer, they deposited a
sum of Rs. 20 lakhs and then went into an exercise of either intense
epistolary activities or into well calculated and/or well planned
litigations so as to be in a position to claim rights allegedly flowing
under Section 29 of the SFC Act.
We are of the view that the submissions pertaining to Section 29 have
been stagemanaged all throughout only to get out of the "withdrawal"
clauses of the letters quoted in Paras 8 and 29 above and by which
both the Corporations had clearly mentioned that in case of default,
the offer of sale shall stand withdrawn. Since the Appellants
defaulted, the said offer has obviously been withdrawn and therefore
we see nothing wrong if the WBSFC has now exercised its rights
under Section 29 of the SFC Act.
**********
We therefore fully endorse the views of the learned Single Judge and we proceed to dismiss the Appeal".
The applicants approached the Apex Court with Special Leave Petition Nos. 616-617 of 2008. By an order dated 8.2.08, the Special Leave Petitions have been dismissed.
In view of dismissal of the Special Leave Petitions filed by the applicants, the findings of this Court that the applicants having defaulted, their offer had obviously been withdrawn; that there was nothing wrong in WBFC exercising its right under Section 29 of the said Act; and that WBFC had the right to sell the said assets, have attained finality and this Court is of the considered view that the applicants can have no say in respect of sale notice issued by WBFC to which the petitioners responded, was adjudged the highest bidder and, thereafter, their offer having been accepted, necessary action has been directed to be taken. Whatever claims the applicants could legitimately lay in respect of the said assets stand negated by reason of the authoritative pronouncements referred to above. The applicants are neither necessary nor proper parties to the petition and it is held that their presence is not at all necessary for effective adjudication of the issues raised in the writ petition.
The application for addition of party fails and is dismissed. There shall be no order for costs.
List the writ petition as "For Orders" on 7.3.2008. Urgent photostat certified copy of this judgment, if applied for, be furnished to the applicant within 3 days from date of putting in requisites therefor.
(DIPANKAR DATTA, J.)