Calcutta High Court (Appellete Side)
Modern Refractories Pvt. Ltd. & Ors vs The West Bengal State Financial ... on 3 December, 2024
Author: Jay Sengupta
Bench: Jay Sengupta
Sl. No.1
03.12.2024
ssi
Ct. 17 WPA 28476 of 2024
Modern Refractories Pvt. Ltd. & ors.
-vs-
The West Bengal State Financial Corporation Ltd. & ors.
Mr. Ranjan Kali
Ms. Mitul Chakraborty
Ms. Payel Nath
...for the petitioners
Mr. Avirup Chatterjee
Mr. Rishov Das
...for the Intervener
Mr. Sannidhya Datta
Mr. Abhijit Sarkar
Mr. Abhik Chitta Kundu
...for the respondents WBFC
Affidavits of service filed on behalf of the petitioners are taken on record.
Learned counsel appearing on behalf of the petitioners submits as follows. The petitioners are the borrower company. They allegedly defaulted in making payment of dues. The finance company did not take steps for all this long. No demand notice was served upon the petitioners. Suddenly by a notice published in newspaper dated 12.11.2024, the West Bengal Finance Corporation published the E-Auction Sale Notice for the petitioners' property, amongst others. Reliance is placed on a decision of the Hon'ble Apex Court in Kerala Financial Corporation -vs- Vincent Paul & anr., Civil Appeal No. 3446 of 2003. Certain guidelines were laid down there. Among other things, it is 2 required that the authorities concerned shall serve to the borrower notice for 30 days for sale of the immovable secured asset. It was also directed that the valuation of the property had to be ascertained properly and the debtor should be given a reasonable opportunity in this regard.
Learned counsel appearing on behalf of the respondent finance company denies the allegations made in the writ petition and submits as follows. First, even as per the judgment of the Hon'ble Apex Court in Vincent Paul (supra), a notice was given as far back as in 2023 for having E- Auction Sale for the property. The same was not challenged by the petitioners. Subsequently, an E-Auction was held. But, there was no bidder for the property. Therefore, in 2024 again the Finance Company published a notice for holding the E-Auction. Besides, appropriate valuation has been done from an empanelled valuer. However, similar directions was laid down by a Division Bench of the Hon'ble Apex Court in Mahesh Chandra -v- Regional Manager, U.P. Financial Corporation, (1993) 2 SCC 279. Such directions were set aside by a Three Judges Bench of the Hon'ble Supreme Court in Haryana Financial Corporation and another -vs- Jagdamba Oil Mills & another, (2002) 3 SCC 496. Besides, the condition contained in Vincent (supra), is that the authorities concerned shall serve to the borrower a notice of 30 days for sale of the immovable secured asset. That stage has not come yet. As per practice followed in the E-Auction, once a bid is received, a notice of 30 days will be given to the 3 borrower to match the bid. Only after that, a sale would be confirmed.
Learned counsel appearing on behalf of the intervener submits that they are shareholders of the petitioner company and would like to pay the original outstanding dues to clear the property.
It has been submitted on behalf of the respondent finance company that the said sale would not be complete before issuing a notice to the borrower to match a bid, if received in the auction process. Therefore, there is no need to pass an interim order of stay in this regard even if the petition is entertained on the ground of purported violation of principles of natural justice.
Report in the form of an affidavit be filed by the respondent finance company in this regard within two weeks from this date.
Exception, if any, be filed within a week therefrom. List this matter for hearing under the same heading after three weeks.
Steps taken by the respondents shall abide by the final decision in this writ petition.
Let the petitioners also make it abundantly clear to the intending bidders in the auction process that they intend to complete the sale only after the finally placed bid is offered for matching by the borrower within 30 days and such date expires without the borrower matching the bid.
Parties shall act on a server copy downloaded from the 4 official website of this Court.
(Jay Sengupta, J.)