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On 29th December 1999 in a meeting chaired by the Minister of Textile, it was decided to sell the entire land of the mill. The matter was then sent back to the Revenue Department, which considered the matter afresh. In its note dated 17.1.2000. it disagreed with the Textile Department and reiterated that the land was not of the Mill but of the Government. It agreed to the sale of the entire land subject to the conditions that - (a) upset price of the land of 43 acres 12 gunthas be fixed, (b) notice be published for public action, (c) entire amount be deposited with the Revenue Department and (d) those who had given their offer earlier, be allowed to participate in the auction. After discussion with the Principal Secretary (Revenue), the Revenue Department modified the aforesaid conditions and stated that - (a) upset price of the land of 43 acres 12 gunthas be fixed, (b) thereafter the land be sold by public auction and (c) the difference between the upset price and the amount received from auction would go to the account of the Mill. This proposal was accepted by the Revenue Minister by putting his signatures on 19.2.2000. In its further note dated 23.2.2000, the Revenue Department set out the first part of the revised proposal as approved by the Revenue Minister as under :

"(I) 43 acres 12 gunthas land of the Mill has been kept in the Government Account. The cost of this land should be worked out on the basis of the existing market rate of land and this cost should fixed as upset price and public auction should be held. The Government (Revenue Department) will have the right on the amount received from the auction calculated on the basis of the existing market rate and alter deduction of the cost of land worked on the basis of existing market rate from the amount received by auction, then whatever balance will remain, on that amount the Spinning Mill have the right on it (This should be returned to the Mill).

The initial proposal made by the Department of Textile on 22.7.1998 was for sale of only 5 acres of land and the approval granted by the Revenue Department on 6.7,1999 and by the Finance Department on 28.9.1999 was also for sale of 5 acres. However, the Liquidator on 18.10.1998 invited offers for the sale of the entire land of 43 acres and 12 gunthas. As on the date when the offers were invited, there was not even a proposal for sale of the entire land, leave alone prior permission of the Government. Revenue Department in its note dated 17.1.2000 had agreed to the sale of the entire land subject to the condition that the upset price of the subject land be fixed and a notice be published for public auction and those who had given their offers earlier be allowed to participate in the auction. The entire sale amount be deposited with the Revenue Department and the difference between the upset price and the amount received from auction shall go to the mill. It is evident from the reading of the entire record that the idea was that the upset price of the land must be fixed first and then the land be sold. The Finance Department in its note dated 17.5.2000 and 13.6.2000 also concurred with the conditions proposed by the Revenue Department. Thereafter, the Textile Department proposed that the tenders invited earlier be finalised and there was no need for re-auction of the land. The matter was thereafter never put up before the Cabinet and a decision was conveyed to the Collector that the Government had agreed for the sale of the entire land in favour of the appellant. At the time when the offer of the appellant was received, no valuation of the land was got done.

The idea was that the upset price of the land must be fixed first and then the land be sold. Further noting is with regard as to whether it should be sold by auction or tender and how the sale proceeds should be shared by the Government and the mill. But the basic condition that the upset price be fixed and thereafter land be sold is abundantly clear. The notings of the Finance Department dated 17.5.2000 and 13.6.2000 also show its concurrence to these conditions proposed by the Revenue Department. It would, therefore, be incorrect to say that the proposal of the Textile Department was accepted by the Revenue and the Finance Departments.