Prayer in W.P.No.3531 of 2009 Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Mandamus, directing the 2nd respondent to receive the petitioner's due amount and to release the Karuppan Lodge in T.S.No.1506 situated at Vadakadu Road, Alangudi Post, Pudukkottai District without encumbrance.
Prayer in W.P.No.4792 of 2009 Petition filed under
Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus, calling for the records and quash the impugned order issued by the 3rd respondent in sale deed document No.927 dated 22.07.1998 and consequently direct the 3rd respondent not to conveyance the Karuppan Lodge in T.S.No.1506 situated at Vadakadu Road, Alangudi Post, Pudukkottai District to any other person.
Since the issue involved is common in both the writ petitions, they are taken up together and disposed of by a common order.
2.W.P.No.3531 of 2009 has been filed for a Writ of Mandamus to direct the second respondent, the Tamil Nadu Industrial Investment Corporation Limited (hereinafter referred to as 'the TIIC') to receive the petitioner's due amount and to release the Karuppan Lodge in T.S.No.1506 situated at Vadakadu Road, Alangudi Post, Pudukkottai District without encumbrance.
3.The prayer in W.P.No.4792 of 2009 filed by the same petitioner for a Writ of Certiorarified Mandamus to quash the sale deed dated 22.07.1998 registered as document No.929 of 1998 and consequently direct the third respondent not to convey the Karuppan Lodge to any other person.
4.The facts leading to the filing of the writ petitions are stated hereunder:
The petitioner was sanctioned a term loan of Rs.8,35,000/- by the TIIC on 16.08.1985. The loan was for construction of lodging houses and purchase of equipments. The loan was repayable together with interest at 15% compounded half yearly with 2% rebate on term prompt repayment. The petitioner had the benefit of Central Government subsidy to the tune of Rs.3,36,750/-. The loan was repayable in 11 half yearly instalments with moratorium period of 2 years and the total cost of the project is Rs.26,75,000/-. According to the petitioner, he had paid Rs.8,51,581.90/- as on 13.11.1991 and thereafter, the second respondent had called upon the petitioner to attend the conference along with other debtors for the purpose of rescheduling the loan. Thereafter, the second respondent had initiated action under
Section 29 of the State Financial Corporations Act, 1951. The petitioner had filed a civil suit for permanent injunction to restrain the TIIC from taking action under
Section 29 of the State Financial Corporations Act and injunction was also granted, ultimately injunction petition in I.A.No.5792 of 1992 was dismissed. Against which CMA No.76/1996 was preferred and the same was also dismissed and C.R.P.No.2987 of 1996 was preferred before the Principal Bench of this Court and an interim order was granted on 10.12.1996 subject to condition of payment of Rs.2,00,000/- within 8 weeks. According to the petitioner, he was in Malaysia carrying import and export business and his brother was taking care of the affairs of the lodge. During 1996-1997, he met with a huge loss in his business and was also suffering from ailments and was not in a position to come to India to take necessary steps to comply with the interim order of this court directing payment of Rs.2,00,000/-. It is further stated that the said suit was dismissed for default on 11.08.1997. According to the petitioner, he made various arrangements for repayment of the loan and stated that he has paid more than Rs.13,00,000/- even though he had borrowed only Rs.8,34,999.80. It is further stated that during 1999, he came down to Chennai and his friends informed him that the respondent TIIC in collusion with the third respondent auctioned the property on 17.2.1998 for a sum of Rs.46,01,000/-. According to the petitioner, he approached the TIIC and enquired about the auction and in the meantime, he suffered mental illness and heart ailments and was unable to do anything and was confined to his home for over six years. It is further stated that after he was better he approached the second respondent and requested them to permit him to pay back the loan in one time settlement and since there was no response in the year 2008, he obtained a certified copy of the sale deed executed by the TIIC in favour of the third respondent and then came to know that the auction was held on 17.02.1998 and that third respondent had paid the following amounts:
Date Amount 17.02.1998 -- Rs. 4,60,100/-
31.03.1998 -- Rs.10,00,000/- 11.05.1998 -- Rs.16,40,900/- 10.06.1998 -- Rs.15,00,000/-
and the same was confirmed in favour of the third respondent on 24.03.1998 and the balance sale consideration ought to have paid within 45 days from the date of confirmation (i.e.) 08.05.1998. According to the petitioner, the value of the lodge in the year 1993, is more than one crore and in the year 1998, the value was more than 1.5 crores and the furnitures in the building was worth more than Rs.25 Lakhs. It is further stated that though the amount due was only Rs.17,00,000/-, the respondents without taking into consideration the same sold the property for the lowest price. It is further stated that the third respondent did not make the entire payment on or before 08.05.1998 and the second respondent ought not to have accepted the payment after 45 days and should have offered the property to the petitioner or re-auctioned the property. It is further stated that the second respondent has no power to extend such time. Therefore, the petitioner contended that the execution of the sale deed dated 22.07.1998 is contrary to the terms of auction and against law and the sale price of Rs.46,01,000/- is very low compared to the value of Rs.1.5 crores and thereby his right under Articles 14, 19 and 21 of the Constitution of India are infringed.
5.The TIIC has filed separate counter affidavits in both the writ petitions. It is stated that the petitioner had paid only a sum of Rs.9,23,014/- till 13.01.1998 and not Rs.13,00,000/- as stated by the petitioner and the cheques issued by him had returned and unpaid. The request made by the petitioner on 12.12.1998 for reschedulement of loan was rejected by their letter dated 09.01.1989. It is further submitted that the physical possession of the property was taken on 06.01.1998 under
Section 29 of the State Financial Corporations Act and after giving wide publicity the property was brought for auction on 17.02.1908. There were 13 persons who participated in the public auction and the third respondent is one among them. Two suits were filed by the petitioner in O.S.Nos.3608, 4657 of 1998 before the City Civil Court, Chennai. It is further stated that, the fact that the suits were filed by the petitioner and it is proved that the petitioner was available in Chennai and his allegation that he was in Malaysia is purely an afterthought. Both the suits were filed challenging the auction sale. The petitioner had withdrawn the injunction application in O.S.No.3608 of 1998 and in the meantime, the respondents had executed the sale deed 22.07.1998 in favour of the third respondent. It is thereafter on 25.07.1998, the petitioner had filed another suit in O.S.No.4657 of 1998 before the VI City Civil Court, Chennai stating that the TIIC accepted the bid amount belatedly. The City Civil Court by an order dated 22.09.2009 in I.A.No.15115 of 1999 in O.S.No.4657 of 1998 directed the respondent Corporation not to disburse the sale proceeds. It is pointed out that the sale proceeds of Rs.46,01,000/- had been adjusted and a sum of Rs.21,53,267.45/- being the amount recoverable by the TIIC and the remaining amount has been deposited with the competent court. It is further stated that W.P.No.4206 of 1998 was filed by the petitioner's wife and minor children but the same was withdrawn on 21.07.1998. Therefore, it is submitted that the petitioner suppressing all the above mentioned facts has filed the present writ petition. As regards belated remittance of the sale price by the third respondent, it is submitted by the TIIC that they have recovered interest for the period of 33 days and condone the delay in payment. As regards the valuation of the property, it is submitted that as per the valuation report from its Panel Valuer of TIIC, dated 11.02.1998 the market value of the property is only Rs.48,96,863.15 and the guideline value is Rs.44,79,358.45 and the property was sold for a sum of Rs.46,01,000/-. As regards the valuation of the furniture, it is submitted that as per the valuation reported obtained by the respondent from its panel valuer, the value of the furnitures and fixtures are only Rs.2.50 lakhs. It is further submitted that the present writ petition has been filed after lapse of 11 years from the completion of the sale suppressing about the various material facts and the same is liable to be dismissed.
6.The third respondent has filed separate counter affidavit stating that the property was brought for sale by public auction by calling for tenders through newspaper advertisement and the third respondent was highest bidder and the same was accepted and the bid was confirmed by the default review committee of the TIIC. It is further submitted that sale deed has been executed on 22.07.1998 and they are in possession and enjoyment of the same and carrying business under the name and style of M/s.Sridevi Lodge. The third respondent would also submit that on account of the delay, the writ petition is liable to be dismissed. It is further stated that the petitioner failed to comply with the conditional order passed by this Court on 10.12.1996 in C.R.P.No.2987 of 1996. Therefore, the third respondent would submit that the writ petition is liable to be dismissed as being not maintainable.
7.Heard Mr.T.Lajapathi Roy, learned counsel for the petitioner, Mr.Suresh, learned counsel for TIIC and Mr.AR.L.Sundaresan, learned Senior counsel for the third respondent and perused the entire materials available on record.
8.Learned counsel for the petitioner would submit that the entire action initiated by the TIIC is vitiated on several grounds firstly the sale notification issued by the respondent is in respect of two floors and the third floor has not been disclosed in the notification and if the same had been done, the sale price would have been far from higher than what has been paid by the third respondent and on this ground the notification itself is bad in law.
9.Further, the learned counsel for the petitioner would submit that it is elementary principle in any such auction that the portion required to be sold alone shall be sold and the portion which is required to be sold for the purpose of satisfy the debt alone has to be sold and there was no necessity to bring the entire property for sale. Learned counsel would further submit that the sale has taken place in respect of the entire property with the built up area and the value of the property was Rs.1.50 Crores and it has been sold for a partly sum of Rs.46,01,000/-.
10.Learned counsel would further submit that on account of the material defect in the notification, the issue goes to the root of the matter and any subsequent proceedings including the execution of sale deed is vitiated. That apart learned counsel for the further submit that there is collusion between the officials of the respondent Corporation and the third respondent and more particularly, when the loan was only Rs.17,00,000/-, the property has been disposed of for Rs.46 Lakhs, therefore, the proceedings are vitiated.
11.On the question of the delay in filing the writ petition, learned counsel by placing reliance on the decision of the Supreme Court in 1990 4 (SCC) 174 (Mahadev Kalekar and others Vs.State Bank of Hyderabad and others) would submit that the petitioner was pursuing their remedies available to have and the entire matter has been properly explained and therefore, the claim made by the petitioner should not be rejected on the ground of laches.
12.Learned counsel for the petitioner further would submit that the petitioner has stated that there has been collusion in the matter in the sense that the notification did not properly describe the entire property and the value of the property has been purposely fixed at a very lower rate and all these proceedings would go to establish that there was fraud played in some how ensuring that the property is knocked out by the third respondent.
13.Learned counsel would further place reliance on a judgment reported in 2007 13 SCC 576 (Sai Enterprises Vs. Bhimreddy Laxmaiah and another) and stated that in all execution proceedings, it has to be seen that whether it is necessary to bring the entire property to sale or such portion thereof as may seem necessary to satisfy the decree. If the property is large and the amount is due could be satisfied if a portion of the property is proceeded against then there is an obligation imposed on the Courts, in the said case, to bring only that property by relying on the judgment, learned counsel would submit that there is a duty cast upon the Court to sell only such portion or portion thereof as is necessary to satisfy the decree is a mandate of the legislature which cannot be ignored.
14.Further, by relying upon a decision in 2008 (5) MLJ 849 SC (Ormi Textiles and another Vs. State of U.P and others), learned counsel would submit the right to sell the property by the respondent corporation must be exercised only in respect of the mortgaged property and not the one which is not the subject matter thereof. He would further submit that in the instant case, the subject matter of mortgage were only two floors and therefore, the question of bringing the third floor for auction does not arise.
15.That apart, learned counsel submit that the decision in Ormi Textiles referred above has been followed by the Supreme Court in Bihar State Financial Corporation Vs. Chhotanagpur Minerals and others reported in 2009 2 SCC 471 wherein the Supreme Court held that a mortgageee can have a right to sell a property even under the contract. The same must necessarily mean that the property to be sold is the one over which he has the right, title and interest. A sale without any right would be a nullity on the ground that the learned counsel would submit that the entire proceedings are vitiated.
16.Learned counsel for the TIIC would submit that the loan is for 1+2 floors and the entire land is the subject matter of mortgage and therefore, the respondent Corporation was entitled to bring the entire property for sale.
17.Learned counsel by relying upon the averments made in the counter affidavit would submit that valuation report given by their authorised valuer is based on the guideline value, the sale had taken place and therefore, there is absolutely no mala fide action on the part of the respondent Corporation. Further learned counsel would submit that due publication was given in the dailies and proper procedure was followed for the purpose of sale of the property.
18.Learned counsel would submit that there has been orders of attachment passed by civil courts and in compliance of the orders, the respondent corporation has remitted the amounts to the credit of those suits from and out of the sale proceeds received. Learned counsel had invited the attention of this Court to various attachment proceedings initiated by the third parties against the petitioner as well as the respondent Corporation which orders have been annexed in the typed set of papers filed by the corporation. Finally learned counsel would submit that 11 years have been completed after the sale is over and by relying upon a decision in Karnataka State Industrial Investment & Development Corporation Ltd., Vs. Cavalet India Limited and others reported in 2005 (4) SCC 456 would submit that this Court while exercising its jurisdiction under
Article 226 of the Constitution of India, cannot sit as an appellate authority over the acts done by the respondent Corporation. Further, he would submit that there is no statutory violation on the part of the corporation and they have acted fairly and reasonable and in such commercial maters, the courts would not normally interfere. On the above grounds, learned counsel for the TIIC, prayed for dismissal of the wr petitions.
19.Learned counsel for the third respondent would contend that the allegations of fraud and collusion are vague. No specific averment has been made except using the term fraud and there is no substantial proof or any specific allegation in this regard. He would further submit that the petitioner is an honest purchaser for valuable consideration and 11 years have passed after the sale seed has been executed and the right of redemption which was available to a mortgagee is lost after the sale is concluded. He would further submit that the petitioner had knowledge of the proceedings at the crucial point of time and his conduct by moving civil Court by filing two suits as stated above and as well as a civil revision petition before the Principal Bench of this Court is sufficient to show that the petitioner was effectively contested the matter from 1992 to 1996. That apart, his wife and minor children had also initiated proceedings and the said proceedings came to be withdrawn. By relying upon the
Section 70 of the Transfer of Property Act, learned Senior counsel would contend that the settled issue cannot be reopened at this juncture after the sale has concluded, the entire land being the subject matter of mortgage, it is well within the jurisdiction of the respondent Corporation to bring the property for sale.
20.Learned Senior counsel for relying upon a decision of the Supreme Court in Karnataka Power Corporation Ltd and another Vs. K.Thangappan and another reported in 2006 (4) SCC 322 would submit that the discretion vested with this Court under
Article 226 of the Constitution of India may be refused to be exercised if negligence or omission on the part of the applicant to assert his right as taken in conjunction with the lapse of time and other circumstances, causes prejudice to the opposite parties. Such discretion has to be exercised judicially and reasonably and inordinate delay in invoking writ jurisdiction should not be allowed. He would further submit that mere making of representation to the authorities concerned cannot justify a belated petition. Further, learned counsel would rely upon a decision of the Supreme Court in Virender Chaudhary Vs. Bharat Petroleum Corporation and others reported in 2009 (1) SCC 297 and submit that the Hon'ble Supreme Court refused to exercise the jurisdiction when there is a delay of 1. years in the said case, to approach the Court on the ground that it was not filed within a reasonable time. Learned Senior counsel would rely upon on a decision of the Supreme Court in Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd., reported in 2008 (9) SCC 299 and submit that the auction having been completed certain right accrue in favour of the auction purchaser and once the sale is confirmed by the authority, these rights which have accrued in favour of the auction purchaser cannot be extinguished except in exceptional cases such as fraud. Therefore, it submitted that in the instant case, exception for using the expression fraud, there is no specific allegation and therefore, the auction proceedings are not liable for interference.
21.On the aspect as to what is fraud, learned Senior counsel would rely upon a decision of the Hon'ble Supreme Court in Saheb Khan Vs. Mohd.Yousufuddin and others reported in 2006(4) SCC 476 and would submit that a charge of fraud or material irregularity must be specifically made with sufficient particulars and bald allegations will not be sufficient and in the absence of any allegation regarding collusion between the respondent Corporation and the auction purchaser, the sale in favour of the third respondent is not liable to be interfered.
22.Learned Senior counsel by relying upon a decision of the Hon'ble Supreme Court in M/s.Kayjay Industries (P) Ltd Vs. M/s.Asnew Drums (P) Ltd., and others reported in AIR 1974 SC 1331 would submit that the Hon'ble Supreme Court has held that mere inadequacy of price cannot negativate every say and the respondent Corporation cannot be put off indefinitely in recovering the dues on baseless expectations and distant prospects. By relying upon the said judgment, learned counsel would submit that the sale price offered by the third respondent is adequate and matches with the valuation report of the approved valuer of the TIIC and the entire amount has been paid by the third respondent is an honest purchaser and such sale need not be interfered at this stage. Further, learned counsel would submit that such a writ petition to set aside a sale deed is not maintainable.
23.After hearing the rival contentions, the issue which is to be decided in these petitions are as to whether the sale effected in favour of the third respondent has to be interfered with or not at this stage. Though elaborate arguments were made by both the learned counsel for the petitioner and the third respondent, the issue involved in the present case lies in a narrow campus. Firstly, it has to be seen as to whether the petitioner could be allowed to reopen the matter after 11 years especially after the sale deed has been executed and registered in favour of the third respondent and the possession of the property having been handed over to them. Secondly, it has to be seen under what circumstance such sale could be interfered with.
24.The law on the subject on the question of delay and laches in approaching this court has been well settled by the Hon'ble Supreme Court in several decisions some of which have been placed before this Court by the learned counsel for the third respondent.
25.It would be appropriate to refer the latest decision of the Hon'ble Supreme Court in the case of Virender Chaudhary referred to above, in the said case, the Hon'ble Supreme Court was considering the validity of LPG distributorship granted by the Bharat Petrolem Corporation Limited. The Hon'ble Supreme Court was considering the aspect whether the challenge to such grant of dealership by a rival candidate could be allowed after a period about 1. years. The Hon'ble Supreme Court held as follows:
"14......A writ remedy is a discretionary remedy. The court exercises its jurisdiction only upon satisfying itself that it would be equitable to do so. Delay and/or laches, indisputably, are the relevant factors.
15.The superior courts, times without number, applied the equitable principles for not granting a relief and/or a limited relief in favour of the applicant in a case of this nature. While doing so, the Court although not oblivious of the fact that no period of limitation is provided for filing a writ petition, but emphasis is laid that it should be filed within a reasonable time. A discretionary jurisdiction under
Article 226 of the Constitution of India need not be exercised if the writ petitioner is guilty of delay and laches.
16.In Uttaranchal Forest Development Corpn. v. Jabar Singh this Court held: (SCC p.137, para 43).
"43...It is not in dispute that the effective alternative remedy was not availed of by many of the workmen as detailed in paragraphs supra. The termination order was made in the year 1995 and the writ petitions were admittedly filed in the year 2005 after a delay of 10 years. The High Court, in our opinion, was not justified in entertaining the writ petition on the ground that the petition has been filed after a delay of 10 years and that the writ petitions should have been dismissed by the High Court on the ground of laches."
17.In NDMC v. Pan Singh this Court held: (SCC p.283, paras 16-17) "16.There is another aspect of the matter which cannot be lost sight of. The respondents herein filed a writ petition after 17 years. They did not agitate their grievances for a long time. They, as noticed herein, did not claim parity with the 17 workmen at the earliest possible opportunity. They did not implead themselves as parties even in the reference made by the State before the Industrial Tribunal. It is not their case that after 1982, those employees who were employed or who were recruited after the cut-off date have been granted the said scale of pay. After such a long time, therefore, the writ petitions could not have been entertained even if they are similarly situated. It is trite that the discretionary jurisdiction may not be exercised in favour of those who approach the court after a long time. Delay and laches are relevant factors for exercise of equitable jurisdiction. (See Govt. of W.B. v. Tarun K. Roy, U.P. Jal Nigam v. Jaswant Singh and Karnataka Power Corpn. Ltd. v. K. Thangappan
17.Although, there is no period of limitation provided for filing a writ petition under
Article 226 of the Constitution of India, ordinarily, writ petition should be filed within a reasonable time. (See Lipton India Ltd. v. Union of India and M.R. Gupta v. Union of India.
18.In Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel it was held: (SCC p.769, para 104) "104....'26.Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name, etc."
19.Recently in Khoday Distilleries Ltd. v. Scotch Whisky Assn. this Court applied the principle of waiver and acquiescence being a case involving equity and justice. Conduct of the parties has also been considered to be a ground for attracting the doctrine of estoppel by acquiescence or waiver.
20.The fifth respondent did not acquire an indefeasible right. He was selected by the Oil Selection Board. The said selection was subsequently cancelled and a letter of intent was issued in favour of the appellant in May 2004. It was not questioned immediately after issuance of the letter of intent in favour of the appellant in May 2004. In his writ application, the fifth respondent did not question the grant of dealership in favour of the appellant. He was afforded an opportunity to amend the writ petition. He filed such an application only after 16 months. However, the writ petition itself was withdrawn and only in October 2006, the present writ application was filed. From the facts as noticed hereinbefore, there can, therefore, be no doubt that from May 2004 to October 2006, the respondent did not take any step to challenge the insurance (sic issuance) of the letter of intent granting dealership in favour of the appellant".
26.In view of the law laid down as stated supra, it is to be noted that in the facts of the present case, the petitioner was contesting the action taken by the respondent Corporation under the provisions of the SFC Act, from 1992 to 1996. The petitioner has filed two suits and as against the interim order passed by the civil Court, has filed a revision before this Court and a conditional interim order was granted in the said proceedings and thereafter, his wife and minor children have also resorted to civil remedy which stood withdrawn. Thereafter, for several years, the petitioner did not take any action and in the affidavit filed in support of the writ petition certain vague reasons are given for not being able to approach this court earlier and the same are not convincing and no proof has been produced to satisfactorily explain the said inordinately delay in approaching this Court earlier. Therefore, the petitioner has acquised himself of the entire proceedings and he is not justified in approaching this Court at this juncture especially after the sale deed has been executed and registered in favour of the third respondent. Therefore, I am of the view that the writ petition filed after a period of more than 11 years, is clearly barred by laches.
27.Coming to the next ground on the allegation of fraud, it is to be seen that the Hon'ble Supreme Court in the case of Saheb Khan, referred above, as held as follows:
"13.Therefore before the sale can be set aside merely establishing a material irregularity or fraud will not do. The applicant must go further and establish to the satisfaction of the court that the material irregularity or fraud has resulted in substantial injury to the applicant. Conversely even if the applicant has suffered substantial injury by reason of the sale, this would not be sufficient to set the sale aside unless substantial injury has been occasioned by a material irregularity or fraud in publishing or conducting the sale. (See Dhirendra Nath Gorai v.Sudhir Chandra Ghosh;Jaswantlal Natvarlal Thakkar v Sushilaben Manilal Dangarwala Kadiyala Rama Rao v. Gutala Kahna Rao
14. A charge of fraud or material irregularity under Order 21 Rule 90 must be specifically made with sufficient particulars. Bald allegations would not do. The facts must be established which could reasonably sustain such a charge. In the case before us, no such particulars have been given by the respondent of the alleged collusion between the other respondents and the auction-purchaser. There is also no material irregularity in publishing or conducting the sale".
28.In view of the same, if the averments made in the affidavit filed in support of the writ petition is perused except for a vague allegation, there is no specific material placed in support of the plea that fraud has been played and therefore, the same is liable to be rejected.
29.On the aspect regarding whether the notification is vitiated, it is to noted that the entire property in question is the subject matter of the mortgage at the time when the mortgage is created there has been ground floor and two floors and it is thereafter, the petitioner has constructed the third floor. When the entire property is subject matter of mortgage which includes land and building, no error could be attributed in the sale notification brought out by the respondent Corporation. Further, it is to be noted that several orders of attachment from the Civil Courts have been made by third parties against the petitioner and the respondent Corporation and the respondent Corporation has remitted money from and out of the sale proceeds to satisfy the said orders of attachment. Therefore, on this ground also the petitioner has to fail.
30.As regards the scope of interference of this Court under
Article 226 of the Constitution of India in such matters, the Hon'ble Supreme Court in the case of Karnataka State Industrial Investment & Development Corporation Ltd., the Hon'ble Suprme Court has culled out the legal principles in such matters. The relevant portion of the said judgement reads as follows:
"19.From the aforesaid, the legal principles that emerge are: Ii)The High Court while exercising its jurisdiction under
Article 226 of the Constitution does not sit as an appellate authority over the acts and deeds of the Financial Corporation and seek to correct them. The doctrine of fairness does not convert the writ courts into appellate authorities over administrative authorities.
(ii)In a matter between the Corporation and its debtor, a writ court has no say except in two situations:
(a)there is a statutory violation on the part of the Corporation, or
(b)where the Corporation acts unfairly i.e. unreasonably.
(iii)In commercial matters, the courts should not risk their judgments for the judgments of the bodies to which that task is assigned.
(iv)Unless the action of the Financial Corporation is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the courts or a third party to substitute its decision, however, more prudent, commercial or businesslike it may be, for the decision of the Financial 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.
(v)In the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold and this could be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer.
(vi)Public auction is not the only mode to secure the best price by inviting maximum public participation, tender and negotiation could also be adopted.
(vii)The Financial Corporation is always expected to try and realise the maximum sale price by selling the assets by following a procedure which is transparent and acceptable, after due publicity, wherever possible and if any reason is indicated or cause shown for the default, the same has to be considered in its proper perspective and a conscious decision has to be taken as to whether action under
Section 29 of the Act is called for. Thereafter, the modalities for disposal of the seized unit have to be worked out.
(viii)Fairness cannot be a one-way street. The fairness required of the Financial Corporations cannot be carried to the extent of disabling them from recovering what is due to them. While not insisting upon the borrower to honour the commitments undertaken by him, the Financial Corporation alone cannot be shackled hand and foot in the name of fairness.
(ix)Reasonableness is to be tested against the dominant consideration to secure the best price".
31.In terms of the law laid down by the Hon'ble Supreme Court in the above referred cases, if the facts of the present case are examined, I am of the view that there is no mala fide exercise of power by the respondent Corporation and there is no statutory violation on the part of the Corporation since the auction has been conducted by issuing wide publication in the dailies and 13 persons have participated in the auction and the third respondent has been declared as a successful bidder. That apart, the valuation by the approved valuer also is virtually equivalent to the sale price offer. As cautioned by the Supreme Court, this Court cannot sit as an appellate authority over the action done by the respondent Corporation. That apart, the sale has already over and more than 11 years have elapsed and at this stage, I am of the view that the settled issues cannot be allowed to be unsettled.
32.For all the above reasons, the writ petitions fail and accordingly, the writ petitions are dismissed. No costs. Consequently, connected miscellaneous petitions are closed.
sms To
1.The Tamil Nadu Industrial Investment Corporation Ltd., rep. By its Chairman, Arulmanai, 27, Whites Road, Chennai - 14.
2.The Branch Manager, (Tamil Nadu Industrial Investment Corporation Ltd.) Meenakshi Complex, West Main Road, Pudukkottai.