- (1.) THIS order will dispose of Chamber Summons No.859 of 2004 as well as Commissioner’s Report dated 12th August 2004 and praecipe filed on behalf of Mr.Deepak Singh, Advocate dated 29th September 2004. The issues raised in all these three proceedings are overlapping, for which reason, I think it appropriate to dispose of all the proceedings by common order.
(2.) THE relevant facts for deciding the matter in issue are as follows: In arbitration proceedings between Claimants and Defendants, consent Award was passed on November 3, 2003. The Claimants took out Execution Application No.77 of 2002 for enforcement of the said consent Award. In the course of Execution proceedings, property situated at CTS No.513, 514, 541 admeasuring 13701.3 square meters equivalent to 16373 square yards situated at Kajuwadi, Sahar Road, Behind Gold Spot Factory, Chakala, Andheri (East), Mumbai - 400 099 was to be sold by public auction in terms of the order passed by this Court. The Commissioner for Taking Accounts accordingly issued public notice dated 16th December 2003, which was published in the Free Press Journal, Mumbai on December 19, 2003. The notice clearly mentioned that the said property was to be sold along with encroachments thereon and more particularly described in Schedule ‘1’ in the terms and conditions of sale. The notice provided that the intending offerors can have inspection of the said property on 24th December 2003 and 7th January 2004 between 12.00 noon to 4.00 p.m. The offerors were expected to give offers in a sealed cover along with Demand Draft/Bank Pay Order for Rs.10,00,000.00 (Rupees Ten Lakhs) in favour of the Commissioner, High Court, Bombay on or before 4.00 p.m. on 14th January 2004. The notice also mentioned that the offer so received will be considered by the Commissioner at his office on 15th January 2004 at 12.00 noon and that the offerors should remain present and raise their offer, if they so desire. It also specified that the said sale was on "as is where is basis" and "as is what is basis". The offers so received were to be then produced before the Judge in Chamber for the confirmation. The offeror declared as the purchaser was obliged to pay 25% of the purchase price within seven days from the date of the confirmation and the balance purchase price within 30 days of the date of sale. It also provided that in case of default, the deposit amount of Rs.10,00,000.00 (Rupees Ten Lakhs) will be forefeited. The terms and conditions of sale were as follows: "The particulars and conditions of Sale relating to the immovable property popularly known as "Chakala property" and more particularly described in the Schedule hereto bearing C.T.S. No.513, 514 and 541 admesuring 13,701.3 sq.mt. equivalent to 16373 sq.yards situated at Kajuwadi, Sahar Road, Behind Gold Spot Factory, Chakala, Andheri (E), Mumbai 400 099, along with encroachments thereon, which property is in possession of the Applicants, who are also Mortgagees of the said property and the Decree holders against the Respondents, will be put up for sale by public auction on the 15th January 2004 at 12 noon by the Commissioner, High Court, Bombay at his office on the 3rd floor, P.W.D. Building, Opp. C.T.O., Flora Fountain, Mumbai 400 023 in pursuance of the Order passed in the above Execution Application No.77 of 2001 and hearing date the 7th day of April 2003 and further orders dated 10th November 2003 and 11th December 2003 passed by the Hon’ble Court on Commissioner’s Reports dated 6th November 2003 and 8th December 2003. Detailed particulars of the said immovable property along with the plan are given in the Schedule - 1 hereto. CONDITIONS OF SALE OF THE PROPERTY DESCRIBED IN THE NOTIFICATION OF SALE ARE: 1. The intending purchaser shall submit his offer in a sealed cover in the office of the Commissioner for Taking Accounts, High Court, Bombay on or before 14th January 2004 before 4.00 p.m. along with D.D./Bank’s Pay order of a value of Rs.10,00,000 (Rupees ten lakhs only) issued in favour of the "Commissioner, High Court, Bombay" as a deposit for participating in the said auction. 2. The offers so received will be opened on the day of auction in the presence of the offerors. All the offerors present will be allowed to bid more/higher than the highest bid opened from the sealed envelopes and highest bidder thereafter will be declared as a purchaser. Any person attending the auction, other than the offerors, shall also deposit Rs.10,00,000 (Rupees Ten lakhs only) before bidding in the auction sale. 3. The property shall be put up for sale at a sum to be fixed by the Commissioner at the time of sale. The highest bidder will be the purchaser wand if any dispute arises as to the last or highest bid, the same shall be put up again at the last undisputed bid and resold. 4. No person shall at any bidding offer a less sum than what shall be fixed by the Commissioner or retract a bid. 5. The sale is on "as is where is basis" and "as is what is basis" and the purchaser will have to take care of all liabilities and encroachments attached to the property. Inspection of documents shall be given to intending purchasers by Claimants’ Advocates M/s.Ashwin Ankhad and Associates, 101, Podar Chambers, S.A.Brelvi Road, Near Horniman Circle, Fort, Mumbai 400 001. 6. The Purchaser shall at the time of sale, subscribe his name and address in the bidding paper and all written notices and communications and summons shall be deemed duly delivered to an served upon the Purchaser by being left for him at such address, unless or until he is represented by an Advocate entitled under the rules to act in the suit or matter. 6A. As per the orders of the Hon’ble High Court passed on 29th September 2003 and on 11th December 2003 the Commissioner shall put up the offers received in the auction after the bid is held between the offerors to the Hon’ble High Court for confirmation. 7. The Purchaser shall within 7 days of the Confirmation of sale, deposit 25% of the purchase money with the Commissioner, failing which initial deposit shall be forfeited and the property shall be put up for resale. Any deficiency of price which may arise on a re-sale by reason of the purchaser’s default and all costs and expenses occasioned by such re-sale shall be recoverable from the defaulting purchaser under an order to be obtained from the Judge in Chamber. 8. The sale is subject to the confirmation by the Hon’ble Court. As per the order passed by Hon’ble High Court on 11th December 2003, the last offer given at the 3rd Auction held on 5th November 2003, by M/s.Zoom Developers for Rs.3.15 crores is to be kept open. 9. The purchaser shall pay to the Commissioner the balance of the purchase money together with the amount of stamp duty payable on the conveyance to be executed by the office of the Commissioner or on the sale certificate to be issued, within 30 days from the date of the auction or within such further time as may be allowed by the judge in Chambers and if the said amount is not so paid, the deposit may if the Judge thinks fit be forfeited to the Government after defraying the expenses of the sale, and the property shall be resold and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold. Any deficiency of price which may arise on a re-sale by reason of the purchaser’s default and all costs and expenses occasioned by such re-sale shall be recoverable from the defaulting purchaser under an order to be obtained from the judge in Chamber. 10. Upon payment of the full purchase money and the amount of stamp duty in the manner aforesaid and on confirmation of the sale by the Court the purchaser shall be entitled to possession of the property from the Applicants who are in possession of the property and to the rents and profits of such parts as are let as from the date of such payment, and shall be entitled to a proper conveyance from the Commissioner. Such conveyance shall be prepared by and at the expense of the purchaser, such expenses to include the stamp duty, registration fee. The Commissioner in turn will also pay to the Applicants M/s.Camoron Finance and Investments a sum of upto Rs.5.15 crores out of the sale proceeds received under clauses (7) and (9) above, as per the order dated 7th April 2003 passed by this Hon’ble Court in Judges Order No.77 of 2003. Out of the said sum of Rs.5.15 crores, which comprises of Rs.4.99 crores towards balance principal amount under the award and a sum of Rs.14.48 lakhs towards expenses of sale of Bahar property, the Commissioner has verified the expenses of sale at Rs.14.48 lakhs as per the order dated 28th April 2003 passed by the Hon’ble High Court of Bombay. 11. In the event of the conveyance to the purchaser not being executed within thirty days from the date of the confirmation of the sale, it shall not be lawful for the purchaser at the expiration of such thirty days to object, on the ground of his not having received his conveyance or otherwise, to such distribution or payment of the purchaser money by the Commissioner to the Applicants. 12. The Purchaser shall not be liable to pay the outgoings previous to day of payment of the purchase money and the rents and outgoings shall be apportioned, if necessary. The Purchaser shall at his own expenses take such steps as may be necessary for the purpose of obtaining possession. 13. The production and inspection of all deeds, evidence and muniments of title which are not in possession of power of the party having the conduct of the proceedings and the procuring and making of all certified, attested or other copies of extracts or from any registers, deeds, wills or other documents, and of all declarations or other evidences as to identify, whether required fro the verification of the abstract or for any other purpose shall be at the expenses of the purchaser requiring the same. 14. If any error or mis-statement shall appear to have been made in the particulars of description of the property, such error or mis-statement (if capable of compensation) shall not annul the sale nor entitle the purchaser to be discharged from his purchase, but a compensation shall be made to or by the Purchaser, as the case may be and the amount of such compensation shall be settled by the Commissioner. 15. A list of documents pertaining to the property including Title Deeds, mortgages etc. is given in Schedule-2." In continuation of the public notice published on 19th December 2003, further notice of sale was issued referring to the previous notice dated 19th December 2003 with clarification that the offerors should give their offers in sealed cover so as to reach the Commissioner on or before 15th December 2004. Pursuant to the above advertisement, offers were received in the Office of the Commissioner. One such offer received in sealed cover was from Sudarshan Constructions, Applicants in Chamber Summons No.859 of 2004, who offered Rs.4.11 crores for the property and also enclosed pay order of Rs.10,00,000.00 (Rupees Ten Lakhs). This offer is sent on the letter head of Sudarshan Constructions dated 14th January 2004 and is signed by one Vaishali for and on behalf of A.S.Nagpal and others. The letter clearly states that inspection of the subject property has been taken and the offer of Rs.4.11 crores to purchase the said property was given, accompanied by the demand draft of Rs.10,00,000.00 (Rupees Ten lakhs) dated 15th January 2004 drawn on Bank of Baroda towards initial deposit. This offer in sealed cover on behalf of Sudarshan Constructions was presented by one Mr.Pradeep Wadhwa before the Commissioner, claiming to be partner of Sudarshan Constructions. As per the notice, competitive bidding was to take place on 15th January 2004. At the said bidding, Mr.Pradeep Wadhwa was resent and participated in the bidding on behalf of Sudarshan Constructions. The bidding was mainly between Sudarshan Constructions and M.B.Developers. Representative of M.B.Developers gave offer with regard to the subject property, up to Rs.5.48 crores, whereas, Mr.Pradeep Wadhwa, representative of Sudarshan Constructions raised that offer up to Rs.5.51 crores. As that was the highest offer received, the Commissioner submitted report before the Court, which came up for consideration on 20th January 2004. The Court after considering the relevant aspects, passed the following order: "Perused the report submitted by the Commissioner dated 15th January 2004. The highest bid has been received from M/s.Sudarshan Construction in the amount of Rs.5 crores 51 lakhs, the same is in excess of the fair market price in respect of the subject property indicated in the second valuation report. Mr.Pradeep Wadhwa, claiming to be partner of Messrs.Sudarshan Construction is personally present in Court and agrees to abide by the usual terms and conditions. Accordingly, sale in favour of Messrs.Sudarshan Construction is confirmed on usual terms and conditions. Appropriate steps be taken in that behalf. My attention has been drawn to a letter sent by M.B. Developers, unsuccessful bidder, dated January 16, 2004. Request is made for refund of earnest money deposited by the said party. However, direction on that request is deferred for a period of 10 days from today. Mr.Shah appears for Zoom Developers and states that his client has no objection to keep the offer given by him valid for a period of three weeks from today, on the same terms, but submits that the said party would increase its offer upto 4 crores. That aspect will be considered as and when the occasion arises. The amount as deposited on behalf of Zoom Developers, which has been invested, be continued for a period of three weeks from today. Place this report for further directions along with information regarding developments on 28th January 2004 at 2.45 p.m."
(3.) THE matter then appeared on 28th January 2004, when Advocate Mr.Vijay Pandey appeared on instructions of Pradeep Wadhwa, representative of Sudarshan Constructions and informed the Court that due to unavoidable circumstances, the amount could not be deposited. The Court recorded the assurance given on behalf of Pradeep Wadhwa. The matter appeared on 28th January 2004 when the Court passed the following order: "1. Mr.Pandey has appeared on instructions of Mr.Pradeep Wadhwa, representative of Sudarshan Constructions, and states that due to unavoidable circumstances, the amount could not be deposited as was required to be done in terms of order dated 20th January 2004. however, assurance is given that M/s.Sudarshan Construction will deposit sum of Rs.50 lakhs in this Court on or before Wednesday 4th February 2004. In so far as the balance amount in terms of the order dated 20th January 2004 is concerned, assurance is given that the same will be deposited within one week therefrom. The above assurance is accepted by way of indulgence as last opportunity. 2. In the circumstances, post this matter on 5th February 2004 for further directions." ;