WEST BENGAL FINANCIAL CORPORATION Vs. MOCKE INDIA PRIVATE LTD
LAWS(CAL)-1996-5-10
HIGH COURT OF CALCUTTA
Decided on May 10,1996

WEST BENGAL FINANCIAL CORPORATION Appellant
VERSUS
METCOCKE (INDIA) PRIVATE LTD. Respondents




JUDGEMENT

S.K.Mookherjee, J. - (1.)-This appeal is at the instance of West Bengal Financial Corporation and its three officers. It is directed against the order of a learned single Judge, dated 20th December, 1989, whereby an application for writ, preferred on behalf of respondent No.1, had been partly allowed.
(2.)Relevant facts are more or less admitted. The respondent No.1 obtained loan in different instalments, beginning from 1976, approximately of a sum of Rs. 9.72 lakhs, the interest on which amounted to Rs. 12,63,728.83 and other alleged dues, roughly of Rs.1 lakh, which ultimately, according to the appellant, on 28th February, 1987, amounted to Rs. 30,54,000.00 an odd. The said amount was secured by fixed and/ or black assets of the respondent company, including land, building, plant and machinery and the amounts were to be repaid by 15 half yearly instalments, as initially agreed upon. For diverse reasons respondent No.1, could not repay such loan and, accordingly, upon invocation of its powers under sections 29 and 30 of the State Financial Corporation Act, the appellant took over possession of the factory with all its plants and machineries in its entirety. By two advertisements, dated 5th of May, 1986, in two newspapers, the said factory in its entirely was proposed to be sold on 'as is where is basis.' The respondent company, by its letter dated 29th May, 1986, objected to the sale being held in pursuance of the said two advertisements, inter alia on the grounds that the advertisements understated the productive capacity of the plains and machineries and at a subsequent stage another objection was raised for non-disclosure of the area of land pertaining to the property, which according to the respondent No.1 being nearly about 46 acres, could be said to be sufficient to attract higher offers. According to the report of the valuer appointed by the appellant the entire factory with plant and machinery, stock etc. could fetch a fair market value of approximately 15,52,000.00 ultimately the auction purchaser, client of Mr. Jayanta Mitra, gave an offer of purchasing the property at Rs.11 lakhs and since the corporation's, attempt to procure better offer through Banks and financial institutions, including the Steel Authority of India proved abortive negotiation was undertaken with the auction purchaser, who persuaded to increase his offer to Rs. 18 lakhs. On receipt of such offer, by its letter dated 1st of April, 1987, the Corporation informed the respondent No.1, to arrange for obtaining a better offer within 15 days along with a Bank Draft covering such offer but no enhanced offer could be procured by respondent No.1, with the result that, by its letter dated 16th April 1987, the bid of 18 lakhs had been accepted and Rs.6 lakhs were received from the intending purchaser as part payment. In the background of such factual developments, the writ application, out of which the present appeal arises, had been moved by respondent No.1 inter alia, praying for recalling and cancellation of the intimation dated 1st of April, 1987, issued by the appellant, and with a prayer for interim injunction, restraining the appellant from effecting sale of the respondent No.1's factory and from delivering possession thereof to any person.
(3.)In the said Writ proceeding, an affidavit-in-opposition had been filed on behalf of the present appellant, inter alia, justifying the correctness of the statement about productive capacity of the plant and machinery, installed in the factory of the writ petitioner. From the materials produced before the trial court, it appears that the valuer appointed by the respondent No.1, valued the land at Rs.9.20 lakhs, whereas the valuer appointed by the appellant valued the land at Rs. 8,08,000.00 approximately. The learned trial Judge by the impugned order to a conclusion that in view of non-disclosure of the area of land and the understatement of the productive capacity the auction sale was vitiated by material irregularity and set aside the accepted offer of Rs. 18 lakhs with liberty to the appellant to issue fresh notice after proper valuation report with notice to the writ petitioner and after disclosure of the nature and extent of the property afresh in the tender notice. The present appeal is directed against such conclusions.
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