The facts giving rise in the present case that Co-operative Bank owns property admeasuring approximately 30000 square feet with construction. The Bank was under liquidation and the District Deputy Registrar was functioning as the Liquidator. In liquidation proceedings it was proposed to sell the said land. The Bank through the Liquidator issued a tender notice on 19/09/2017. The upset price fixed at Rs. 15,01,58,000/-. The tender notice issued for two times but there were no response. Third time again tender notice was issued for same upset price. One society indicated willingness to purchase the aforesaid property and accordingly submitted its bid for an amount of Rs.5,51,11,111/- less than the upset price.
Since no decision was being taken on the bid it had approached Hon’ble High Court in Writ Petition No.8450/2018. Court on 21/01/2019 directed to take a decision on the proposal submitted by the petitioner in that regard. Liquidator by the letter dated 16/02/2019 stated that the offer for Rs.5,51,11,111/- was accepted subject to certain conditions. Two intervention applications were filed challenging the bid process.
As per clause 22 of the tender notice Bids cannot be submitted below base/upset price which is fixed for Rs.1501.58 lacs. Obviously, bid of Society was not a valid bid at all in view of the condition imposed by Clause 22. It is thus clear that pursuant to the third tender notice dated 16/12/2017 no valid bid quoting at least the upset price was received. Liquidator pleaded that, acceptance of bid for a reason that valuation of property was not correctly made and after correcting mistake bid was found to be proper. In the present case, after obtaining revised value of property, fresh auction notice ought to have been published indicating reduced upset price than what was indicated in earlier notice. It was not done. If Liquidator intended to accept bid lower than upset price quoted in tender notice the notice to public at large ought to have been given. All further action taken after the bid of the Society was unnecessary and not permissible in terms of the tender notice itself. So present acceptance of bid not sustainable in law. Hence, bid liable to be set aside.
Jitendra Jain vs. State, W.P.no.2975/2019, Mumbai