(Arun Mishra and Amitava Roy, JJ.)
Maharaji Education Trust ___________________________ Petitioner
v.
Housing and Urban Development Corporation Ltd. & Ors. _______________________________________________ Respondent(s)
M.A. Nos. 293-295/2017 in C.A. Nos. 6463-6464/2017, decided on February 9, 2018
With
I.A. No. 7705/2018 – For freezing the accounts of Respondent No. 2 and for directions) With M.A. No. 346/2017 in C.A. No. 6466/2017 @ SLP(C) No. 5425/2017 (For appropriate orders/directions) Conmt. Pet.(C) No. 1593/2017, Conmt. Pet.(C) Nos. 1590-1592/2017 In C.A. Nos. 6463, 6464, 6465 & 6466 of 2017 (With appln.(s) for appropriate orders/directions) M.A. No. 1018/2017 in C.A. No. 6466/2017 @ SLP(C) No. 5425/2017 (For appropriate orders/directions) Conmt. Pet.(C) Nos. 1804-1806/2017 in M.A. Nos. 293-295/2017 in C.A. Nos. 6463-6464/2017 Diary No. 31927/2017 M.A. No. 1747/2017 in C.A. No. 6466/2017 (For clarification/direction/appropriate orders)
The Order of the court was delivered by
Order
1. Heard learned counsel for the parties.
2. This court has decided the matters on 8.5.2017 and following observations were made in para 20-21:
“20. The Educational Trust is running various institutions and hospitals but at the same time it is not making payment of dues of loan amount to HUDCO by which money it established them. The DRAT in its order dated 6.10.2010 in Appeal Nos. 120/2008 and 124/2008 has noted conduct of Trust and recorded the following findings:
“74. From the above said facts and circumstances the following points emerge:
(b) Before HUDCO they moved OTS for Rs. 240 crores whereas HUDCO was claiming Rs. 250 crores or more. However, the Court was informed that OTS was for Rs. 75.07 crores only. The earlier OTS moved for Rs. 80 to 90 crores had found no favour with the HUDCO authorities. How it could have agreed to the proposal of Rs. 75.07 crores only. Even after I heard the final arguments, the borrowers moved yet one more application for not announcing the judgment as they wanted to settle the matter with HUDCO. I gave them 15 days more time. It transpired that they had again made proposal in the sum of Rs. 75.07 crores. It is apparent that the borrowers want to bid for time on one pretext or the other. In this respect mala fides are writ large on them.
(e) At best, it can be said that the borrowers had no intention to apply for OTS at Rs. 240 crores. The authorities were, however, misled. Meeting of minds is the sine qua non of an agreement coercion, force, misrepresentation, fraud or anything of the like have no place at all. Although, the action of the borrowers borders the contempt of court, yet due to lack of mens rea, lack of proper and direct evidence not touching the heart of the problem, it would not be worthwhile to initiate action under the Contempt of Courts Act or under Section 340 Cr.P.C.
(f) However, at the same time, the conduct, misrepresentation and bizarre behaviour of the borrowers cannot be swept under the carpet. It is very easy to gauge into antecedents of borrowers particulars that of Dr. Mahalingam who is responsible and liable for admitted interpolations and alterations. Can allegations against Mr. Naresh Chandra and two/three officers of HUDCO without being substantiated any cogent and plausible evidence come to the rescue of the borrowers? All these facts and circumstances will be put in the scales of Justice and their pros and cons would be evaluated as per law. One fact is clear that the borrowers deserve no sympathy at all. Since all these drama was created to take a few dates, therefore, instead of taking action under the Contempt of Court Act and Section 340 Cr.P.C. it would be worthwhile to come to the main point and action be initiated accordingly.”
21. It is apparent from averments made by the Trust itself that it has more than 700 employees and 3000 students are taking education but it is shocking and surprising that the amount due to HUDCO taken as loan in 1995 is not being paid which has amassed to approximately Rs. 480 crores at present.”
3. The conduct was noted ultimately in para 40 and requisite directions for the sale of property in phased manner were issued in para 42 of the order. Following directions were issued:
“42. Thus we direct as under:
(1) That Educational Trust is directed to settle scheme of repayment with HUDCO within one month and to start payment of dues w.e.f. month of June, 2017.
(2) On failure of Education Trust as per aforesaid direction or in case of default it would be open to HUDCO to sale approximately 43 acres of the land which was mortgaged with it to realize its dues in the legally permissible manner.
(3) In case the proceeds from sale of approximately 43 acres of land are not sufficient to satisfy the dues of HUDCO, it would be open to sale property No. 1 to 5 or its part which may be necessary for realization of the outstanding dues.
(4) However, 21 acres of property which has been obtained in exchange from Awas Parishad cannot be sold. It is only in the circumstance if Arbitrator disallows the claim of SGS Constructions for purchase of 21 acres of said property can be sold not otherwise. That too if dues of HUDCO remain outstanding after sale of approximately 43 acres of land out of Item No. 6 mortgaged initially and property item No. 1 to 5 which are under mortgage. Let the Arbitrator also expedite the matter and decide the proceedings as far as possible within two months.”
4. Thereafter, the Education Trust failed to comply with the order. In support of the order nothing has moved as such. The petitions were moved in this court. The recovery became impossible. This court has passed further order on 28.8.2017 so as to comply with the order. Defiance of the order of this court was noted. This Court directed the auction of the property as per the direction No. 2 of para 42 of property of 42.845 acres. Following orders were passed subsequently on 20th September, 2017 :
“Heard the learned Solicitor General and learned senior counsel appearing for the parties.
These applications have been filed by the applicants in which it has been stated that the directions of this Court in the main judgment are being violated by inclusion of some of the part of the property, which was obtained under exchange, shown at Serial No. 4 which could not have been sold and the property mentioned at Serial Nos. 2 and 3 in that order are to be sold first. It is conceded that due to some error the discrepancy in the notification for auction has been made as some more area has been mentioned. It should have been 42.845 acres only. Thus, we direct that a corrigendum be issued within 48 hours by the Recovery Officer from the receipt of this order.
Secondly, we make it clear that the order in which property is to be sold has been clearly mentioned by this Court in the main judgment. The reserved price for 42.845 acres is Rs. 317 crores. Obviously, in case the proceeds are not sufficient, the property mentioned at direction No. 3, Item 1 to 5 shall have to be sold. Let the auction be held as scheduled on 6th October, 2017 and the bids of the auction be placed before this court for confirmation and consideration on 9th October, 2017.
The learned Solicitor General stated that the demarcation of the area is also required to be done. Let the demarcation be done between area obtained on exchange and area which has been put to auction. The demarcation be done and it will be mentioned in the notification for auction also, within 48 hours from the receipt of the copy of this order. List on 9th October, 2017.
(Emphasis supplied)”
5. The auction was held on 6th October, 2017 but it appears that no buyer turned up. Again this Court has passed following order on 9th October, 2017 :
“As was expected by this Court, auction has not taken place even, on the date fixed, for the purpose of auction of the property, as no bidder came to offer the bid.
As ordered by this Court, demarcation had to be done. Demarcation has been done only a day before, that is, on 5.10.2017, however, same ought to have been done, as per the order passed by this Court, much earlier. It was submitted that a Public Notice has been issued by M/s. S.G.S. Construction & Developers Pvt. Ltd., pointing out the litigation which are pending in the matter.
It was also submitted on behalf of the M/s. S.G.S. Construction & Developers Pvt. Ltd. that they are ready to purchase the entire property, including the Medical College etc., for approximately Rs. 4,840,000,000/- (Rupees Four Hundred Eighty Four Crores) liquidating the entire amount. Statement is placed on record. However, it was submitted by learned Solicitor General, appearing for HUDCO, that the land is likely to fetch a better value in an auction.
Let auction be held first with the respect to the property mentioned at Serial No. 2 viz. 42.845 acres. The auction be held on 13th November, 2017. Notice for auction to be issued by tomorrow, by concerned officer, including in the notice, the orders which have been passed by this Court which have a bearing on the rights of the parties.
Learned Solicitor General appearing for HUDCO, as prayed, is granted liberty to upload all orders alongwith the auction notice, including the factum of demarcation and maps etc. of the said property to be auctioned.
It was assured that once the orders are uploaded on the website, no further public notice shall be issued by the parties. None of the parties shall indulge in any public notice so as to interdict the auction.
It is open to M/s. S.G.S. Construction & Developers Pvt. Ltd. to participate in the public auction. List the matter on 17th November, 2017.”
6. Again the auction was held for 42.845 acres of land, however, it could not succeed as no buyer turned up. Thereafter, on 21st November, 2011 this Court noted that not a penny has been paid by the Education Trust and the auctions held have failed to bring any buyer as willingness was shown by M/s. S.G.S. Construction and Developers Pvt. Ltd., the agreement holder, to purchase the property and to pay the amount to HUDCO. HUDCO had made an offer to make the sale and to give 5 per cent rebate on the reserve price. The reserve price fixed for auction was Rs. 317/- crores. M/s. S.G.S. Construction has prayed for grant of further rebate that has been declined by the board and it has been resolved that it would only give 5 per cent rebate over the reserve price fixed for auction. Prayer has been made to this Court to provide further rebate but it is not for this Court to provide any rebate.
7. Ultimately, it has been agreed by HUDCO as well as by M/s. S.G.S. Construction and Developer Pvt. Ltd. to finalise the deal with 5 per cent rebate in the reserve price. The amount thus worked out as:
| Reserve price | = | Rs. 317.00 crores |
| (minus) 5 % | = | Rs. 15.85 crores |
| = | Rs. 301.15 crores |
8. As the offer is accepted by M/s. S.G.S. Constructions and Developers Pvt. Ltd. as made by HUDCO, let the amount be paid within three months from today. On the amount being deposited, proper conveyance deed shall be executed by the HUDCO in favour of M/s. S.G.S. Construction and Developers Pvt. Ltd. with respect to 42.845 acres of land, within seven days of payment and the conveyance charges shall be borne by the purchaser.
9. An application has been filed by HUDCO for freezing the accounts of the Maharaji Education Trust, who is the willful defaulter. Let reply be filed within 15 days.
10. Let the amount of Rs. 25/- crores be deposited, as submitted, within three days from today.
11. List on 23.2.2018.
———
