Back
2023 Supreme(Bom) 563
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
REVATI MOHITE DERE, GAURI GODSE, JJ.
Hotel Avion Private Limited – Appellant
Versus
State of Maharashtra – Respondent
Criminal Appeal Nos. 1127, 1323 of 2018
Decided On : 14-07-2023
Advocate Appeared:
For the Appellants : Mihir Desai, Vijay Hiremath, Arati Ranade, Sanskriti Yadav.
For the Respondents: Subhash Jha, Ghanshyam Upadhyay, Siddharth Jha, Monika Kale, Alka Pandey, P.P. Shinde, Meghna Gowalani, Amrut Pawar.
The Competent Authority and the MPID Court acted in the best interest of the depositors as per the MPID Act, and the objections raised by the appellant were not substantiated.
Headnote:
MPID Act - Auction Proceedings - Sections 11, 7, 10, 13 - Summary of Acts and Sections: The court discussed the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 and its relevant sections, including Sections 11, 7, 10, and 13. The court analyzed the compliance with the guidelines issued by the Hon'ble Supreme Court in Order dated 11th May 2010 and the terms and conditions of the auction notice. The court also considered the financial capacity of the bidders and the deposit of the sale price within the stipulated time.
Fact of the Case:
The appeals were filed challenging the orders passed by the Learned Special Judge of the MPID Court, accepting respondent no. 3 as a successful bidder in the auction proceedings for the sale of Hotel Jal property. The appellant raised objections regarding the financial capacity of respondent no. 3 and non-compliance with the auction notice terms and guidelines issued by the Hon'ble Supreme Court.
Finding of the Court:
The court found that the Competent Authority and the MPID Court rightly accepted respondent no. 3 as the successful bidder based on the highest bid offered and the deposit of the entire sale price. The court also noted that the Competent Authority acted in the best interest of the depositors as per the MPID Act. The court dismissed both appeals, concluding that the impugned orders did not warrant any interference.
Issues: The issues revolved around the compliance with the guidelines issued by the Hon'ble Supreme Court, the financial capacity of the bidders, and the deposit of the sale price within the stipulated time.
Ratio Decidendi: The court held that the Competent Authority and the MPID Court acted in the best interest of the depositors as per the MPID Act. The court also found that the objections raised by the appellant regarding the financial capacity of respondent no. 3 and non-compliance with the auction notice terms and guidelines were not substantiated.
Final Decision: Both appeals were dismissed, and the interim relief was continued for a period of three weeks.
JUDGMENT :
GAURI GODSE, J.
Brief Facts:
1. Both the Criminal Appeals are filed under Section 11 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (“MPID Act”) for challenging the orders passed by the Learned Special Judge of the MPID Court by which the learned Judge accepted the respondent no. 3, as a successful bidder on 14th August 2018 in the auction proceedings for sale of Hotel Jal property.
2. Criminal Appeal No. 1127 of 2018 is filed under Section 11 of the MPID Act for challenging the Order dated 28th August 2018, by which Miscellaneous Application No. 1100 of 2018 preferred by the appellant was rejected; Order dated 30th August 2018, by which Miscellaneous Application No. 1099 of 2018 was partly allowed; and Order dated 14th August 2018, by which the respondent no. 3’s Miscellaneous Application No. 186 of 2018 was allowed by the Special Judge MPID Act, Mumbai (“the Special Judge”). By way of amendment, the appellant also challenged the Orders dated 19th October 2018 below Exhibit 6 and 13th November 2018 below Exhibit 9 in Miscellaneous Application No. 186 of 2018, passed by the Special Judge. The appellant also prayed for directing the Competent Authority to forfeit the amount paid by respondent no. 3 as per the auction notice dated 10th January 2018.
3. The appellant has also preferred Criminal Appeal No. 1323 of 2018 for challenging the Order dated 19th October 2018, passed below Exhibit 8 in Miscellaneous Application No. 186 of 2018, by the Special Judge. Both the Appeals are heard together and disposed of by this common Judgment and Order.
4. By the impugned Order dated 14th August 2018, respondent no. 3’s bid was accepted as being the highest bid and respondent no. 3 was directed to deposit the entire amount of the sale price within 60 days.
5. By the impugned Order dated 28th August 2018, the learned Special Judge rejected the Miscellaneous Application No. 1100 of 2018 filed by the appellant by holding that the appellant had not disputed the financial status and locus of the bidders till the date of auction proceedings were completed and now only the sale transaction was to be executed. Miscellaneous Application No. 1100 of 2018 was filed by the appellant, praying for directing respondent no. 2-the Competent Authority to file a compliance report whether, while accepting the bid for Hotel Jal property, the guidelines given by the Hon’ble Supreme Court in Order dated 11th May 2010 (“said guidelines”) were followed. The appellant had also prayed that in the event of non-compliance with the said guidelines, the auction proceedings with respect to the Hotel Jal property be set aside.
6. By the impugned Order dated 30th August 2018, the learned Special Judge partly allowed the application filed by respondent no. 3 and directed to correct the roznama dated 14th August 2018 for correcting the bid amount as Rs. 46.75 crores instead of Rs. 46.70 crores.
7. By the impugned Order dated 19th October 2018 passed below Exhibit 6, respondent no. 3 was granted an extension of time up to 26th October 2018 till 2:45 pm to deposit the remaining amount of the sale price. It was recorded in the said Order that respondent no. 3 had already deposited an amount of Rs. 25.50 crores and had prayed for an extension of time to deposit the remaining amount of Rs. 21.25 crores. By Order dated 13th November 2018 passed below Exhibit 9, respondent no. 3 was granted an extension of time for three weeks to deposit the balance consideration amount of Rs. 19.25 crores. The said Order dated 19th October 2018, passed below Exhibit 8, is also challenged by the Appellant by filing separate Criminal Appeal No. 1323 of 2018.
8. In the year 2000, MPID Special Case No. 36 of 2000 was filed against the promoter/director of C.U. Marketing Company. By a notification dated 17th May 2000, a total of 18 properties belonging to the said company were proposed to be attached. Out of said 18 properties, the property at serial no.
