Even le­gal sale can be set aside if price in­ad­e­quate: HC

The Free Press Journal - - MUMBAI - STAFF RE­PORTER

Ob­serv­ing that a sale of a prop­erty could be set aside if the con­fir­ma­tion of the sale is at a ‘grossly in­ad­e­quate’ price, the Bom­bay High Court re­cently dis­missed a plea moved by Ever­est Fin­cap pri­vate lim­ited. The HC has also im­posed costs of Rs 1 lakh on the firm.

A di­vi­sion bench of Jus­tice Bhushan Gavai and Jus­tice Riyaz Chagla heard a writ pe­ti­tion filed by Ever­est Fin­cap, chal­leng­ing the Au­gust 2008 or­ders of the Debt Re­cov­ery Ap­pel­late Tri­bunal (DRAT), Mum­bai, which had set aside the or­ders of the Debt Re­cov­ery Tri­bunal (DRT).

The DRT had passed the or­der in the favour of Ever­est Fin­cap, af­ter an of­fi­cial liq­uida­tor was ap­pointed, who sold the prop­erty to the firm. The prop­erty was sold af­ter the firm made a fi­nal set­tle­ment and val­ued the 28,437.29 square me­ters mill land at the rate of Rs. 39.95 crore.

Sub­se­quently, the di­rec­tors/guar­an­tors brought to the no­tice of DRT (be­fore the same judge/pre­sid­ing of­fi­cer) that cer­tain facts of the case were sup­pressed.

The DRT’s or­ders were then chal­lenged be­fore the DRAT, which quashed it on the ground that ma­te­rial facts were not brought on record. The DRAT also con­sid­ered the fact that some par­ties were ready to get the sub­ject prop­erty sold at Rs 70 crore ap­prox­i­mately.

Hav­ing ag­grieved by the or­ders of the DRAT, the Ever­est Fin­cap ap­proached the Bom­bay HC through se­nior coun­sel P Chi­dambaram, claim­ing that all its pay­ments were made within the four walls of law.

How­ever, the judges re­lied upon the rul­ing of the Supreme Court, wherein the apex court had held ‘even if there is no ir­reg­u­lar­ity, fraud in the con­duct of the sale, if it is found that the con­fir­ma­tion of the sale is at a grossly in­ad­e­quate price, then the sale can be set aside.’

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.