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CASE NO.: Special Leave Petition (civil)  4957 of 2006

PETITIONER: Falcon Retreat Pvt. Ltd. & another

RESPONDENT: EDC Ltd. & Ors.

DATE OF JUDGMENT: 24/08/2006

BENCH: B.P. SINGH & ALTAMAS KABIR

JUDGMENT: JUDGMENT

O R D E R  

       In this special leave petition the Petitioner has impugned the  judgment and order of the High Court of Bombay at Goa dated  February 22, 2006 in Civil Writ Petition No.19 of 2006, whereby it  dismissed the Writ Petition filed by the Petitioner praying that its  proposal contained in letter dated January 18, 2006 be considered  and that Respondent No.1, herein, be restrained from selling the  assets in question to Respondent No.3.         We have heard counsel for the parties at length.  We have  carefully perused the material placed before us.  We are satisfied  that this is not a fit case for interference by this Court in exercise of  its discretionary jurisdiction under Article 136 of the Constitution  of India.

          It is not disputed that the Petitioner had committed  defaults in payment of dues to Respondent No.1.  Action was taken  under Section 29 of the State Financial Corporation Act by the  aforesaid respondent.  The property in question was attached and  possession was also taken by Respondent No.1.  The property  known as Falcon Retreat is a hotel.   

       Thereafter, Respondent No.1 made efforts to put the  property to sale by auction. Seven such attempts were made, but  either on account of non-availability of purchaser or on account of  postponement of the auction on the request of the Petitioner, the  property could not be sold.   

       On November 23, 2005, Respondent No.3, namely, L.K.  Trust made an offer of Rs.12.99 crores for the property in question.   The offer of Respondent No.3 was considered by the Board of  Respondent No.1 on December 5, 2005 and the Board resolved to  accept the offer on certain conditions.  However, the Petitioner was  informed of the private offer by Respondent No.3 and was called  upon to get a better offer, if possible, within three days.  The letter  of Respondent No.1 dated December 5, 2005 to this effect was  perhaps received by the Petitioner late on December 13, 2005.  In  its reply the Petitioner sought twelve months time to arrange a  better buyer.

       On December 12, 2005 the offer of Respondent No.3 was  accepted by Respondent No.1 and the same was communicated to  Respondent No.3 incorporating the relevant conditions for the sale.   On December 29, 2005, Respondent No.1 informed the Petitioner  that it was decided to accept the offer of Respondent No.3 to which

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the Petitioner objected by saying that the price was ridiculously  low.         On January 23, 2006, the Petitioner filed a writ petition  before the High Court praying for a Writ of Mandamus directing  Respondent No.1 to consider the proposal contained in the letter of  the Petitioner dated January 18, 2006 and to restrain the  Respondent No.1 from selling the property to Respondent No.3.

       It appears from the letter of February 6, 2006 addressed to  Managing Director of Respondent No.1 that the offer referred to in  the letter of the Petitioner dated January 18, 2006 related to M/s  Condor Polymeric.  By its letter of February 6, 2006, Condor  Polymeric made a formal offer to the Managing Director of  Respondent No.1.  This is an event subsequent to the filing of the  Writ Petition.

       The High Court by its impugned judgment and order  dismissed the writ petition holding that Respondent No.1 had  already entered into an agreement with Respondent No.3 for the  sale of the assets for a sum of Rs.12.99 crores and, therefore, there  was no question of the same being cancelled or set aside since it  represented a concluded contract between the parties.   

       We may observe that M/s Condor Polymeric is not a party  before us nor was it a party in the Writ Petition.  In an affidavit  filed before this Court affirmed on April 24, 2006, the deponent  Arvind S. Ghatkar, General Manager of the Engineering  Department of Respondent No.1 has stated that the offer of M/s.  Condor Polymeric has been considered by the Board of  Respondent No.1, and subject to the decision of this Court,  Respondent No.1 may be inclined to accept the higher offer of    Rs. 14 crores, but the Respondent No.1 would not like to go for re- auction of the property.  In its counter-affidavit filed before this  Court on April, 12, 2006, Respondent No.1 has referred to several  such proposals made by the Petitioner in the past, solely with a  view to frustrate the efforts of Respondent No.1 to sell the property  and realize its dues.    

       Having heard counsel for the parties and considered every  aspect of the matter, we are of the view that at the instance of the  Petitioner, this Court should not interfere in the exercise of its  discretion under Article 136 of the Constitution of India. An offer  has been made by Respondent No.3 and accepted by Respondent  No.1.  It was stated that though cheques have been issued by  Respondent No.3 they have not been honoured by the bank.  Even  if that be so, it is for Respondent No.1 to consider what action it  should take in such event.  If ultimately Respondent No.1 finds  that Respondent No.3 is not in a position to fulfill its commitment  and pay the price offered within the time granted by Respondent  No.1, it may proceed to consider other options.  This is entirely a  matter within the discretion of Respondent No.1.  Of course, it is  expected to act fairly and in accordance with law.  As long as it  acts within the parameters of the law, and its action is not found to  be arbitrary or unreasonable, it is entitled to take a decision which  is in the interest of Respondent No.1 \026 Corporation.  We, therefore,  dismiss the special leave petition and leave it to Respondent No.1  to proceed in accordance with law.  If Respondent No.3 makes the  payment as promised within such time as may be granted by  Respondent No.1 and fulfills the conditions of sale, that may be the  end of the matter.  But if it fails to do so, it is always open to the  Respondent to take necessary steps to safeguard the interest of  Respondent No.1 \026 Corporation which includes inter alia the  consideration of other offers made by other parties.                    The Special Leave Petition, is therefore, dismissed.  

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Consequently the interim order dated March 27, 2006 stands  vacated.