H. DASAPPA AND SONS SAPTAGIRI ENTERPRISES v. STATE OF KARNATAKA
1988-04-13
M.P.CHANDRAKANTARAJ
body1988
DigiLaw.ai
CHANDRAKANTHARAJ URS, J. ( 1 ) THESE two writ petitions are disposed of by the following common order as substantially they involve the same questions of fact and questions of law and the reliefs prayed for are more or less the same. Similarly, the petitioner in the first of the petitions mentioned is a partnership firm carrying on the business of excise contractors (Liquor) while the petitioner in the other petition is also a partnership firm carrying identical business or trade. The prayer in the first petition is for a direction or writ in the nature of mandamus directing the respondents 1 to 3, namely, the State of Karnataka, the Director of Sugar and Additional Registrar of co operative Societies and the Divisional commissioner, Bangalore, not to confitrn the sale in favour of 4th respondent as proposed in Government Letter No. D. O. No. CMW 2 COF 86 (Pll) dated 5-10-1987 and further to direct the respondents 1 to 3 to permit the petitioner-firm to better its offer or call for fresh tenders. Similarly, in the second of the petitions, the prayer is identical. ( 2 ) IT will be useful to briefly set out the facts leading to these petitions. The sale referred to in the reliefs asked for by the petitioners is the sale of the factory, machinery, etc of what was Gouribidanur sahakara Sakkare Karkane Ltd , Gouribidanur, (Kolar District) a Sugar Factory with a distillery attached to it run by a co operative Society incorporated under the Karnataka Co-operative Societies Act which was forced into liquidation under the provisions of the aforementioned Act. The third respondent-Divisional Commissioner is the Liquidator while the second respondent is the Additional Registrar of Co-operative Societies in Karnataka discharging in addition to his normal duties as Joint Registrar, the duties of the Director of Sugar. The 1st respondent is the State of Karnataka represented by the appropriate Secretary. It is unnecessary to state in detail the reasons for the liquidation and the aftermath. The liquidation was questioned, among others, by the workers and the matters stand concluded by the Judgment of this Court.
The 1st respondent is the State of Karnataka represented by the appropriate Secretary. It is unnecessary to state in detail the reasons for the liquidation and the aftermath. The liquidation was questioned, among others, by the workers and the matters stand concluded by the Judgment of this Court. Pursuant to the liquidation being upheld, the sale was pursued by the Liquidator and a notice was issued and published in the leading news papers inviting tenders for the Sugar Factory and the Distellery with all other apprutenant, land including the machinery etc subject to certain conditions enumerated in the notice. The tenderers were required to submit their offer in sealed covers which would be opened in the presence of all the tenderers who wished to be present before the 3id respondent-Liquidator on 6-5-1987. There were three others who tendered, besides the petitioners. Among the three who so tendered, the 4th respondent, in these writ petitions was one. On the tenders being opened in the presence of the tenderers on 6th May, 1987 it was noticed that one M/s. Distillery Company (Pvt) Ltd. . tendered the highest offer in the sum of Rs. 5,04,00,000/- while the 4th respondent-M/s. Siruguppa Sugars and Chemicals Ltd. , Rs. 5,01,11,111/ -. The other three tenderers were much lower by over Rs. 40 lakhs. As evidenced by the proceedings of the 3rd respondent dated 6-5-1987, it is seen that M/s. Distillery Company (Pvt) Ltd. , had imposed a condition while tendering their offer of consideration for the sale. That was to the effect that the offer was made excluding the liabilities. The Liquidator communicated his proceedings to the government. The Government in turn did not recommend the acceptance of m/s. Distillery Company (Pvt) Ltd. , on account of the condition imposed and directed the Liquidator to accept the tender of the 4th respondent which Was the second highest with a further direction that the sale in its favour should be confirmed subject to two further conditions, which, perhaps, became necessary in the light of the events that had taken place which the Government was not aware of on 6th May, 1987. They were, that the 4th respondent should be persuaded to pay a further sum of Rs. 3 lakhs which was the difference between its offer and the offer of as Distillery Company (Pvt) ltd.
They were, that the 4th respondent should be persuaded to pay a further sum of Rs. 3 lakhs which was the difference between its offer and the offer of as Distillery Company (Pvt) ltd. , and also that all the workers of the erstwhile management which was running the Sugar Factory should be taken back to work by the purchaser, a condition imposed by the Supreme Court It was further clarified by the Supreme Court that the sale should be effected imposing that as a concision, apparently, not having been informed that the process of sale had already commenced. On 5th May, 1987 the Supreme Court in Spl. Leave petition (Civil) No. 2060/1987 filed by the former workers of the Sugar Factory mage an order directing the sale of the factory as well as the Distillery subject to the condition that the workmen employed by the previous management should be re-employed by the person who purchased. That order came to be clarified further on 31-8-1987. The said spl. Leave Petition is said to be pending in the Supreme Court. Therefore, the government while issuing the directions, apparently, took note of the orders of the supreme Court in the said Spl. Leave petition and directed the 3rd respondent to impose these two additional conditions and clarification. Though by the letter of 4th May, 1987 itself 4th respondent had indicated its acceptance of the terms of sale, once again wrote on 12th October, 1987 in response to the Government letter of 5-10-1987 agreeing to the conditions directed to be added by the Supreme court in addition to the conditions imposed as per notice of sale. It is, in that circumstance, that the impugned order came to be passed by the Government leading to the present petitions. ( 3 ) THE petitioner in the first of the petitions withdrew earnest money deposit and declined to negotiate with the government as evidenced by the letter addressed by it. Similarly, the petitioner in the second of the petitions who was the 4th highest bidder did not further participate and also withdrew earnest money deposit. It is only after the government directed confirmation of of sale in favour of the 4th respondent, the present petitions have been filed. ( 4 ) MANY arguments were addressed including in respect of a question which the Court raised.
It is only after the government directed confirmation of of sale in favour of the 4th respondent, the present petitions have been filed. ( 4 ) MANY arguments were addressed including in respect of a question which the Court raised. The question that was raised by the Court was whether the government had power to interfere with the sale conducted by the Liquidator having regard to Sections 73 and 74 of the Karnataka Co-operative Societies Act. Mr. S. G. Sundaraswamy for the 4th respondent and Shri M R. Achar for the state of Karnataka have taken the Court through the provisions of the Act which provide for control by the government of all Officers under the Act which includes the liquidator. Therefore, the government is in a position to give directions to the Liquidator is not in doubt. This question was raised by the Court only on account of the Supreme Court directive being much later than the date of notice of sale. ( 5 ) THEREFORE, what really has happened is, the government instead of inviting fresh tenders has merely continued with the sale which had commenced earlier. As directed by the supreme Court in its two orders, directed the imposition of the additional conditions. Whether that is right or wrong is a matter which this Court declines to pronounce upon as it proposes to dispose of the petitions on the short question having regard to the conduct of the petitioners who participated in the sale conducted ard made offers which were far lesser than that of the 4th respondent and only on coming to know what had transplied between the 4th respondent and the 3rd respondent and the Stale government, they have now come Up professing to protect public interest end fair-play in procedure concerning sale of public properly inter alia contending that they did not have a fair opportunity ; that the Government negotiated only with the 4th respondent to the exclusion of others and therefore the Court should give them the relief which they have prayed for. ( 6 ) I am unable to see how there has been any unfair procedure adopted by the government. The highest bidder is not before the Court. He has not chosen to challenge the Government Order recommending confirmation of sale by the liquidator in favour of the 4th respondent.
( 6 ) I am unable to see how there has been any unfair procedure adopted by the government. The highest bidder is not before the Court. He has not chosen to challenge the Government Order recommending confirmation of sale by the liquidator in favour of the 4th respondent. It is the second highest bidder who is the 4th respondent with whom the government has dealt with. The question of dealing with others would arise if for any reason, the second highest bidder elso was not able to go through with the sale. The person who would stand next in the order of bid amount would get an opportunity to negotiate with the government if called to do so. As that opportunity did not occur, they cannot now come forward to contend that they must be given an opportunity to better the highest bid. I do not see that there has been any violation of the fair-play procedure which is so much emphasised by the Supreme Court since the decision in the case of Ramana dayaram Shetty v. The International airport Authority of India and Others (A. I. R. 1979 S. C. 1628 ). ( 7 ) I do not think that on the facts narrated above, there has been any failure to observe the fair-play procedure in the ma ter of conducting the sale. As already noticed, it is the conduct of the petitioners which disentitles them to prosecute these petitions. Now, the reliefs they have asked for are such though they are propounding the lofty ideal of public interest what they really wish to serve are their private trading interests and no more. ( 8 ) RELIEF under Art, 226 of the Constitution will be available to those who seek it with clean hands. Those who do not seek it with clean hands, cannot be given the relief as a matter of judicial propriety even when in some cases they may make out a case for interference. ( 9 ) IN these cases, there is hardly any scope for interference on account of any error of procedure or even on the ground of discrimination under Art. 14 of the Constitution, prima facie. ( 10 ) FOR the above reabons, these petitions are dismissed on the short ground mentioned above. Before parting with these cases, I may mention that the workers who are applicants in the Spl.
( 10 ) FOR the above reabons, these petitions are dismissed on the short ground mentioned above. Before parting with these cases, I may mention that the workers who are applicants in the Spl. Leave Petition No. 2060/1987 made an application to implead themselves as parties in these petitions. That application was directed to be heard along with the main petition. Mr. K. Subba Rao, learned Counsel for the applicants, has been heard. He has stated that the interests of the workers is paramount and therefore they seek to impleao themselves. What I have done, I think, is more to serve the interests of the workmen who have been without jobs for many long years and who require rehabilitation in their work and payment of back wages and other emoluments due to them paid at the earliest. On technical grounds, if the Court were to interfere and delay the confirmation of sale, the workers are the ones who will suffer. When this was pointed out to him he had no objection for the Court to dismiss the petitions on the short ground. ( 11 ) BUT, however, it is made clear that who ever feels aggrieved by this order, may approach the Supreme Court in the pending Spl. Leave Petition and obtain such relief or clarification as may become necessary to sub-serve their interests or the public interest. ( 12 ) SUBJECT to the above observation, these petitions are dismissed with costs. Advocate's fee of Rs. 500/- for each of the Counsel for respondents 1 to 3 and Counsel for respondent-4. Writ petitions dismissed with costs. --- *** --- .