Shree Vadera Textiles v. Rajasthan Financial Corporation
1995-05-22
N.K.JAIN
body1995
DigiLaw.ai
JUDGMENT 1. - This case comes up on the application filed by the petitioner for calling the documents. It is also stated that earlier application dated 3.9.1990 for calling the record is also pending on which it has been ordered on 26.3.91 that the same will be considered at the time of admission/final hearing. The petitioner in all has moved four applications; application dated 3.9.1990 for calling the record from the respondent Nos. 1 and 2; application dated 23.1.1995 for placing the documents Annexure 20 to 23 on record; application dated 10.5.95 for placing the documents Annexure 24 to 28; and the application dated 10.5.95 for summoning the original documents Annexure 19 to 28. 2. On the other hand, learned counsel for the respondents submitted that the applications for calling the documents are not relevant for the disposal of the writ petition pending since 26.3.9() in admission. Calling of the documents will amount to abuse of the process of the court particularly when petitioner has no case on merits and (has) moved only with an ulterior motive and mala fides and a delaying tactics. The applications as well as the writ petition may be dismissed with costs. Before considering applications, it is necessary to see whether the petitioner has a prima facie case in his favour or not, so as to call desired documents. 3. The petitioner's case is that the petitioner-company is a duly constituted and registered private company under the Indian Companies Act on 1.12.1989 which is evident from the certificate Annexure 1. It is alleged that two units, namely, Gem Textiles (P) Ltd. and New Rajasthan Processors were situated in common premises at E-1 and E-2 MI.A., Second Phase Basni, Jodhpur, which were taken over/auctioned by the RFC under section 29 of the Rajasthan Financial Corporation Act in October, 1988, for sale/auction due to non-payment of loan. It is alleged that a notice was published in a newspaper on 7.10.1988 for the sale and auction of the disputed property of the two units, but could not be auctioned as no offer was received; so also in November, 1988, and December, 1988. It is also alleged that on coming to know (of) the said advertisement and being interested, the petitioner company gave offer for the purpose (purchase ?) of two units along with demand draft of Rs. 1.23 lakhs towards earnest money. 4.
It is also alleged that on coming to know (of) the said advertisement and being interested, the petitioner company gave offer for the purpose (purchase ?) of two units along with demand draft of Rs. 1.23 lakhs towards earnest money. 4. The main contention of the learned counsel for the petitioner is that being the highest bidder amongst three bidders, the petitioner is entitled to get the possession of the unit but the RFC did not complete the necessary formalities for sale of (the) unit, but behind his back executed sale and gave possession to the respondent No. 3 which is illegal and against the principles of natural justice. He has relied on Mahesh Chand v Regional Manager (1993) 2 SCC 279 . 5. On the other hand, Mr. Gupta, appearing on behalf of the RFC, has filed reply raising preliminary objections regarding the maintainability of the writ petition, suppression of material facts, and submits that, in fact, Durgesh Nandini Shekhawat, made an offer and from the perusal of the Annexure 2, dated 6.1.1989, it is clear that she described herself to be promoter and director of Shree Vadera Mills (P) Ltd. under incorporation and address was given at 44 K-5, Jyoti Nagar, Jaipur. He has urged that there were three bidders and, though Durgesh Nandini stood highest bidder, the deal was not finalised and the third bidder was dropped on negotiation who got his refund and after coming to know the antecedents and, on investigation, it was found that the two persons, Narayan Das Arora and Mahesh Chand Dave, are not the real enterprisers (entrepreneurs ?), but only benamidars for the defaulting units and never appeared for personal interview despite communication. He has also urged that as the letters, Annexure R/1 and R/2, Durgesh Nandini has nothing to do with the offer and has not desired to take the factory; rather (has) requested to refund the money. He has also submitted that the petitioner company was not in existence on the day of offer and Durgesh Nandini Shekhawat is not the director of the petitioner company and, therefore, as alleged, the petitioner has no right, as the offer was never made by it and the petitioner cannot take advantage out of the decision cited and further and defaulter paid nothing till today from the date of taking loan.
He has relied on U.P. Financial Corporation v Gem Cap India (P) Ltd. AIR 1993 SC 1435 . 6. Mr. Singhvi, learned counsel for the respondent, has contended that the respondent No. 3 is a bona fide purchaser. He has contended that the petitioner concern was not in existence at the time of bid and, till its existence, no right can be given but still pleaded which amounts to deliberate concealment of true facts and the writ petition is liable to be dismissed on this ground alone. It is also stated that it is nothing but a benami concern of promoters and directors of Gem Textiles (P) Ltd. and partners of New Rajasthan Processors Ltd., which was declared to be a defaulting unit. He has also contended that it is purely a contractual matter and no writ petition lies and the petitioner can file a civil suit. He has also contended that the respondent No. 3 has deposited the entire amount and started work and (is) continuing his business. The petitioner company was not in existence on the date as per their own document, Annexure 5, dated 4.9.1989; therefore, the petitioner cannot challenge the sale made in favour of the respondent No. 3 in the garb of Shree Vadera Textiles Mills (P) Ltd., whereas the offer was made on behalf of Shree Vadera Mills (P) Ltd. and as the 'Textile' part is missing at the time of offer but added later on, as a distinct entity, therefore, the writ petition should be dismissed with exemplary cost. He has further submitted that the RFC is justified and this court in the writ jurisdiction cannot sit as a court of appeal. He has relied on Ambica Textiles Ltd., In re (1950) 20 Comp Cas 160 (Cal) . 7. Mr. Gaur, learned counsel appearing on behalf of Gem Textiles (P) Ltd. defaulting unit, who has also filed a writ petition at Jaipur on 5.6.1989 bearing No. 2211/85 (M/s Gem Textiles v RFC) which was transferred by the order of this court passed in this writ petition on 6.7.94, and, on 26.9.94, by the order of the then Hon'ble Chief Justice and both the cases were ordered to be heard together.
The defaulting unit is also made a respondent in this writ petition as the application for impleading a party moved by it was allowed vide order dated 8.8.94 as the petitioner did not object. On 25.8.94, respondent No. 3 moved an application for recalling the order dated 8.8.94 on the ground that without hearing him the applicant has been made a party, which is pending. Mr. Gaur was asked to argue the case but learned counsel for Gem Textiles submits that unless the applications are decided, he cannot argue the matter. 8. Reply and rejoinder have been filed by the respective parties and I proceed to hear the applications and the case on merits. 9. Undoubtedly, this court has power to call any document which is necessary to resolve the real controversy between the parties provided it satisfied the conscience of the court. In the instant case to deal with the applications moved by the petitioner, I have carefully considered the arguments of the learned counsel for the parties and relevant documents as it is necessary to satisfy prima facie with the case of the petitioner. According to the petitioner, the calling of the documents is necessary whereas the respondents submit that it is nothing but just to delay the proceedings the petitioner has moved these applications with delaying tactics. Having heard learned counsel for the parties and after perusing the documents - Annexure 19 to 28, it shows that they are proceedings including the constitution of the committee for negotiation, etc., and they have no bearing that the deal was finalised on 1.6.1989, I am IF the view that the applications are not relevant for the present purpose, particularly, when I do not find any prima facie case in favour of the petitioner on merits. Therefore, all the four applications are dismissed. 10. So far as the merits of the case is concerned, I have perused the material on record and considered the arguments carefully, the so-called action of RFC for finalising deal in favour of the respondent No. 3 and handing over of the factory to the respondent No. 3 after advertisement and on the basis of the negotiation and, in my opinion, the same cannot be interferred with as the action is neither unfair nor unreasonable, particularly, when the petitioner has not been able to satisfy that any statutory direction has been violated.
That apart whether the auction was finalised in favour of the petitioner on 1.6.1989 or not is a question of fact and cannot be decided in the writ jurisdiction. The decision rendered by the Supreme Court in Mahesh Chand v. Regional Manager (supra) is not of any help to the petitioner wherein certain directions were issued and procedure was laid down to be adopted before selling and taking over a unit under section 29, by their lordships of the Supreme Court, holding that opportunity should be given to the appellant as, in that case, the debtor was anxious to pay off the debt and had been taking several steps to discharge his obligations, whereas in the case in hand, RFC has already taken possession of the unit from the defaulter in October, 1988, as the debtor paid nothing till date against the dues, nor the defaulter made any offer at the appropriate time of advertisement and even along with three bidders. The petitioner company cannot take any advantage of the offer made by Durgesh Nandini Shekhawat on 6.1.1989 in the absence of existence of petitioner company and that too not being a director of the petitioner company at the relevant time which is clear from Annexure 1, dated 1.12.1989. Under the circumstances, no right can be accrued to the petitioner as alleged to challenge for not finalising the sale even (as) the same was alleged to be the highest bidder. Further Durgesh Nandini had already withdrawn her offer vide letter dated 15.2.89 and had got part of her amount refunded. More so, the RFC after enquiry which is within their competence and jurisdiction has found that the so-called persons who were alleged to have come in footsteps (sic) were not fit to run the factory as (and) are benami of defaulter unit, which has earlier not paid any dues. In view of the above, it was not necessary to disclose any reason as alleged. Under the circumstances and as stated above, I am not inclined to grant any indulgence and no relief can be granted to the petitioner in the extraordinary jurisdiction, and (the writ petition is) liable to be dismissed with costs. 11. So far as the application for recalling the order of impleading Gem Textiles as a party (is concerned), no order is required to be passed as the writ petition itself has been dismissed as stated. 12.
11. So far as the application for recalling the order of impleading Gem Textiles as a party (is concerned), no order is required to be passed as the writ petition itself has been dismissed as stated. 12. In the result, the writ petition is dismissed with the estimated cost of Rs. 2,000 each payable by the petitioner to RFC and respondent No. 3. *******