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2011 DIGILAW 518 (GAU)

Winmaxx Management Service Pvt. Ltd. v. UCO Bank

2011-06-14

UTPALENDU BIKAS SAHA

body2011
JUDGMENT U.B. Saha, J. 1. The challenge in this writ petition is to the letter, dated 8th December, 2010, written by the Assistant General Manager, Asset Management Branch of UCO Bank, respondent No. 1, whereby and whereunder, the respondents terminated the sale process with the petitioner and forfeited the sum of Rs. 10,00,000/- (Rupees ten lakh) only for part adjustment of the loss suffered by the bank respondent due to non-fulfillment of the terms and conditions of sale by the petitioner and also called the petitioner to pay the two cheques amounting to Rs. 11,03,000/-(Rupees eleven lakh three thousand) only which were dishonoured so that the bank respondent may recover the loss in full caused by the petitioner and also for a Mandamus directing the bank respondent to execute all necessary deeds and documents in favour of the petitioner on receipt of the balance consideration of money amounting to Rs. 2,10,30,000/- (Rupees two crores ten lakhs and thirty thousand) only. 2. Heard Mr. A. K. Bhowmik, learned senior counsel as assisted by Mr T. K. Deb as well as Mr. R. Dutta, learned counsel appearing for the petitioner. Also heard Mr. S. Datta, learned counsel appearing for the bank respondents. 3. As agreed to by the learned counsel for the parties, the instant writ petition is taken up for final disposal at the admission stage. 4. Pleaded case of the petitioner, in short, is as follows: The petitioner, a company, by its letter dated 14th September, 2009 offered a rate amounting to Rs. 2,10,30,000/- (Rupees two crores ten lakh and thirty thousand) only for purchasing a hotel property namely Hotel Promila, Agartala to the respondents, who had taken over the said property under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of the Security Interest Act, 2002 (for short, 'SARFASI Act'). 5. The petitioner while offering the aforesaid sale price vide letter dated 14th September, 2009 (Annexure-4 to the writ petition) also paid an amount of Rs. 21,00,000/- (Rupees twenty one lakhs) only through one banker cheque drawn on the Lakshmi Vilas Bank Ltd. and two account payee cheques drawn on the Hongkong and Shanghai Banking Corp. Ltd. The banker cheque was issued amounting to Rs. 10,00,000/- (Rupees ten lakh) only and the account payee cheques were issued amounting to Rs. 10,00,000/- (Rupees Ten Lakh) only and Rs. 1,03,000/- (One Lakh three thousand) only respectively. 6. Ltd. The banker cheque was issued amounting to Rs. 10,00,000/- (Rupees ten lakh) only and the account payee cheques were issued amounting to Rs. 10,00,000/- (Rupees Ten Lakh) only and Rs. 1,03,000/- (One Lakh three thousand) only respectively. 6. Upon receipt of the aforesaid offer of the petitioner, the respondent bank approached the Division Bench of this Court seeking permission to complete the sale process of the aforesaid hotel premises in favour of the petitioner and ultimately on 08.10.2010, the Division Bench of this Court allowed the respondent bank to complete the sale process, as stated above, in favour of the petitioner subject to the condition that, it would keep apart an amount of Rs. 3,00,000/ - (Rupees three lakhs) only from the receipts thereof and deposit it in the Registry of this Court latest by 10.11.2010. But the bank respondent did not communicate the said order of this Court, to the petitioner, and as such, the petitioner did not pay the balance amount, for completion of the sale process. The petitioner was and is ready to complete the sale process and pay the balance amount. 7. It is also pleaded, that the respondent, being an authority, under Article 12 of the Constitution, is under legal obligation to sell the property to the petitioner on receipt of the balance amount, as permitted by the Division Bench of this Court but the respondent No.1 most illegally, issued the impugned letter dated 08.12.2010, whereby and whereunder, the bank respondent communicated its decision regarding termination of the sale process of the hotel in question, to the petitioner and also forfeited an amount of Rs. 10,00,000/- (Rupees ten lakh) only paid by the petitioner, towards purported loss suffered by the bank respondent. Hence, the writ petition. 8. The respondent bank, by filing a counter affidavit, though admitted the fact, inter alia, that the petitioner, through its letter dated 14.09.2010 (Annexure-4 to the writ petition), made an offer for purchasing the hotel Promila as had been taken over by the bank respondent on the strength of the provisions of the SARFASI Act, but denied the allegation, inter alia, that the respondent bank committed breach of terms and conditions of understanding between the petitioner and the respondent bank. In the counter, the bank respondent also raised the question of maintainability of the instant writ petition as the same contains several disputed facts. In the counter, the bank respondent also raised the question of maintainability of the instant writ petition as the same contains several disputed facts. It is further contended that, though the petitioner has deposited three cheques amounting to Rs. 21,03,000/- (Rupees twenty one lakh three thousand) only with its letter dated 14th September, 2010, but out of Rupees Twenty One lakhs Three thousand, the bank respondent received only Rupees Ten lakhs i.e. the banker cheque on the Lakshmi Vilas Bank Ltd. and remaining amount of Rs. 11,03,000/- (Rupees eleven lakhs three thousand) only could not be received as the cheques issued by the petitioner were dishonoured. Further, case of the respondent is that, as the petitioner company failed to comply with the provisions of the SARFASI Act along with the rules made thereunder and the terms and conditions in sale Notice (Annexure-1 to the counter affidavit) and by not paying the 10% of the sale price, through dishonour of two cheques drawn by them, the question of written communication by the bank for confirmation does not arise at all. More so, the bank respondent also communicated regarding the fact relating to dishonour of cheques to the petitioner over telephone but there was no positive response from the petitioner and hence the bank has been compelled to forfeit the sum of Rs. 10,000/-(Rupees Ten Thousand) only for partial adjustment of the loss suffered by it and terminating the sale process. It is also stated by the bank respondent that the order, dated 08.10.2010, passed by the Division Bench of this Court in C. M. Appl. No. 74 of 2010 was communicated to the petitioner company but the said company has totally failed to respond and to keep their commitment, as agreed to, and specified by them in their letter dated 14.09.2010. 9. In Annexure-1 to the counter affidavit i.e. the sale notice, the terms and conditions for sale have been stated in details and it is also mentioned that the confirmation of sale is subject to final decision of writ appeal No. W. A. No. 11 of 2008 and writ appeal No. 34 of 2008 as per order of the Gauhati High Court dated 30.03.2010 and the bank will neither finalise the process nor confirm without permission from the Court. In Sale Notice (Annexure-1 to the counter affidavit), it is also stated that the offer without earnest money is rejected and the Authorized officer reserves the right to accept or reject any or all the offers or adjourn/postpone the sale without assigning any reason thereof. 10. Mr. Bhowmik, learned senior counsel while urging for the reliefs sought for would contend that the Division Bench of this Court vide its order dated 30.10.2010 permitted the bank to proceed with the sale process only with the petitioner subject to condition that the bank will deposit rupees three lakhs with the Registry of this Court. Therefore, the respondent bank is bound to comply the Court's order by way of completing the sale process with the petitioner. 11. Mr. Bhowmik further contended that the cheque was not dishonoured as stated by the respondent bank but the payment was stopped by the petitioner as the respondent bank did not communicate the Court's order dated 30.10.2010 to the petitioner whereby and whereunder the Court has permitted the bank respondent to complete the sale process with the petitioner. His further contention is that the petitioner is still ready to make the payment as agreed to by it as the offer of the petitioner was not on the basis of the sale notice, but from its own. He finally contended that the whole action of the respondent bank inter alia termination of the sale process and the forfeiture of the earnest money deposited by the petitioner is unfair, unreasonable and liable to be set aside, he contended. 12. While responding to the submission of Mr. Bhowmik, learned senior counsel, Mr. Datta, learned counsel appearing for the bank respondent referred to paragraph-6 of the writ petition wherein the petitioner stated inter alia that subsequent to the order dated 30.03.2010 the respondent issued a sale notice on 26.04.2010 for sale of the said hotel Promila and such sale process was published in the newspaper and the petitioner subsequently came to know that in the said notice the last date for receiving the sale 08.05.2010 and no offer was received by the respondent after the date fixed. 13. In this situation, without reference to the aforesaid sale notice, the petitioner by its letter dated 14.09.2010 offered to purchase the said property at a total consideration of Rs. 13. In this situation, without reference to the aforesaid sale notice, the petitioner by its letter dated 14.09.2010 offered to purchase the said property at a total consideration of Rs. 2,10,30,000/- (Rupees two crores ten lakhs thirty thousand) only along with the cheques amounting to Rs. 21,03,000/-(Rupees twenty one lakhs three thousand) only. Therefore, the petitioner was aware about the sale notice and the terms and conditions made therein by the respondent bank, he contended. He also contended that even if it is considered that the petitioner had not made its offer in response to the sale notice, then also the offer is incomplete one as the cheques enclosed with the offer have been dishonoured by the bank on whom the same was issued and as a result the bank respondent failed to receive ten per cent of the sale price with the offer. His further contention is that when the offer itself is an incomplete one, the petitioner-offeror has no right to ask the offeree-respondent bank to complete the sale process with it on the basis of an incomplete offer. He also urges that the Division Bench of this Court while passing the order dated 08.12.2010 permitted the bank respondent to proceed with the sale process with the petitioner subject to deposit of Rs. 3,00,000/ - (Rupees three lakhs) only and also the confirmation of the sale is subject to the outcome of writ appeal No. 11 of 2008 and writ appeal No. 34 of 2008 that does not mean that this Court directed the bank respondent to complete the sale process with the petitioner, even when the offer of the petitioner is incomplete. Rather, the bank was given opportunity to complete the sale process with the petitioner subject to certain conditions. Therefore, it is the bank authority who is to decide whether it will proceed with the sale process with the petitioner or not, petitioner has no right to ask the Bank respondent for completing the sale process when the offer itself is incomplete. 14. Therefore, it is the bank authority who is to decide whether it will proceed with the sale process with the petitioner or not, petitioner has no right to ask the Bank respondent for completing the sale process when the offer itself is incomplete. 14. In the instant case, as the petitioner's offer itself is a defective one and does not fulfil the terms of the sale notice issued by the bank respondent on 26.04.2010, the authorized officer of the bank is complete to terminate the sale and to accept or reject any or all of the offers without assigning any reason and accordingly, the authorized officer terminated the sale process giving reasons inter alia, that due to non-fulfillment of the terms and conditions of sale by the petitioner, the sale process has been terminated and forfeited the amount of Rupees 10 lakhs for adjustment of the loss suffered by the bank respondent. Therefore, it cannot be said that the order of termination of sale process is wholly arbitrary and illegal. Rather, the same is bona fide one. 15. This Court has given anxious thought to the submission of the learned counsel for the parties as well as perused the relevant documents as available. Upon consideration of the submission of the learned counsel for the parties and the records available, this Court is of the considered opinion that dispute between the parties are not relating to a fundamental right, rather a commercial dispute. A person is entitled to seek remedy of judicial review before a Court only when his fundamental and/or legal right is affected or the facts in issue admitted by the opposite parties. In Air India Ltd. Vs. Cochin International Airport Ltd. & Ors. (2000) 2 SCC 617 the Apex Court taking note of Tata Cellular Vs. Union of India (1994) 6 SCC 651 and Raunaq International Ltd. Vs. IVR Construction Ltd. & Ors. (1999) 1 SCC 492 as well as other decisions rendered by the Apex Court prior to Tata Cellular (supra) noted inter alia: In arriving at a commercial decision consideration, which are paramount are commercial considerations. The State can choose its own method to arrive at a decision It can fix its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. The State can choose its own method to arrive at a decision It can fix its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. (Emphasis supplied) 16. In the instant case also it is admittedly a commercial transaction and the petitioner made its offer as an offeror to the offeree bank respondents and the bank respondents in their own discretion decided not to accept as the same was defective. Therefore, according to this Court, the said decision of the offeree bank cannot be interfered with in a writ proceeding by exercising the power of judicial review of this Court, particularly when the decision is not faulted with fraud, corruption or bad faith. The aforesaid views of this Court also get support from the decision of Mercury Energy Ltd. Vs. Electricity Corporation of New Zealand Ltd. (1994) WLR 521-2 wherein Privy Counsel noted, inter alia, that it does not seem likely that a decision by a State Enterprise to enter into or determine a commercial contract to supply goods or services would ever be the subject of judicial review in the absence of fraud, corruption or bad faith. In Air India Ltd. (supra) the Apex Court also noted that in a matter of commercial transaction of complex nature the Court cannot substitute its decision for the decision of the party awarding contract. More so, this Court in Jai Balaji Industries Ltd. Vs. Union of India reported in 2011 (1) GLT 457 taking note of the decisions of the Apex Court as referred above, has formulated the power of judicial review in contractual matters. 17. In the instant case, it is the admitted position that neither the fundamental right nor the legal right of the petitioner is affected by any act of the bank respondent but only the commercial/contractual right of the petitioner is allegedly violated. More so, in the instant case, the agreement between the parties has also not been completed due to non-payment of 10% of the earnest money as required. More so, in the instant case, the agreement between the parties has also not been completed due to non-payment of 10% of the earnest money as required. In the instant case, the petitioner though made his offer for purchasing the hotel Promila as had been taken over by the bank respondent on the basis of its offer and the provisions of SARFASI Act by depositing an amount of Rs. 21,00,000/- (Twenty one lakhs) only through banker cheque and other cheques but fact remains, the offeree bank respondent admittedly did not receive rupees twenty one lakh as a whole, i.e. 10% of the sale price either for dishonour of cheque or for stopping payment by the petitioner whatsoever as stated by Mr. Bhowmik. Non-receipt of ten per cent of the sale price itself is a violation of condition as stated in the offer of the petitioner. 18. Not only that, when offer of the petitioner is found not acceptable, then that itself can be the ground for not accepting the offer made by the offeror petitioner and consequent thereto termination of sale process. More so, in the instant writ petition, the petitioner-offeror has stated that it has not received any communication from the offeree bank-respondent regarding the Court's order and also regarding the alleged dishonour of cheque for which it could not take the steps for finalizing the sale process. On the other hand, the offeree-bank respondent in their counter affidavit stated that they have communicated regarding the Court's order and the fact relating to the dishonour of cheque to the petitioner-offeror over telephone. Thus the facts of the writ petition are disputed in nature which normally cannot be decided by the writ Court. In the instant case, even there is no contract as the offer of the offeror-writ petitioner has not been accepted by the offeree, mere submission of an offer does not create any right to the offeror for proceeding with the sale process with it. 19. As facts involved in the writ proceeding are disputed in nature, same cannot be decided by this Court in this proceeding. 20. In that view of the above, this Court is of the further opinion that the writ petition is not maintainable, thus liable to be dismissed. Accordingly, it is ordered. 21. However, the dismissal of the writ petition would not be a bar for approaching the Civil Court, if so advised. 20. In that view of the above, this Court is of the further opinion that the writ petition is not maintainable, thus liable to be dismissed. Accordingly, it is ordered. 21. However, the dismissal of the writ petition would not be a bar for approaching the Civil Court, if so advised. 22. In the result, the writ petition is dismissed. No order as to costs.