Bharat Commerce Industries Ltd. and Others vs Appellate Authority for Industrial and Financial Reconstruction and Others

Jasbir Singh, J.—Respondent No. 4 M/s. Bharat Commerce Industries Ltd. (in short ""BCI"") is a sick company. Dispute herein is regarding

sale of its property, i.e., Block No. IV situated in Rajpura, sale of which was confirmed in favour of Respondents Nos. 5 to 7 on May 30, 2005.

The Petitioners represent the employees of Respondent No. 4. It is their case that they are residing in BCI Colony, which is situated in the

property, in dispute, for a very long period running between 6 and 35 years (detail is given in paragraph No. 2 of this writ petition).

As per evidence on record BCI was declared a sick company by Respondent No. 2 (""the BIFR"") on May 16, 2000, u/s 15 of the Sick

Industrial Companies (Special Provisions) Act, 1985 (in short ""the Act""). Respondent No. 3 (IDBI) was appointed as an operating agency u/s

17(3) of the Act, however, despite efforts, Respondent No. 4 could not be rehabilitated. Vide order dated January 22, 2004, the BIFR appointed

the IDBI as its selling agency u/s 20(4) of the Act and permitted it to sell assets of the company, as per directions given by the BIFR. It was

directed that the sale be conducted after advertisement and in a transparent manner under immediate supervision of the Assets Sale Committee

(ASC). The sale proceeds were to be remitted by IDBI to the official liquidator of the concerned High Court for distribution, as per provisions of

Section 529A of the Companies Act, 1956. The concluding portion of the order dated January 22, 2004, reads thus:

IDBI is permitted u/s 20(4) of the SICA to take up sale of assets of the company including the unsold assets of NGU as the selling agency of

the BIFR. For this purpose, IDBI will issue fresh advertisements, after getting it approved by the BIFR u/s 24 of the SICA. The Bench further

directs that such sale of assets shall be carried out in a transparent manner through open advertisements and under the immediate supervision of an

Assets Sale Committee (ASC), comprising of representative each of IDBI as well as all concerned secured creditors and any sale of land is

involved. The next proceeds of the sale of company''s assets after deduction of the expenditure incurred by the selling agency (SA) on

advertisement charges, security charges, power charges, insurance charges and other miscellaneous expenses and any incidental expenses of sale

incurred would be remitted by the IDBI, to the official liquidator of the concerned High Court for distribution according to the provisions of

Section 529A and other provisions of the Companies Act, 1956 (the insurance charges may be renewed for a period not exceeding six months).

The guidelines to be followed by ASC for the sale of company''s assets are annexed to this order.

(emphasis supplied)

Relevant guidelines, to be observed by ASC, for sale of the property, in question, read as under:

(d) The sale of assets should be effected by way of public sale through sealed tenders, after adequate notice is given to the public through

advertisements in three leading newspapers/trade journals one of the newspapers being in English and the other in the regional language of the

locality where the assets are located 45 days time will be allowed to the bidders to inspect the assets and submit their offers. The cost of the

advertisements shall be charged to the company and recovered from it...

(g) The bidder should deposit by means of a bank draft earnest money equivalent to 2 per cent, of the notified reserve price, in respect of each

assets package along with the bid. Bids not accompanied by the earnest money deposit shall be rejected. Earnest money deposit shall be forfeited

if the party whose offer/bid is finally accepted defaults in making the balance payment in terms of the conditions of sale and completing other sales

formalities within the due date. If however, the sale is completed within the specified time limit, the earnest money deposit shall be adjusted

towards the final sale price. The earnest money deposit will not, however, carry any interest.

(h) Where a bid has been finally accepted the purchaser shall be required to pay the balance of the purchase consideration in two instalments of 50

per cent, and 48 per cent, of the total selling price, payable, respectively, before the end of 45 days and 90 days from the date on which intimation

regarding the final acceptance of the bid is dispatched to him by registered post (acknowledgment due)/special post at his notified address.

(i) The successful purchaser shall within 15 days of the receipt of intimation regarding the acceptance of his bid, furnish a bank guarantee, valid for

one year, as may be considered satisfactory by the OA/ MA, to secure full and timely payment of consideration for the assets purchased...

(k) The possession of the assets purchased and the title thereof shall be transferred to the purchaser only on receipt of full payment of the purchase

consideration along with interest at 15 per cent, per annum in case of delayed payments, if any, which may be accepted with the prior approval of

the Board.

(l) The extension of time to be granted by the Board in terms of sub-paragraph (k) above will not exceed 90 days each from the due date(s) of the

respective instalment(s) and shall be subject to prior extension, if necessary, of the period of validity of the bank guarantee for the unpaid amount,

besides payment of interest at 15 per cent, per annum for the extended period ...

(n) The ASC will open the bids/offers on the appointed date, time and place in the presence of its members, bidders, the BIFR special director (if

any), and the representative of the company (if any available). It would examine the offer(s) and select the highest/best acceptable offer(s) in each

category, specifying the reasons therefore, and draw up formal proceedings in this regard. If the decision is by the consensus of all the members

present and only the highest bid(s) above the respective reserve price(s) fixed is/are proposed to be accepted, the ASC would be free to finalise

the same and keep the funds, which are received in deposit in the name of the company for being eventually dealt with in accordance with the

directions of the Board.

(emphasis supplied)

Pursuant to the above said order passed the IDBI carried out an advertisement in various newspapers on May 24, 2004, for sale of assets of

the company. In the advertisement (annexure P3), it was specifically mentioned that the property is being sold under orders passed by the BIFR on

January 22, 2004. The property was advertised to be sold on ""as is where is"" and ""as is what is"" basis. The property situated at Rajpura was

bifurcated into separate blocks. (The present dispute is regarding the property falling in Block IV). Interested parties were to submit their bids so

as to reach the Chief General Manager of IDBI at Mumbai within 30 days from the date of advertisement along with earnest money. The following

conditions were specifically incorporated in the advertisement:

The offers will be evaluated by the Assets Sale Committee, constituted by the BIFR. The parties are free to have inspection of the mill and other

premises on any working day and can contact Shri P. M. Nair on the above address:

(f) The selling agency reserves the right to accept or reject any offer without assigning any reason therefore.

(emphasis supplied)

It is apparent from the conditions, mentioned above, that sale was subject to evaluation, to be made by the ASC and the selling agency reserved

the right to accept or reject any offer without assigning any reason. It is also clear that as per the order of the BIFR, the sale was according to the

guidelines extracted above.

In response to the advertisement, mentioned above, Respondents Nos. 5 to 7 made their offer on June 22, 2004 (annexure P4) to purchase the

property, falling in Block IV, for an amount of Rs. 2 crores and 84 lakhs. They also attached a demand draft of Rs. 6 lakhs in favour of IDBI, with

their offer, towards earnest money. It was further undertaken by them that they shall make full payment within six months from the date of

confirmation of sale in their favour. It is the case of the Petitioners that offer made was not in consonance with the terms and conditions, which

were fixed by the BIFR for sale of the property, in dispute, vide order dated January 22, 2004. It is further stated in this writ petition that a large

number of employees of BCI were residing in the staff colony, falling in Block IV of the property under sale. The operation of BCI came to an end

in October 2001, the company went bankrupt, on account of which, various dues of its employees in the shape of gratuity, compensation, leave

and other statutory benefits remained unpaid. Amount of those benefits run into crores of rupees. Vide their application dated August 14, 2004

(annexure P5), Petitioner No. 1 made an offer to purchase the property for an amount of Rs. 3 crores and it was prayed that offer made by

Respondents Nos. 5 to 7 be not accepted.

As per record, the ASC accepted the bid of Respondents Nos. 5 to 7 on August 12, 2004, subject to the conditions prescribed by the BIFR.

It is also on record that in the meantime, Respondent No. 8 also, vide letter dated August 13, 2004, made an offer to purchase the property for an

amount of Rs. 3 crores 15 lakhs.

It is an admitted fact that Respondents Nos. 5 to 7 were not present on the date when their bid was opened though they were called by the

ASC for that purpose.

The ASC, after accepting the bid of Respondents Nos. 5 to 7, put the matter before the BIFR for approval. Vide letter dated November 24,

2004, the BIFR intimated the IDBI that as Respondents Nos. 5 to 7 are not willing to adhere to the ASC guidelines, their proposal was not

accepted. It was further observed that the IDBI would leave the sale of the remaining unsold assets at Rajpura, to the official liquidator of the

concerned High Court.

It is necessary to mention here that in the meantime, the BIFR sent a recommendation u/s 20(1) of the Act on October 5, 2004,

recommending for winding up of Respondent No. 4 to the High Court of Madhya Pradesh and the request was registered as Company Petition

No. 2 of 2004, in which, notice was issued to Respondent No. 4 for its winding up. That petition, as per information supplied, is still pending.

Against the order dated November 24, 2004, Respondents Nos. 5 to 7 went up in appeal, which was accepted by Respondent No. 1, the

Appellate Authority for Industrial and Financial Reconstruction (in short, ""the AAIFR""), the order passed by the BIFR on November 24, 2004,

was set aside and directions were issued to confirm sale of the property, in dispute, in favour of Respondents Nos. 5 to 7. Hence, this writ petition

which challenges the appellate order.

It is necessary to mention here that Respondent No. 8 has also laid challenge to the order passed by the AAIFR, mentioned above, in the

Delhi High Court and under orders passed by this Court and also the Delhi High Court, the Petitioners and Respondent No. 8 had deposited with

the registry of the respective High Courts an amount of Rs. 3.15 crores each.

Counsel for the Petitioners has vehemently contended that the Petitioners are employees of the company, which is under liquidation. Amount

worth crores due to them, towards their legal dues remained unpaid. They are poor persons and they are living in staff colony quarters for a period

ranging between 6 and 35 years. In equity and also in law, they are entitled to get the property, in dispute. He further argued that the sale

conducted by the IDBI was contrary to the mandatory guidelines issued by the BIFR vide order dated January 22, 2004. The offer made by

Respondents Nos. 5 to 7 was not as per guidelines, mentioned above and further for non-payment of sale consideration in time, Respondents Nos.

5 to 7 have disentitled themselves to get the property, in dispute. The guidelines for sale of the property, framed by the BIFR had become final.

The AAIFR was not competent to change those guidelines/conditions for sale and order confirmation of sale in favour of Respondents Nos. 5 to 7.

He prayed that the writ petition be allowed, order passed by the AAIFR dated April 1, 2005 (annexure P9) be set aside and that of the BIFR

passed on November 24, 2004 (annexure P7) be restored.

The above plea has been vehemently opposed by counsel appearing for Respondents Nos. 5 to 7, primarily on the ground that a confirmed

sale cannot be set aside on an offer made by a party, who did not participate in the bid, as per terms and conditions of the advertisement. It was

stated that in response to the advertisement dated May 24, 2004, that the Petitioners did not make any offer to purchase the property, in question.

Respondents Nos. 5 to 7 were the sole bidders and their bid was accepted on August 12, 2004, whereas offer to purchase the property was

made by the Petitioners on August 14, 2004, that too without payment of earnest money. Counsel further argued that there was no necessity to

furnish bank guarantee because Respondents Nos. 5 to 7 were ready to make the entire payment within a period of six months, which, in fact, was

made thereafter. He further argued that the stipulation regarding furnishing of bank guarantee was not added in the advertisement, as such, the

same cannot be enforced against them. To support his contention, counsel has placed reliance upon a judgment of the hon''ble Supreme Court in

Valji Khimji and Company Vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others, . He prayed that the writ petition, having

no substance, be dismissed.

Counsel for Respondent No. 3 (IDBI) has stated about facts of the case and the payments made by Respondents Nos. 5 to 7 against the

property, in dispute and further stated that after passing of the impugned order, sale was confirmed in favour of Respondents Nos. 5 to 7 on May

30, 2005 and thereafter, sale proceeds were remitted to the official liquidator of the Madhya Pradesh High Court at Indore on January 24, 2006.

Counsel for the State Bank of Patiala, a secured creditor, has also put forward his case at the time of arguments. He substantially supported

the case of the Petitioners.

Counsel for Respondent No. 8 also raised objections regarding the order passed by the AAIFR, in changing terms and conditions set down

for sale of the property by the BIFR.

After hearing counsel for the parties, we are of the opinion that this writ petition deserves to be allowed.

It is apparent from the records and not disputed before us that vide order dated January 22, 2004, the property, in dispute, was ordered to be

sold by the BIFR. The ASC was constituted, consisting of a representative each of IDBI and of the concerned secured creditors. Terms and

conditions were set down for sale of the property, wherein, it was provided that the property be sold through public auction after advertisement in

newspapers and 45 days'' time will be allowed to the prospective bidders to inspect the assets and then submit their offers. Provision regarding

payment of earnest money was also made and it was further provided that the sale amount shall be paid in two instalments of 50 per cent, and 48

per cent, within 45 days and 90 days from the date on which intimation regarding final acceptance of bid may have been dispatched to the

successful bidder. It was specifically provided that successful purchaser, within 15 days of the receipt of intimation regarding acceptance of the bid,

shall furnish a bank guarantee, valid for one year, to secure full and timely payment of the sale proceeds. It was also stipulated that possession of

the assets purchased shall be delivered only on receipt of full payment of the purchase price. There was also a provision for extension of time for

payment. It was specifically provided that the ASC will open the bid/offer, on the appointed date, time and place in the presence of its members,

bidders, the BIFR Special Director (if any) and representative of the company (if any available).

It is apparent from the records that most of the conditions stipulated by the BIFR, as mentioned above, were not complied with by the ASC

when accepting the offer made by Respondents Nos. 5 to 7. In its statement, Respondent No. 3 IDBI has categorically stated that the bid offered

by Respondents Nos. 5 to 7 was accepted by the ASC in its meeting on August 5, 2004, for an amount of Rs. 2 crores 84 lakhs subject to the

Respondents agreeing to the terms and conditions prescribed by the ASC and the BIFR. It is further specifically admitted that Respondents Nos. 5

to 7 were not present on the date of opening of the bid though asked to do so vide letter dated July 29, 2004 (annexure R1). Vide letter dated

August 12, 2004, acceptance of their bid was intimated to Respondents Nos. 5 to 7. It was further intimated as under:

The above sale is on the terms and conditions of the Asset Sale Committee (ASC) advised to all the bidders by the ASC on August 5, 2004, for

which you may be required to execute a tripartite memorandum of understanding with IDBI. Selling agency and BCIL, the draft of which would be

sent to you shortly.

Instead of complying with the terms and conditions imposed by the ASC and the BIFR, Respondents Nos. 5 to 7 started dictating terms,

which fact is apparent from their letter dated September 24, 2004, wherein they have stated that it is not possible for them to comply with the

condition of furnishing bank guarantee for a period of one year. It was further mentioned by them that they are ready to deposit the entire amount

within six months. It is also on record that neither the bank guarantee, as stipulated, was furnished within 15 days from the date of intimation, nor

the sale proceeds were deposited in two instalments within 90 days. As per admitted position on record, amount was deposited by Respondents

Nos. 5 to 7 as under:

Amount Draft # & Date

(Rs.) Bank

6,00,000 222089, SBI18-6-

2004

35,00,000 286397, 03-6-

SBOP 2005

42,00,000 079024, SBI03-6-

2005

65,00,000 079025, SBI03-6-

2005

43,00,000 079026, SBI07-6-

2005

93,00,000 079027, SBI07-6-

2005

Above said payment schedule clearly indicates that there was total noncompliance with the terms and conditions set down for sale of the

property. By the letter dated September 30, 2004, written by Respondent No. 3 to Respondent No. 2 (BIFR) regarding status of compliance with

the terms and conditions of the ASC and the BIFR by the successful bidders, it was intimated as under:

B. For Block IV-Land and Staff Colony thereon Despite verbal assurance(s) given on September 23, 2004, M/s. Rajeev Kumar and Ors. (RK

and O) are yet to:

(a) Furnish their legal and financial credentials sought vide IDBI''s (SA) letter dated September 16, 2004, due to R K and Other''s absence on the

bid opening date.

(b) Provide documentary proof to the effect that, the purchase consideration being paid is above the circle price as stipulated by the concerned

State Government authorities.

(c) Furnish bank guarantee (so as to secure full and timely payment of consideration of the assets purchased) for the unpaid amount of Rs. 278

lakhs valid for a period of one year on or before August 27, 2004, in accordance with Clause (i) of the ASC guidelines stipulated by the BIFR in

its order dated January 22, 2004.

(d) Make payment of first instalment of Rs. 142 lakhs comprising 50 per cent, of the purchase consideration of Rs. 284 lakhs on or before the due

date of September 26, 2004, stipulated by SA in accordance with Clause (h) of the ASC guidelines stipulated by the BIFR in its order dated

January 22, 2004.

(e) It may be mentioned that, pending compliance by RK and others with the ASC terms and conditions two more offers were received in respect

of the ''Block IV-land with staff colony thereon'' from BCI Staff Colony Residents Welfare Association, Rajpura for Rs. 300 lakhs on August 16,

2004 and another from Punjab Builders on August 17, 2004, without indicating any amount of offer. Both these offers were received after the due

date of June 23, 2004. Since RK and Others did not call on us for proceeding further in the matter IDBI (SA) vide its letter dated September 16,

2004, referred these offers to the BIFR along with all the details pertaining to offer from RK and Others. IDBI (SA) on September 16, 2004,

informed RK and Others that their matter had been referred to the BIFR and in the interim request to furnish their legal and financial credentials. As

per RK and Other''s request on September 17, 2004, a copy each of IDBI (SA) letters dated August, 13 and September 16, 2004, were once

again sent to RK and Others. The terms and conditions have been explained in detail to RK and Others during their discussions with IDBI (SA) on

September 23, 2004. However, RK and Others vide their fax message dated September 24, 2004 (faxed, on September 29, 2004, at 13.45 hrs)

cited various reasons for their non-compliance with the terms and conditions of the sale, expressed reservations about furnishing their legal and

financial credentials and reiterated their condition to make payment only on actual transfer of the assets despite the fact that the advertisement

clearly stated that the sale is on ''as is where is'' and ''as is what is'' basis.

(emphasis supplied)

It may be noted that, the bid/offer for both ''SS'' and RK and Others were ab initio conditional. However both SS and RK and Others were

intimated the acceptance of their respective bids on the terms and conditions of ASC/BIFR which were advised to SS on August 5, 2004, by

ASC and communicated to RK and Others vide our letter dated August 13, 2004. Both SS and RK and others were again reminded of these

conditions vide IDBI (SA)''s letters dated September 21 and 17, 2004, respectively. Even though the due date(s) have elapsed both SS and RK

and others are yet to comply with the these terms and conditions as explained in ''4'' above.

Further prayer was made that the IDBI be permitted to refund earnest money deposited by Respondents Nos. 5 to 7 because they have failed

to comply with the terms and conditions, as mentioned above. In the alternative, it was suggested that permission may be granted to make an offer

for sale of the property to the Petitioners for an amount of Rs. 3 crores. However, that request was declined by the BIFR and matter regarding

sale of the property, was left to the official liquidator of the concerned High Court for necessary action.

The facts mentioned above, clearly indicate that from day one, offer made by Respondents Nos. 5 to 7 was not in consonance with the terms

and conditions set down by the BIFR for sale of the property. Perusal of correspondence between the parties further indicates that the terms and

conditions set down for sale of the property, as mentioned above, were known to Respondents Nos. 5 to 7. In the advertisement dated May 24,

2004, it was specifically mentioned that the property is being sold under orders passed by the BIFR on January 22, 2004. As per principle of

caveat emptor"", it was bounden duty of Respondents Nos. 5 to 7 to know about the terms and conditions set down in the order mentioned above

before making an offer for crores of rupees to purchase the property, in question. Not only this, in the advertisement notice dated May 2, 2004, it

was specifically mentioned that the offer made will be evaluated by the ASC constituted by the BIFR and further that the selling agency reserves

right to accept or reject the offer without assigning any reason therefor. This Court is of the opinion that the stipulation made was wide enough to

reject the technically defective offer made by Respondents Nos. 5 to 7. The State Bank of Patiala and other banks are the secured creditors. It is

the public money, which was invested in the company. Under these circumstances, it was the duty of the ASC to ensure strict compliance of the

terms and conditions, set down by the BIFR, for sale of the property. However, it was a sorry state of affairs, the ASC has failed to get

compliance of the terms and conditions and approved the bid made by Respondents Nos. 5 to 7 without complying with the guidelines. When

public funds are involved, selling agency is supposed to be very cautious and careful in accepting any bid.

The AAIFR, while allowing the appeal filed by Respondents Nos. 5 to 7, has erroneously interfered with the terms and conditions set down by

the BIFR for the sale of the property, which had become final. The concluding paragraph of the impugned order reads thus:

We have considered the issues raised in this appeal and examined the relevant records. The BIFR''s reasoning for rejection of the proposal

recommended in favour of the Appellant by ASC to confirm the sale of Rajpura unit, Block IV along with land staff colony on the ground that the

Appellant is not willing to accept the ASC guidelines is clearly not tenable. The only condition which the Appellant did not comply with and sought

waiver relating to the furnishing of a bank guarantee for Rs. 284 lakhs valid for one year with effect from August 4, 2004. This condition is clearly

unnecessary and redundant in view of the fact that the possession of the assets and the tile thereof were to be transferred to the Appellant only on

receipt of full payment of purchase consideration along with interest at 15 per cent, per annum in case of delayed payment. The Appellant has

already paid earnest money deposit of Rs. 6 lakhs and was willing to pay the balance purchase consideration of Rs. 278 lakhs in two instalments of

Rs. 136 lakhs and Rs. 142 lakhs on September 20, 2004 and October 11, 2004, respectively in accordance with the guidelines duly approved by

the Assets Sales Committee. In view of the aforesaid facts, we find that the impugned order of the BIFR refusing to accept the bid of the Appellant

in respect of Rajpura unit, Block IV along with land and staff colony was not justified. We, therefore, set aside the impugned order dated

November 24, 2005 and direct the BIFR to confirm the sale of Rajpura unit, Block IV, land and staff colony thereon in favour of the Appellant.

The modalities of payment will be in accordance with terms and conditions as approved by the Assets Sales Committee.

The AAIFR has gone wrong to say that Respondents Nos. 5 to 7 have failed to comply with only condition of furnishing of bank guarantee,

whereas, to the contrary, as has been discussed earlier, their offer was defective and there was also non-compliance of many terms and conditions,

which were set down for sale of the property, in question, by Respondent Nos. 5 to 7. Furthermore it was not open at the appellate stage for the

AAIFR to have waived a vital condition of bank guarantee which was never challenged. If Respondents Nos. 5 to 7 were not ready to furnish the

bank guarantee, they were supposed to make payment within the stipulated period, which they failed. Rather they started dictating terms, raising

frivolous objections, which this Court feels were not justified. The AAIFR has further gone wrong in holding that condition regarding furnishing of

bank guarantee was unnecessary. As per schedule for payment, the first instalment was to be paid within 45 days and the second within 90 days,

whereas, the bank guarantee was required to be furnished within 15 days. It is apparent that the bank guarantee was required to be furnished to

secure payment of the purchase price and it was not an unnecessary but in fact a vital condition, as has been wrongly held by the AAIFR. Though

there was not much difference in price offered by the Petitioners for purchase of the property, in question, however, in equity, the court is of the

opinion that they were the worst sufferers. If this sale is approved, they will be thrown out from the quarters, where they are residing for the period

ranging between 6 and 35 years. Money worth crores, towards their legal dues has not been paid to them. The company was declared sick about

a decade earlier and the Petitioners, who are poor employees of the company, are still roaming here and there to get compensation and other dues.

Under these circumstances, we feel that the AAIFR was not justified in not even calling them at the time of hearing of appeal filed by Respondents

Nos. 5 to 7.

It is also apparent from the records that the ASC gave only 30 days to make the bid, whereas, as per terms and conditions, bid was required

to be made after 45 days of the date of advertisement.

Reliance of counsel for Respondents Nos. 5 to 7 on the judgment of the hon''ble Supreme Court in Valji Khimji and Company Vs. Official

Liquidator of Hindustan Nitro Product (Gujarat) Ltd. and Others, , is of no help to them. In that case, the hon''ble Supreme Court specifically held

that technically there was no defect and fraud in conducting sale of property. However, in the present case, after advertisement only one bid was

received by the ASC for property, in question. As per averments made, the property was sold for a price, which was less than the Collector''s rate

fixed for the property, in question, at the relevant time. Besides above, as has been discussed earlier, there was total non-compliance with the

terms and conditions set down for sale of the property by the competent authority, i.e., the BIFR. ASC acted in an unjustified manner by ignoring

the specific terms for sale laid down by the BIFR. Without ensuring the compliance of terms and conditions, bid made by Respondents Nos. 5 to 7

was accepted. Respondents Nos. 5 to 7 when asked to comply with the terms and conditions set down for the sale of the property, they rather

started dictating terms and failed to furnish bank guarantee and also to make payment within the stipulated period. The AAIFR had no jurisdiction

to reverse the order of the BIFR by setting aside a mandatory term of the ASC guidelines for furnishing a bank guarantee.

In view of the facts mentioned above, we allow this writ petition, set aside the order passed by the AAIFR dated April 1, 2005 (annexure P9)

and restore the order dated November 24, 2004 (annexure P7) passed by the BIFR. Amount lying deposited with the registry of this Court, at the

instance of the Petitioners, be returned to them. IDBI, Respondent No. 3 is directed to communicate to the official liquidator to refund the amount

deposited by Respondents Nos. 5 to 7 towards purchase of the property, in question. Amount be refunded with an interest at 8 per cent, per

annum (simple) from the date of its deposit till the amount is refunded to Respondents Nos. 5 to 7. The property, thereafter, be sold, if need be, as

per provisions of law. No order as to costs.