2010 (3) TMI 1050 - HC - Income Tax

Summary

Issues involved: Appeal against the judgment declining interference with property sale under Securitisation Act.

Issue 1: Fairness of relegating appellant to alternate remedy

The High Court entertained the Writ Petition despite the availability of alternate remedy, as the sale was not conducted fairly. The Court held that it was improper to relegate the party to alternate remedy after keeping the matter pending for a significant period. The Court proceeded to consider the Writ Petition challenging the sale on merits due to the lack of consideration of pleadings by the learned single Judge.

Issue 2: Violation of Ext.P15 judgment in property sale

The appellant contended that the sale violated the Ext.P15 judgment, as the Bank failed to conduct the sale in a fair and proper manner. The Court noted that the sale was not conducted immediately after the granted time and was delayed significantly. The Bank did not renotify the sale or extend the time for receiving tenders, leading to a sale that did not reflect the market price. The Court emphasized the need for fair conduct of sales under the Securitisation Act to ensure maximum value for the property.

Issue 3: Sale based on sole tender and lack of transparency

The appellant argued against the sale being based on a sole tender just above the upset price fixed by the Bank. The Court criticized the lack of transparency in the sale process, noting that the appellant was not informed of the sale until after confirmation. The Court raised concerns about the Bank's actions, including registering the sale deed immediately after dismissing the Writ Petition, potentially denying the appellant the right to appeal. The Court found the sale price inadequate for a prime property, indicating possible lapses in the sale process.

Conclusion:

The Court allowed the Writ Appeal, setting aside the sale of the property to the fifth respondent. The appellant was directed to pay a lump sum amount of Rs. 2 crores to the fifth respondent for cancellation of the sale. The Court considered the amount remitted by the fifth respondent and additional charges paid by him in determining the compensation. The judgment provided detailed directions for the cancellation of the sale, transfer of the sale deed, and handling of excess amounts by the Bank, ensuring fair resolution of the property dispute.