TMI Blog1996 (6) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No. 1 on March 21, 1981. In August 1981 the unit of respondent No. 1 commenced production but from its very inception it continued to incur losses. In order to make the unit viable the appellant, on December 14, 1981, re- scheduled the payment of the loan. A further sum of ₹ 1.65 lakhs was sanctioned in March 1984 for the purpose of purchasing a Diesel Generating Set. On October 10, 1986 the appellant extended rehabilitation assistance under the RSR Scheme of IDBI and treating the unit as a sick unit sanctioned a further amount of ₹ 3.93 lakhs. Inspite of these facilities respondent No. 1 continued to make default in payment of instalments for repayment of the loan. On October 23, 1990 the appellant took over the posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant and machinery only. A joint meeting of the offerers was held on September 28, 1992. Respondent No. 1 was also invited. After considering the said offers, a tentative decision was taken to accept the offers submitted by M/s Prime Inputs (India) Ltd. and M/s Shakti Rubbers. Respondent No. 1 sent a letter dated October 21, 1992 seeking 15 days time to make payment and submit a proposal for revival of the unit. By letter dated November 12, 1992, further time was sought by respondent No. 1 till December 15, 1992. On January 4, 1995, an offer was submitted by respondent No. 2 to purchase the entire unit including land, building, plants, furnishings and fixture for ₹ 25 lakhs. The said proposal of respondent No. 2 as well as the offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng if bid offered was adequate, should always be intimated to the unit holder to enable him to file objection if any as he is vitally interested in getting the maximum price. (3) If tenders are invited then the highest price on which tender is to be accepted must be intimated to the unit holder. (4) (a) If unit holder is willing to offer the sale price, as the tenderer, then he should be offered same facility and unit should be transferred to him. And the arrears remaining thereafter should be rescheduled to be recovered in instalments with interest after the payment of last instalment fixed under the agreement entered into as a result of tendered amount. (b) If he brings third parties with higher offer it would be tested an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. and M/s Shakti Rubbers for the following reasons :- (a) The offers of M/s Prime Inputs (India) Ltd. and M/s Shakti Rubbers envisaged payment of dues of the Karnataka Electricity Board by the offerers, whereas the offer of respondent No. 2 proposed the said dues to be paid by the appellant; (b) There was shorter time for payment of consideration in the offers of M/s Prime Inputs (India) Ltd. and M/s Shakti Rubbers inasmuch as the entire consideration was payable within 4 years, whereas offer of respondent No. 2 was a conditional offer and payment was to be completed in 5 years after initial commencement of production; (c) In the case of M/s Prime Inputs (India) Ltd. and M/s Shakti Rubbers, down payment of 25% amounting to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been substantially complied with by the appellant. There was compliance with direction No. 2 inasmuch as before issuing the first advertisement for sale of the unit in March 1981 the unit had been evaluated at ₹ 28 lakhs. Keeping in view the various offers that have been received, it cannot be said that the said evaluation was improper. Directions Nos. 3 and 4 were also fulfilled inasmuch as respondent No. 1 was made aware of the various offers that had been received in response to the advertisements that were issued from time to time and respondent Mo. 1 was given sufficient opportunity to submit proposal for revival of the unit or to obtain higher offers. The only question is whether in accepting the offers of M/s Prime Inputs (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the said liability towards Canara Bank is secured by second charge on the land, plant and machinery that was being sold by the appellant. The said sale by the appellant was subject to the said charge. Every purchaser was bound to discharge the said liability of the Canara Bank and the offer of payment of ₹ 10 lakhs by respondent No. 2 to Canara Bank does not, therefore, enhance the value of the said offer. In the matter of a sale by the State Financial Corporation in exercise of the power conferred on it under Section 29 of the Act the scope of judicial review is confined to two situations, namely, (1) there is a statutory violation on the part of the State Financial Corporation, or (2) where the State Financial Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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