M/S. MOTORS AND INVESTMENTS LTD. versus THE NEW BANK OF INDIA AND ORS.

Citation: [1996] SUPP. 8 S.C.R. 141 · Decided: 29-10-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Disposed off
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Judgment (excerpt)

MIS. MOTORS AND INVESTMENTS LTD. 
A 
v. 
THE NEW BANK OF INDIA AND ORS. 
OCTOBER 29, 1996 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
B 
Court auction-Property sold in Court auction and confirmed by 
Court-Price fetched being to meagre and inadequate, High Court directed 
re-auction of the property-On appeal held, no interference called for -
Compensation to the appellant who has deposited the money consequent 
on the Court (J!uction-Ifthe amount is kept in any interest earning security, C 
the princif!9lamount together with interest to be refunded to the appellant-
Otherwise the appellant is entitled to interest at 18% per annum on the 
amount from the date of deposit till the date of repayment to the appellant-
Sale to be conducted keeping in view the interest liability. 
D 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14818 of 
1996. 
From the Judgment and Order dated 24.10.90 of the Madras High 
Court in O.S.A. No. 148 of 1982. 
A.K. Ganguli and V. Balachandran for the Appellant. 
A.T.M. Sampath, Parmanand Gaur and M.A. Chinnasamy for the 
Respondents. 
The following Order of the Court was delivered : 
lmpleadment ordered. 
Leave granted. 
This appeal by special leave arises from the judgment and decree of 
the Division Bench of the Madras High Court made on October 24, 1990 
in OSA No.148/82. The first respondent-Bank laid the suit for the recovery 
of mortgage amount by sale of 44 acres of land out of 80 acres belonging 
E 
F 
G 
to respondents 2, 3 and 7 in this appeal. Pending suit, respondents 2 and 3 H 
141 
142 
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R. 
A were adjudged as insolvents in J.P. No. 15/1978. In consequence, their 
right, title and interest held in the land stood vested in the official assignee, 
the 4th respondent in this Court. In insolvency proceedings, the High 
Court by order dated July 18, 1979 directed the official assignee to sell 
their interest in 44 acres of land by public auCtion. Since no one was 
coming forward to purchase the land in the auction, the appellant had 
B offered Rs. 67,500 and by order of the Court dated July 26, 1982 the 
Court accepted the appellant's offer of Rs. 77,500. By proceedings dated 
August 18, 1982 the learned Single Judge confirmed the sale. Feeling 
aggrieved, on appeal, the 7th respondent, in this Court respondent No. 9, 
had offered a sum of Rs. 16,28,000 and respondent No. 8 had offered a 
sum of Rs. 1,50,000 which was later raised to Rs. 2,50,000 respectively. 
C Treating it as offer, the Division Bench directed the 9th respondent to 
deposit I 00/o of the upset price but he did not deposit the· same; the official 
assignee was also asked to file a report before the Division Bench on the 
value of the land prevailing in the neighbourhood. The official assignee 
has reported that the price of lands in the neighbourhood varies between 
Rs. 4,000/- and Rs. 5,000/- per acre and the lands in question would fetch 
D as on December I 0, 1990 a sum of Rs. 3,35,000 which was worked out at 
the rate of Rs. 7,600 per acre. The High Court has set aside the sale and 
directed reauction of the land, fixing the upset price offered by the 8th 
respondent and directed the sale in open auction accordingly. 
Pending proceedings in this Court, 7th respondent had also offered 
E to deposit a sum of Rs. 20,00,000 and as per the direction of this Court the 
order was revoked. When the appeal was dismissed by a short order, on 
being mentioned by the learned counsel for the respondents to hear the 
matter on merits, order passed on July 24, 1995 recalling the order dated 
July 17, 1995 and setting out the matter for disposal. Thus, this appeal by 
F special leave is being heard. 
Shri Ganguli, learned senior counsel for the appellant, contended 
that while the appellant had offered the consolidated sum of Rs. 67,500 
since no one was coming forward to bid at higher amount, the appellant 
offered the highest bid of Rs. 77,500. The learned single Judge, in view of 
G the fact that the sale was postponed on more than one occasion, considered 
it appropriate to confirm the sale. The Division Bench, having noticed 
that respondent No. 9 had failed to deposit I 0% of his offer, was not 
justified in setting aside the sale and directing resale of the property. Even 
in this Court, the respondents have not complied with the offer of depositing 
the amount within the time and it indicates that the respondents are only 
H intending to prolong the sale but they were not sincere to
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