SANKALP RECREATION PRIVATE LIMITED versus UNION OF INDIA & ORS.

Citation: [2019] 12 S.C.R. 661 · Decided: 19-09-2019 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Dismissed

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Judgment (excerpt)

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SANKALP RECREATION PRIVATE LIMITED
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 7438 of 2019)
SEPTEMBER 19, 2019
[R. F. NARIMAN AND SURYA KANT, JJ.]
Auction – A property was acquired by Union of India u/s.269
UD(1) of the Income Tax Act – Despite several attempts to sell
property, several auctions conducted qua the said property failed
– Appellant made offer to the Central Board of Direct Taxes to
purchase the said property for a sum of Rs.32.11 crores – However,
the offer was not accepted – A fresh valuation report of the property
was submitted on 04.09.2017 and a reserve price for property was
fixed at Rs.30 crores – Appellant made a bid of Rs.30.21 crores –
On 26.09.2017 respondent no.3 sent a report to respondent no.2,
in which it was stated that the offer made by the appellant was
less than the sum of Rs.32.11 crores, which was offered by it earlier
– Therefore, a fresh auction to be conducted – Pursuant thereto,
auction proceedings with a reserve price of Rs.30 crores were kept
in abeyance – Again a valuer was appointed, who valued by the
property at Rs.31.07 crores on 23.01.2018 – Earlier auction
process which yielded the sum of Rs.30.21 crores was cancelled –
Fresh auction was conducted – Aggrieved by the cancellation of
the auction process, appellant filed writ petition – In the fresh
auction, appellant did not participate and respondent no.4 was the
sole bidder, with the bid of Rs.31.10 crores – On the other hand,
High Court dismissed the writ petition filed by the appellant – On
appeal before the Supreme Court, respondent no.4 made an offer
to pay a sum of Rs.35 crores for the said property – Appellant
contended that cancellation of auction process was invalid in law
– Held: The reasons stated in the report dated 26.09.2017 cannot
be said to be arbitrary – Also, a letter dated 06.04.2018 from the
Government of India, Ministry of Finance to Chief Commissioner
of Income tax, which stated that the other properties of a similar
nature in the same area was sold for a considerably higher amount
was not arbitrary – Thus, there was no arbitrariness in the entire
   [2019] 12 S.C.R. 661
661
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SUPREME COURT REPORTS
[2019] 12 S.C.R.
auction process – It was in the public interest to see that the highest
possible price is fetched – Further, there is no reason to doubt the
valuation reports – Besides, appellant was given several
opportunities to bid in the fresh auction conducted, however, he
refrained from participating – This being the case, offer made by
the respondent no.4 of Rs.35 crores for the said property accepted
– Respondent no.4 to pay the said amount directly to the Union
treasury.
Dismissing the appeal, the Court
HELD: 1. In the present case, several auctions were
conducted from the year 1994, including an auction as recent
as 27.03.2017 which failed to elicit a response from any buyer.
Ultimately, the auction with the reserve price of Rs.30 crores,
on which the appellant bid was Rs.30.21 crores, was kept in
abeyance.  The reason that is available from the record is in a
Report dated 26.09.2017 in which it was pointed out that this
figure was considerably lower than the figure offered by the
appellant itself at Rs.32.11 crores and that, therefore, a fresh
auction be held. This Court cannot say that the aforesaid reason
can be said to be, in any manner, arbitrary.  After all, it was in
public interest to see that the highest possible price be fetched
for such properties.  Further, this Court has also seen how at
every stage valuation reports were submitted by reputed
Valuers, first from Mumbai, and then from Chennai, and has no
reason to doubt what has been stated to be the Fair Market
Value in any of these reports.  It may also be pointed out that
though the appellant was given several opportunities to bid in
the fresh auction conducted, ultimately, for reasons best known
to him, he chose to refrain from participating in the fresh auction
that was conducted. [Paras 13,14 and 15] [667-B-E]
2. Following various judgments of the Supreme Court,
suffice it to state that the reasons disclosed both in the Report
dated 26.09.2017 and the letter dated 06.04.2018 from the
Government of India, Ministry of Finance, to the Chief
Commissioner of Income Tax, make it clear that there is no
arbitrariness that is discernible in the entire auction process.
This being the case, this Court dismisses this appeal and hold
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respondent no.4 to the offer very fairly made befor

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