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India: HC Asks Govt To Re-Examine Finlay Mill Bid
Publish Date : 19-Feb-2010
The Delhi HC has directed the government and NTC to re-examine the Rs 710-crore bid by Padmavati Buildtech & Farms to buy 10.5-acre of ailing state-owned Finlay Mill located in central Mumbai. A division bench comprising Justice and Justice said the Assets Sale Committee (ASC), formed by senior officials of the Ministry of Textiles and National Textiles Corporation, did not fix any reserve price and examine the bid by PBF on set parameters. The bench said as per the records, the government had evaluated the land and valued it at Rs 710 crore, which was matched by PBF during the negotiations. The bid would, thus, be re-examined by ASC and the due process followed as envisaged under the scheme of BIFR, the court said. The court’s order came over a petition filed by PBF, which had challenged a direction of the textiles ministry that had asked ASC to scrap the bid.
The bench said even the ASC had, in one of its meetings, compared rates offered by PBF with the price at which five other NTC properties were sold in Dadar locality of Mumbai between January to June 2005 and found that its quote was higher than the four properties. Finlay Mill, which was nationalised in 1983, is now under Board of Industrial and Financial Reconstruction after it stopped its manufacturing activity in 2006 following huge losses.
Later, BIFR formulated a scheme to revive it by selling the freehold land and invited a tender in December 2008 with a reserve price of Rs 1,065 crore. However it received the highest bid of Rs 405 crore only and re-bidded by putting a lower reserve price of Rs 7,10 crore. However, it again failed due to some bogus bids by land mafias and a third tender was floated in July 2009 and PBF submitted the highest bid of Rs 657 crore. Later, a dispute arose between PBF and the government after NTC contended that there was an undisclosed reserve price of Rs 710 crore. Following it, NTC and PBF entered into negotiations and latter decided to match the reserve price of Rs 710 crore. On it, the ASC and NTC sought opinion from the Ministry of Textiles over PBF’s revised bid, which in turn directed them to scrap the entire bidding process. Following it, Padmavati Buildtech & Farms approached the court challenging the decision of the government.
