Holding

The non‑disclosure of a pending civil suit is not a material fact that bars a writ petition, and the sale of the hotel was invalid due to procedural irregularities and lack of adequate publicity.

Summary

The appellant, S.J.S. Business Enterprises Ltd., had obtained a loan from Bihar State Credit and Investment Corporation Ltd. (BICICO) for a hotel project but defaulted, prompting BICICO to invoke Section 29 of the State Financial Corporations Act, 1951 to sell the hotel. After a series of valuations, BICICO issued a second sale notice giving only three days – two of which were public holidays – for offers, and sold the property to Respondent No. 6 under questionable circumstances. The appellant filed a civil suit challenging the sale and, the next day, a writ petition under Article 226 of the Constitution seeking the same relief without disclosing the pending suit. The Patna High Court dismissed the writ petition for suppressing the fact of the suit, deeming it a material fact. The Supreme Court held that the filing of a suit is not a material fact whose suppression would affect the merits of a writ petition, and therefore the writ could not be barred. It also found the sale invalid due to inadequate publicity, insufficient time for bidders, and apparent abuse of power. The Court set aside the sale, ordered possession to be returned to BICICO and then to the appellant, and allowed the appeal.

Issues considered

The filing of a civil suit prior to a writ petition – whether its non‑disclosure constitutes suppression of a material fact disqualifying relief under Article 226.
Whether the sale of the hotel by BICICO under Section 29 of the State Financial Corporations Act, 1951 was valid in view of the notice period, publicity and procedural fairness requirements.
Whether the existence of an alternative remedy (civil suit) bars the exercise of writ jurisdiction.

Legislation cited

Constitution of Indias. Article 226
State Financial Corporations Act, 1951s. Section 29

Subjects

Article 226suppression of material factswrit petitionState Financial Corporations Actpublic auctionadequate noticealternative remedycivil suitprocedural fairnessbonafide exercise of power

Judgment

A MIS. S.J .S. BUSINESS ENTERPRISES (P) LTD.
v.
STATE OF BIHAR AND ORS.

MARCH 17, 2004

B [MRS. RUMA PAL AND P. VENKATARAMA REDD!, JJ.]

Constitution of India, 1950:

Article 226-Writ petition-Suppression of material facts-Effect on
C maintainability of-Petitioner filed a civil suit for certain reliefa-Thereafter,
petitioner filed a writ petition seeking same reliefs without disclosing the fact
offiling of the civil suit-High Court dislnissed the writ petition on the ground
of suppression of material facts-Correctness of-Held: As a general rule,
suppression ofa material fact disqualified a litigant from obtaining any relief-
D But the suppressed fact must be a material one which, had it not been
suppressed, would have had an effect on the merits of the case-Filing of a
suit was not such a material fact, the suppression of which would have affected
the final disposal of the writ petition on merits-Hence, High Court's order
set aside.

E Administrative law:

Auction sale-Principles to be folfowed-Held: Adequate publicity to
ensure maximum participation of bidders should be given unless the sale was
of such a nature which required immediate disposal of the property.

F The appellant was sanctioned a certain sum by the Bihar State Credit
and Investment Corporation Ltd. (BICICO) for financing the construction
of a hotel. The appellant committed default in re-payment of the loan and,
therefore, procel!dings were initiated under Section 29 of the State
Financial Corporations Act, 1951 for sale of the hotel. A sale notice was
G published offering the hotel for sale on "As is where is basis". Under this
notice offers were to be given within three days.

On the same day the sale notice was published, respondent No. 6
offered to purchase the hotel for a certain sum. The appellant and its two
Directors were asked by the BICICO to match the offer made by
H 56
..
)
S.J.S. BUSINESS ENTERPRISES (P) LTD. v. STATE 57
...
)'-
respondent No. 6, failing which the sale would be concluded in favour of A
respondent No. 6.

.. The appellant filed a civil suit challenging the aforesaid action of
BICICO. The next day a writ petition was filed by the appellant before
the High Court for the same reliefs as had been prayed for in the suit.
The High Court dismissed the writ petition on the ground that the B
appellant had materially suppressed the fact that it had filed a suit prior
to the institution of the writ proceedings. Hence the appeal.

Allowing the appeal, the Court

HELD: 1. As a general rule, suppression of a material fact by a c
litigant disqualifies such litigant from obtaining any relief. This rule has
been evolved out of the need of the Courts to deter a litigant from abusing
the process of Court by deceiving it. But the suppressed fact must be a
material one in the sense that had it not been suppressed it would have
had an effect on the merits of the case. It must be a matter which was
D
material for the consideration of the Court, whatever view the Court may
have taken. [61-H; 62-Al
'f State of Haryana v. The Karna/ Distillery Co. Ltd, AIR (1977) SC 781
and Welcome Hotel v. State of A.P., AIR (1983) SC 1014, relied on.
E
The King v. The General Commissioners for the purposes of the Income
Tax Act/or the District of Kensington, (1917) l KB 486, referred to.

2.1. The existence of an adequate or suitable alternative remedy
available to a litigant is merely a factor which a Court entertaining an
application under Article 226 will consider for exercising the discretion F
to issue a writ under Article 226. (62-E-F)
,).
A.N. Venkateswaran v. R.S. Wadhwani, AIR (1961) SC 1507, relied on.

2.2. But the existence of such alternative remedy does not impinge
upon the jurisdiction of the High Court to deal with the matter itself if it G
is in a position to do so on the basis of the affidavits filed. If, however, a
party has already availed of the alternative remedy while invoking the
jurisdiction under Article 226, it would not be appropriate for the Court
¥. to entertain the writ petition. This Rule is based on public policy but the
motivating factor is the existence of a parallel jurisdiction in another
Court. (62-F; 63-A] H
58 SUPREME COURT REPORTS [20041 3 S.C.R.
~

A C.B. Gosain Bhan v. State of Orissa, 119631 2 SCR 879, relied on.
...¥'

2.3. Therefore, the fact that a suit had already been filed by the
appellant was not such a fact the suppression of which could have affected
the final disposal of the writ petition on merits. •

B 3. The sale effected in favour of respondent No. 6 cannot be
sustained. It is axiomatic that the statutory powers vested in the State
Financial Corporation under the State Financial Corporations Act, 1951
must be exercised bonafide. The presumption. that public officials will
discharge their duties honestly and in accordance with the law may be
rebutted by establishing circumstances which reasonably probabalize the
c abuse of that power. In such an event it is for the concerned officer to
explain the circumstances which are set up against him. If there is no
credible explanation forthcoming the Court can assume that the impugned
action was improper. (64-A-B)

Mis. Pannalal Binjraj and Ors. v. Union of India, AIR (1957) SC 397,
D
Mahesh Chandra v. Regional Manager, UP. Financial Corpn., 11993[ 2 SCC
279 and Chairman and Managing Director, SIPCOT, Madras v. Contromix
Pvt. Ltd., [1995] 4 SCC 595, referred to. (63-D]

4. Adequate publicity to ensure maximum participation to bidders
E in turn requires that a fair and practical period of time must be given to
purchasers to effectively participate in the sale. Unless the subject-matter
of sale is of such a nature which requires immediate disposal, an
opportunity must be given to the possible purchaser who is required to
purchase the property on 'As is where is basis' to inspect it and to give a
considered offer with the necessary financial support to deposit the earnest
F money and pay the offered amount, if required. (64-F-G]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. I 650 of
2004.

From the Judgment and Order dated 12.5.2003 of the Patna High Court
G in LP.A. No. 385 of 2003.

R.F. Nariman, Saket Singh and Ms. Niranjana Singh for the Appellant.

M.N. Krishnamani, Ajit Kumar Sinha, Pankaj Bhagat, B.B. Singh and ;.,
S.B. Upadhyay for the Respondents.
H
S..IS. BUSINESS ENTERPRISES (P) LTD. v. STATE [RUMA PAI.. J.) 59

The Judgment of the Court was delivered by A
RUMA PAL, J. Leave granted.

The appellant had been sanctioned a sum of Rs. 70 lakhs by the Bihar
State Credit and Investment Corporation Ltd. (hereinafter referred to as
'BICICO') in April 1992 for financing the construction ofa hotel. According B
to the appellant, BICICO only disbursed a sum of Rs. 44.56 lakhs in instalments
as a result of which the appellant could not complete the project without a
huge cost overrun. From time to time upto 2001-2002, the appellant repaid
about Rs.14.23 lakh to BICICO. However, the outstanding amount, due from
the appellant according to BICICO as on March 2002, was Rs.191.3 lakhs C
including interest. Proceedings were therefore commenced by BICICO under
Section 29 of the State Financial Corporations Act, 1951 for sale of the hotel
which had been mortgaged by the appellant to BICICO by way of security
against the loan.

The hotel was valued on 3rd July 200 I by BICICO through its valuer. D
According to this valuation, the property was worth Rs. 2.16 crore. After this,
a publication was made on 31st January 2002 offering the hotel for sale on
an "As is where is basis". Offers were required to be made by 28th February
2002. The respondent No. 6 offered to purchase the hotel for Rs.41 lakhs.
The offer was rejected by BICICO because the bid was too low.
E
The property was again re-valued on 24th January 2002 by BICICO.
By what, according to BICICO, was only an "in-house assessment", the value
of the hotel was estimated at Rs. I .58 crores. But when a third valuation was
again made at the instance of BICICO in February 2002, the total value of
the property including of the building and land was only Rs.94.81 lakhs. On
26th March 2002, a second sale notice was published by BICICO in respect F
of the hotel on "As is where is basis". This notice has been impugned before
us. Under this notice offers were to be given by way of a sealed cover by
29th March 2002 i.e. within three days. Of these three days 28th March 2002
was 'Holi' and 29th March 2002 was 'Good Friday'.
G
It appears from the records that on the same day the second sale notice
was published, the respondent No. 6 made an offer to purchase the hotel for
Rs.95.50 lakhs and in fact paid Rs. 95.50 lakhs to BICICO. On 30th March
2002, which was a Saturday, the offer of the respondent No. 6 was negotiated
and the consideration was finalised at Rs. 1 crore. The difference between
Rs.94.50 lakhs and Rs. I crore had already been paid to BICICO by the H
J
\

60 SUPREME COURT REPORTS [2004] 3 S. C.R.

A respondent No. 6 on 7th March, 2002. Therefore by the 26th March, 2002,
before the last date for receiving offers was over and the tenders were opened,
the Respondent No. 6 had deposited the entire consideration of Rs. I Crore.
Nevertheless a letter accepting the respondent No. 6's offer was issued by
BI CI CO on 31st March 2002 (which was a Sunday) asking the respondent
No. 6 to pay the amount of Rs. I crore by 3 I st March 2002 failing which its
B offer would stand rejected. The respondent No. 6 apparently received the
letter on the same day from BICICO and also replied on that day stating that
the amount" of Rs. l crore had already been paid. After this, a letter was
written again on the same day by BICICO to the appellant and its two Directors
asking them to match the offer of respondent No. 6 within 10 days from the
c date of the issue of the letter, failing which the sale would be concluded in
favour of the respondent No. 6.

On 4th April 2002, a suit was filed by the appellant before the Court
of the Sub-Judge, Patna, inter-alia, challenging the action of BICICO. An
application for interim relief was made to restrain BI CI CO from selling the
D hotel. The prayer for interim injunction was refused by the Sub Judge on 8th
April 2002 and notice was directed to be issued to BICICO. The next day,
a writ petition was filed by the appellant for the same reliefs as had been r-
..J("
prayed for in the suit. An interim order was passed by the learned Single
Judge on 9th April 2002 after hearing counsel for the appellant as well as for
BICICO by which a schedule of repayment by instalments was prescribed.
E
Subject to payment of the first instalment of Rs. 10 lakhs possession of the
hotel was to be handed over by BI CI CO to the appellant. An undertaking was !ill
also given by one of the Directors of the appellant to the Court to abide by
the schedule so fixed. The appellant paid a sum of Rs. I 0 bkhs in tenns of
the Court's order to BICICO but the possession of the hotel was not handed
F back to the appellant.

It may be mentioned that duriqg this period, BICICO announced a
settlement policy under which concerns which had taken a loan less than I 0
years earlier could settle their dues by paying double the original principal
amount lent by the BICICO to such defaulters. The appellant applied for
G settlement of its outstanding dues. However, the prayer of the appellant for
a one time settlement was rejected by BICICO under the settlement policy.

When the writ petition came up for disposal, the learned Single Judge
dismissed it holding that as the appellant had suppressed the fact that it had :>.
filed a suit prior to the initiation of writ proceedings its conduct verged on
H
(
\
"'{
/
S..l.S. BUSINESS ENTERPRISES (P) LTD. v. STATE [RUMA PAL . .l.] 61

fraud and that the appellant had, disentitled itself from any relief in the A
"- extraordinary prerogative writ jurisdiction. It was also held that the Bl Cl CO
had acted bonafide in taking action under Section 29 and selling the hotel.
While dismissing the writ petition, the learned Single Judge directed Bl Cl CO
to consider the appellant's application for one time settlem'ent in accordance
with law. BJCICO was directed to hand over the possession of the hotel to
respondent No. 6 and the appellant was directed to pay Rs.10,000 by way of B
costs to the respondent No. 6.
-/
The Division Bench dismissed the appeal preferred by the appellant
't- after rejecting the explanation given by the appellant that the two proceedings
had been initiated independently by the two Directors of the appellant each.
without the other's knowledge. The Division Bench held that the Court would
c
not interfere with the Single Judge's order because of the material suppression
of facts by the appellant.

When the special leave petition was initially entertained by this Court,
we directed the issuance of notice subject to the appellant's depositing a sum D
of Rs. I crore by way of bank draft/draft with the Registry of this Court. We
also recorded that the appellant was willing to recompense the respondent
No. 6 to the extent of any loss incurred by way of interest on the amount paid
by it. The demand draft of Rs. I crore was deposited with the Registry of this
Court by the appellant and the amount has since been invested in a nationalised
bank in a short tenn fixed deposit. E

Affidavits have been filed by BICICO and the respondent No. 6 in
which they have claimed that possession of the hotel was handed over by
BICICO to the respondent No. 6 on 27th May 2003. However, it is not clear
whether any resolution of the Board or any other formal agreement or
F
conveyance deed in respect of the hotel has been executed by BICICO in
favour of the respondent No. 6 till today.
~

The principal basis on which the Single Judge and the only ground on
which the Division Bench of the High Court refused relief to the appellant

' was because they found that the appellant was guilty of suppression of a G
material fact viz., the filing of the suit prior to approaching the Court under
Article 226.

As a general rule, suppression of a material fact by a litigant disqualifies
such litigant from obtaining any relief. This rule has been evolved out of the
need of the Courts to deter a litigant from abusing the process of Court by H
!
\
62 SUPREME COURT REPORTS [2004] 3 S.C.R.

A deceiving it. But the suppressed fact must be a material one in the sense that
had it not been suppressed it would have had an effect on the merits of the
case. It must be a matter which was material for the consideration of the
Court, whatever view the Court may have taken 1• Thus when the liability to
Income Tax was questioned by an applicant on the ground of her non-
residence, 'the fact that she had purchased and was maintaining a house in the
B country was held to be a material fact the suppression of which disentitled
her from the relief claimed. 2 Again when in earlier proceedings before this
Court, the appellant had undertaken that it would not carry on the manufacture
of liquor at its distillery and the proceedings before this Court were concluded
on that basis, a subsequent writ petition for renewal of the licence to
C manufacture liquor at the same distillery before the High Court was held to
have been initiated for oblique and ulterior purposes and the interim order
passed by the High Court in such subsequent application was set aside by this
Court.' Similarly, a challenge to an order fixing the price was rejected because
the petitioners had suppressed the fact that an agreement had been entered
into between the petitioners and the Government relating to the fixation of
D price and that the impugned order had been replaced by another order .4
Assuming that the explanation given by the appellant that the suit had
been filed by one of the Directors of the Company without the knowledge of
the Director who almost simultaneously approached the High Court under
E Article 226 is unbelievable, the question still remains whether the filing of
the suit can be said to be a fact material to the disposal of the writ petition
on merits. We"think not. The existence of an adequate or suitable alternative
remedy available to a litigant is merely a factor which a Court entertaining
an application under Article 226 will consider for exercising the discretion to
issue a writ under Article 226 5• But the existence of such remedy does not
F impinge upon the jurisdiction of the High Court to deal with the matter itself
if it is in a position to do so on the basis of the affidavits filed. If however
a party has already availed of the alternative remedy while invoking the
jurisdiction under Article 226, it would not be appropriate for the Court to
entertain the writ petition. The Rule is based on public policy but the motivating

G I. The King v. TheGenerq/ Commissioners for the purposes of the Income Tax Act for the
f
DistriC/ of Kensington, ( 1917) I KB 486.
2. Ibid.
3. State of Haryana v. The Karna/ Distillery Co. ltd., AIR (1977) SC 781.
4. Welcome Hotel v. State of A.P, AIR (1983) SC 1014.
H 5. A.N. Venkateswaran v. R.S. Wadhwani, AIR (1961) SC 1507.

r-
1-
S.J.S. BUSINESS ENTERPRISES (P) LTD. v. STATE [RUMA PAL. .1] 63

factor is the existence of a parallel jurisdiction in another Court. But this A
Court has also held in CB. Gosain Bhan v. State of Orissa 14 STC 766=
[ 1963] 2 SCR 879 that even when an alternative remedy has been availed of
by a party but not pursued that the party could prosecute proceedings under
Article 226 for the same relief. This Court has also held that that when a
party has already moved the High Court under Article 226 and failed to B
obtain relief and then moved an application under Article 32 before this
Court for the same relief, normally the Court will not entertain the application
under Article 32. But where in the parallel jurisdiction, the order is not a
speaking one or the matter has been disposed of on some other ground, this
Court has, in a suitable case, entertained the application under Article 32. 6
Instead of dismissing the writ petition on the ground that the alternative C
remedy had been availed of the Court may call upon the party to elect
whether it will proceed with the alternative remedy or with the application
under Article 226. 7 Therefore the fact that a suit had already been filed by
the appellant was not such a fact the suppression of which could have affected
the final disposal of the writ petition on merits. D
In this case, admittedly the appellant has withdrawn the suit two weeks
after the suit had been filed. In other words the appellant elected to pursue
its remedies only under Article 226. The pleadings were also complete before
the High Court. No doubt, the interim order which was passed by the High
Court was obtained when the suit was pending. But by the time the writ E
petition was heard the suit had already been withdrawn a year earlier. Although
the appellant could not, on the High Court's reasoning, take advantage of the
interim order, it was not correct in rejecting the writ petition itself when the
suit had admittedly been withdrawn, especially when the matter was ripe for
hearing and all the facts necessary for determining.the writ petition on merits p
were before the Court, and when the Court was not of the view that the writ
petition was otherwise not maintainable.

As the issue of suppression was the only ground on which the High
Court has rejected the appellant's plea for relief, we would ordinarily have
set aside the order of the High Court in view of our finding and remanded G
back to the High Court for decision of the matter on merits. But the matter
has been argued on merits before us and we are in a position to dispose of
the matter which we accordingly proceed to do.

6. AIR (1970) SC 898.
H
7. K.S. Rashid v. Income Tax Investigation Commission, AIR (1954) SC 207.
64 SUPREME COURT REPORTS (2004] 3 S.C.R.

A We are of the view that the sale effected in favour of respondent No.
6 cannot be sustained. It is axiomatic that the statutory powers vested in the
State Financial Corporation under the State Financial Corporation Act, must
be exercised bonafide. The presumption that public officials will discharge
their duties honestly and in accordance with the law may be rebutted by
B establishing circumstances which reasonably probabalize the abuse of that
power. In such event it is for the concerned officer to explain the circumstances
which are set up against him. If there is no credible explanation forthcoming
the Court can assume that the impugned action was improper See : Mis.
Pannalal Binjraj and Ors. v. Union of India and Ors., AIR (1957) SC 397,
409. Doubtless some of the restrictions placed on State Financial Corporations
C exercising their powers under Section 29 of the State Financial Corporation
Act, as prescribed in Mahesh Chandra v. Regional Manager, UP. Financial
Corpn. [1993] 2 SCC 279 , are no longer in place in view of the subsequent
decision in Haryana Financial State Corporation v. Jagdamba Oils Mills.
However, in over-ruling the decision in Mahesh Chandra, this Court has
D affirmed the view taken in Chairman and Managing Director, SIPCOT,
Madras v. Contromix Pvt. Ltd., [1995] 4 SCC 595 and said that in the matter
of sale under Section 29, the State Financial Corporation must act in accordance
with the statute and must not act unfairly i.e. unreasonably. If they do their
action can be called into question under Article 226. Reasonableness is to be
E tested against the dominant consideration to secure the best price for the
property to be sold. "This can only be achieved when there is a maximum
participation in the process of sale and everybody has an opportunity of
making an offer. Public auction after adequate publicity ensures participation
of every person who is interesting in purchasing the property and generally
secures the best price".
F
Adequate publicity to ensure maximum participation of bidders in turn
requires that a fair and practical period of time must be given to purchasers
to effectively participate in the sale. Unless the subject matter of sale is of
such a nature which requires immediate disposal, an opportunity must be
given to the possible purchaser who is required to purchase the property on
G 'As is where is basis' to inspect it and to give a considered offer with the
necessary financial support to deposit the earnest money and pay the offered
amount, if required.

In this case, the first notice of sale was given on 31st January 2002. A
H period of about four weeks was given to the purchasers to submit their offers
by 28th February 2002. The period of four weeks can therefore be taken to

.
S.J.S. BUSINESS ENTERPRISES (P) LTD. v. STATE [RUMA PAL, J.] 65

x be the ordinary norm. But when the second impugned notice of sale was A
given on 26th March 2002, less than three days were given for the purchasers
to inspect the premises, make necessary arrangements and submit their offers
to BICICO. Of these three days, two were public holidays when banks would
have also been shut. The period of notice was, in the circumstances, entirely
inadequate. Besides, we have not been told the reason for this unusual haste. B
Such precipitate action was not called for unless· there were some other
considerations weighing with the authorities, considerations which have not
been disclosed to the Court.

The method in which the sale was conducted is also questionable.
Three valuations were' obtained between 3rd July 200 I to February 2002 C
before the property was sold to the respondent No. 6. What was valued in
July 2001 as worth Rs. 2.16 crores is valued at Rs. 94.81 about IO months
later, a fall of over Rs. 1.50 crores.

The third extra ordinary circumstance is that the respondent No. 6 had
submitted his offer on the day on which the sale notice was published and D
made payment of the entire consideration on the same day before the last
date for submission of tenders was over and even before its offer could have
been accepted. It is unlikely that this would have been done unless the
respondent No. 6 knew (i) the valuation made and (ii) that its offer would be
accepted. Indeed a portion of the respondent No. 6's offer had already been
paid on 7th March 2002 i.e. prior to the sale notice itself. According to the E
Respondent No. 6 this was pursuant to the earlier infructuous sale notice, a
payment which, again for some undisclosed reasons, had not been returned
by BICICO to the respondent No. 6.

No satisfactory explanation is forthcoming from the authorities to explain F
these deviations from the norm. The concatenation of inexplicable and
,i.. unexplained circumstances is sufficient for us to hold that the sale was unfair
and consequently invalid.

In Jagdamba Oils Mills Ltd. (supra), it was observed that, "the Court
may assist the borrower who 1tas intention to repay but is prevented by G
insurmountable difficulties in meeting the commitment''. The borrower in
that case had made no payment whatsoever to the State Financial Corporation
of its outstanding loan. As not even "a minimal portion of the amount borrowed
had been paid the Court refused to help the defaulter. The borrower, in this
case had paid over Rs.14 lakhs as against the principal amount of Rs.44.56
lakhs. A further amount of Rs.IO lakhs was paid on 27th March 2002 by the H
66 SUPREME COURT REPORTS [2004] 3 S.C.R.

A appellant to BICICO i.e. the day after the impugned sale notice was published. /
Before the High Court a sum of Rs. I0 lakhs was paid pursuant to the interim
order. In addition, the appellant had approached the BICICO to settle its
outstanding dues under the one time settlement policy. As we have already
recorded, we entertained the special petition on the condition that the appellant
would deposit a sum of Rs. 1 crore over and above the amount already paid
B by it to BICICO. This the appellant has also done. All this shows that the
appellant could not be termed to be such a defaulter who deserved no sympathy
or assistance by the Court.

The respondent No 6 has pleaded that it has been deprived of Rs.
C crore, had been kept out of the possession for I4 months and has, after taking
possession, made substantial investments in the property. As far as the first
factor is concerned, the appellant has offered to pay interest on the amount
of Rs. 1 crore to the respondent No. 6. On the second, we have not been told
whether any formal agreement has been concluded between BICICO and the
. respondent No. 6 or whether any conveyance has been executed or any other
D formality completed by BJCICO to transfer the title in the hotel in favour of
the respondent No. 6. It appears to have handed over possession to the
Respondent No. 6 only upon the direction of the High Court. As far as the
third ground is concerned, the appellant was fully aware that the appellant
was fighting tooth and nail to redeem its property and that the sale was the
E subject matter of scrutiny by Court. If it has chosen to make renovation or
investments in the hotel, it has done so despite the knowledge of the
precarious nature of its possession. The investments, if any, were a calculated

-
risk taken by the respondent No. 6 itself the consequence of which cannot be
foisted on the appellant.

p Jn the circumstances, we set aside the decision of the High Court and
grant the appellant the reliefs claimed in the writ petition. The sale of the
appellant's hotel to the respondent No. 6 is set aside. The Respondent No. 6
is directed to hand over the possession of the hotel to BI CJ CO who will hand
over the same to the appellant. BICICO is at liberty to withdraw the sum of
Rs. I crore (except for the interest thereon) deposited with the Registry of
G this Court and will refund the amount of Rs. I Crore received by it from the
respondent No. 6 to it. BICICO will adjust the sum withdrawn by it from this
Court towards its claim against the appellant without prejudice to the rights
of either party. The appellant may withdraw the interest on the amount of Rs.
I Crore deposited by it with the Registry and shall pay the amount to the
H respondent No. 6. The appellant shall also pay the balance of the interest on
S.J.S. BUSINESS ENTERPRISES (P) LTD. v. STATE [RUMA PAL, J.] 67

Rs. I crore to the respondent No. 6 at the rate at which banks grant interest A
on fixed deposit for the relevant time i.e. between the dismissal of the writ
petition by the learned Single Judge till the date of making the payment less
the amount already paid by it as aforesaid. The handing over of the possession
of the hotel by BI CI CO to the appellant and the payment of the interest on
the amount of Rs. l crore to the respondent No. 6 by the appellant shall be B
simultaneously done.

The appeal is thus allowed with costs.

v.s.s. Appeal allowed.

_,