In Brief
M/s Bharat Commerce & Industries Limited (BCI), a sick industrial company, put up its assets for sale through sealed-bid auction. The appellants submitted the only bid of Rs. 2,84,00,000 for Block IV but failed to furnish the required bank guarantee or deposit purchase consideration as mandated by the Asset Sale Committee (ASC) guidelines. After initial rejection by BIFR, the Appellate Authority (AAIFR) confirmed the bid. The High Court set aside the auction, finding the procedure fundamentally defective: no approved valuation report or reserve price was disclosed upfront, and there was no competitive bidding. The Supreme Court upheld the High Court, holding that valid public auctions require competitive bidding and strict compliance with statutory requirements. Later offers from non-participating parties could not substitute the invalid original process. Both appeals were dismissed, and the property was to be resold through a fresh, legally compliant auction.
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