SC Refuses To Stay Bombay HC Order On Irregularities In NSEL Land Auction Case

Mumbai: The Supreme Court recently  refused to stay a Bombay High Court (HC) judgment that found serious irregularities in the valuation and auction of a Haryana land parcel attached in the NSEL scam and questioned the role of the valuer whose assessment formed the basis of the sale.

A bench of Chief Justice of India Surya Kant and Justice Joymalya Bagchi ultimately allowed Quiker Realty, the valuer, to withdraw its special leave petition and pursue a review before the High Court.

The petition challenged the Bombay High Court’s May 8 judgment directing the valuer to be blacklisted for five years.

During the hearing, the Supreme Court repeatedly questioned how a 35-acre land parcel in Haryana, earlier valued at several times higher, was ultimately sold for around Rs10 crore.

The CJI observed that they were not going to stay the order as, prima facie, the property of Rs100 crore was being sold through dubious procedure to a person for Rs10 crore. The CJI added that the purchaser was a private builder familiar with the land’s value.

The land was initially valued by Quiker Realty at around Rs74.74 crore, with a distress-sale value of about Rs56 crore and circle-rate value of Rs95 crore. Two auctions with a reserve price of Rs60 crore failed.

However, a fresh valuation conducted in June 2020 assessed the land at around Rs10.41 crore after treating it as agricultural land on an “as is where is” basis. The property was later auctioned to Rudraveerya Developers Ltd for about Rs10.09 crore.

The Bombay HC had set aside the auction sale after finding that the property had been wrongly treated as agricultural land despite being located in a residential sector. It also noted that no site inspection had been conducted before the revised valuation and termed the episode a “scam within the scam”.

The Supreme Court also criticised the Maharashtra government for opposing the HC’s direction to replace the Competent Authority under the MPID Act. CJI remarked that the HC had detected a big fraud and in fact, HC should have directed registration of FIR. 

The SC was informed that the Competent Authority was an officer of Deputy Collector rank. 

Counsel for the valuer argued that no notice had been issued before adverse directions were passed against Quiker Realty. He sought interim protection to enable the firm to approach the HC in review.

The Supreme Court refused interim relief, observing that the record disclosed serious concerns regarding the valuation process. Quiker Realty thereafter withdrew its petition with liberty to file a review before the HC.

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