The Supreme Court on Monday upheld the sale of five star luxury property Park Hyatt Goa to ITC by Industrial Financial Corporation of India (IFCI) and directed the transfer of the property to be completed within six months. A Bench comprising justices SA Bobde and L Nageshwara Rao set aside the Bombay High Court order that quashed the sale of Park Hyatt Goa Resort & Spa to ITC, which had emerged as the highest bidder of the property in February 2015 with an offer of Rs 515.44 crore.

The auction of the 250-room hotel property was challenged by its original owner Blue Coast Hotels on the grounds that the actual value of the property was around Rs 1,250 crore and the price quoted by the top bidder ITC was not even half the property’s value. The company had also alleged some kind of collusion between lender and ITC.

Denying any discretionary equitable relief to Blue Coast, the apex court said several opportunities were availed by the debtor for the repayment of the loan after the proceedings were initiated by IFCI, but its “conduct has been merely to seek time and not repay the loan as promised on several occasions”.

“We fail to see how such a finding of manipulation and collusion is sustainable on account of breach of law in the present case. A risk of this kind taken up by an intending purchaser cannot lead to an inference of collusion. Mainly, the finding is based on the fact that the sale is a collusion because the auction purchaser was aware that a dispute between the parties was pending and still went ahead and made a bid for the property. It is not unusual in the sale of immovable properties to come across difficulties in finding suitable buyers for the property. We find that the property was eventually sold on the fourth auction, and all the auctions were duly advertised,” justice Bobde, writing for the Bench, stated.

The HC while allowing Blue Coast to retain physical possession of the property had entitled ITC to get the refund of the amounts paid to IFCI.

The HC in its in March 2016 order had observed that “the inference of collusion between IFCI and ITC cannot be ruled, particularly when the other bidders may not have come forward as there was no physical possession being handed over at the time of the sale. It resulted in the property not fetching its potential market purchase price and ITC was the sole bidder who bid only `1,000 more than the reserved price”, said the order.

Blue Coast had mortgaged the hotel property build on 45 acre with IFCI against a `150-crore loan. IFCI took the possession of the property under the SARFAESI Act in June 2013 after the Blue Coast defaulted on loan payment of `133.18 crore. IFCI tried to auction the property more than thrice, but was unable to complete the auction process as Blue Coast had opposed any such move before variopus fora.