DRAT ordered AIP Rolling Mills of Ludhiana to pay Rs 1 lakh as penalty for trying to "scuttle" an auction process for a factory land-cum-building in that district.
The state tribunal had earlier directed the company to forfeit the entire amount of Rs 67.5 lakh, which it had deposited to win the contract at the time of the auction.
DRAT Chairperson S N H Zaidi modified the state tribunal order saying, "Forfeiture of such a huge amount towards penalty is neither warranted nor justifiable.
"In my view, for scuttling the auction process and for causing hindrance in the recovery of public money, a penalty of Rs one lakh would be appropriate and proper."
The case relates to auction of a 2,500 sq yard property comprising of a factory and surrounding land in the possession of the State Bank of India, Chandigarh.
The auction process had taken place on June 18, 2010, and the sole bid received by the bank was from Knit Well Fashions which had bid an amount of Rs 2.43 crore.
On June 22, 2010, AIP had moved an application in the state tribunal seeking to set aside the auction sale of the said property saying they did not get an opportunity to bid during the auction process.
On June 24, 2010, the state tribunal had restrained the bank from confirming the sale to Knit Well Fashions and asked AIP to submit an undertaking that it was willing to bid for the said property against the other company. Knit Well subsequently withdrew from the bidding as AIP was willing to pay a higher bid amount.
AIP later refused to buy the property saying it had come to know of certain litigations and encumbrances in respect of that property.
It had told the tribunal that it was willing to pay the full purchase amount of Rs 2.7 crore only when the property would be free of the said litigations.
The tribunal, however, had dismissed its plea saying there were no terms or conditions in the auction offer that the property should be free of litigations and encumbrances.
It had also directed the company to forfeit the deposited amount of Rs 67.5 lakh saying such applications wasted its precious time.
