Date:04/10/2008 URL: http://www.thehindu.com/2008/10/04/stories/2008100459760600.htm

Karnataka

NGEF assets to be auctioned again

B.S. Ramesh

Supreme Court gives the go-ahead to State

The apex court order came last week
Prestige Group had challenged High Court
order on auction proceedings

BANGALORE: The New Government Electric Factory (NGEF) is in the news again. Just weeks after the Centre rejected the Karnataka Government’s proposal for reviving the factory, the Supreme Court has permitted the State to go ahead with the re-auction of the assets.

The Supreme Court passed the order last week when it disposed of a petition by Prestige Group which challenged the Karnataka High Court order of 2005 terminating the auction proceedings.

Prestige Garden Estates Private Limited, a real estate company, had challenged before the Supreme Court the Company Court order of December 23, 2005 terminating the auction proceedings of NGEF assets and giving the State Government time till March 16, 2006 to submit a comprehensive revival package for the unit.

With the High Court cancelling the auction, Prestige’s successful bid of Rs. 1,591.66 crore for the NGEF assets also came to be nullified. Subsequently, the Company Court had given time to the State to come up with a viable revival package for NGEF.

Later, the Company Court said that there was no need for the State to obtain permission of the court for reviving an industry and that the revival package could be placed before the Centre. Meanwhile, Prestige moved the Supreme Court against the High Court order.

With the Centre failing to clear the revival package and with the Supreme Court giving the go-ahead for the re-auction, the Government seems to be in a bind. It now has only one option and that is to once again move the High Court for re-auction of NGEF assets.

Advocate-General Uday Holla, who represented the State in both the High Court and Supreme Court, told The Hindu that the Government would soon file an application before the Company Court for permitting re-auction of NGEF assets.

The re-auction would include the movable and immovable assets of NGEF, including the land around the factory located on Old Madras Road.

It would, however, exclude 53 acres of NGEF land that the Government acquired for an integrated transport complex for setting up terminals of KSRTC, BMTC and BMRCL.