The Hammer is yet to go down for Calico Mills

Source:Tejas Mehta Law et al. News Network
The Gujarat High Court on Thursday cancelled the auction of Ahmedabad’s famous landmark Calico Mill and directed the Official Liquidator (OL) to conduct the auction again after fixing the upset price. The public auction of plant, machinery and land of Ahmedabad Manufacturing & Calico Printing Mills Company Ltd was held last month by the OL. In the auction Mumbai-based Ajmera group and Ahmedabad based Bakeri group bided the highest amount at Rs 211 crore against the upset price of Rs 203.46. There were four other bidders in the race. The seemingly low valuation of the large piece of prime land situate in the middle of the city resulted into allegations of real estate groups forming a syndicate which ultimately kept the value low at the auction. The allegation was levelled on basis of the fact that the OL opened the auction at Rs 10 crore higher than the upset price i.e. at Rs 213 crore, but the bidding did not cross Rs 207 crore. In the second round of bidding called by the OL during auction, the highest price bidded by the two groups jointly was Rs 211 crore. The second bidder requested the high court to give directions to return their Rs 20 crore deposit. The high court sought for the OL’s report, in which it is learnt to have expressed the view that the bidding was not up to the expectation. There was also a proposal during the hearing on Wednesday that the land can be divided into five parts so that maximum price could be fetched from different bidders. After the hearing, Justice MR Shah rejected the OL’s report of the auction and cancelled the auction that took place last month. The high court has directed that the auction be conducted again by deciding the upset price once again. Calico was established by Sheth Karamchand Premchand in 1880. Later, Ambalal Sarabhai developed the unit as one of the most modern and extensively diversified pacesetters in the Indian cotton industry. It was the first Indian textile mill to manufacture cotton sewing thread and later 100 percent synthetic sewing thread.