The High Court also said that Citra Developers, subsidiary of Indiabulls, was entitled to withdrawing its winning bid in the earlier auction, as it was not willing to match the reserved price fixed by the High Court.

In the past, auctions were conducted five times, but the highest bid failed to match the reserved price fixed by the court.

Creditors of PAL, including ICICI, had sought auction after company went into liquidation. On the last occasion, Citra’s bid of Rs 676 crore was the highest. However, the reserved price set by a single judge of the court was Rs 1600 crore, and Citra was not ready to raise the bid to match the reserved price.

Therefore, last year Justice Roshan Dalvi allowed Citra to withdraw the bid, and to reclaim the 25 per cent of the amount that it had deposited.

PAL-Peugeot workers union challenged this order, saying Citra cannot withdraw its bid. Workers are looking forward to completion of the auction, as some of the proceeds would be used to pay off their dues. However, division bench of Justice PB Majmudar and Justice R C Chavan on Friday held that Citra was entitled to withdraw the bid, as it cannot be compelled to match the reserved price that was not known to it before submitting the bid.

The court also said that it could not modify the reserved price at this stage. Asking the court receiver to expedite the re-auction with fresh bids in four months, the division bench said that the single judge who would supervise the new auction would have to determine the reserved price afresh.

The court has also stayed the order for a period of