Terai Tea Trading claims that it was the highest bidder in a public offer for buying out TTCI, which was subsequently cancelled since all the quotations received were below the reserve price. Terai Tea moved the Calcutta high court in late December last year and obtained an ex-parte order for negotiating with the Union commerce ministry to strike the TTCI deal.

However, on December 23, 1998, TTCI moved the Calcutta high court against the proposed sale. The case will be heard on January 19.

When contacted by The Financial Express, TTCI counsel P Bhaskaran said the proposed sale has been opposed on two issues. Terai Tea Trading's letter dated December 30, 1998, to SBI Capital Markets Ltd which is supervising the disinvestment process, hadactually suppressed certain information, said Bhaskaran.

He pointed out that firstly Terai Tea was not the highest bidder for buying out two gardens -- Vahtukar and Potom -- and not the company as a whole. This offer of January 1997 was cancelled on March 1, 1997 and the earnest money deposited by the bidders returned.

Bhaskaran said Terai Tea had encashed the earnest money on March 4, 1997 and later moved the Calcutta high court claiming to be the highest bidder. In its ex-parte order, Calcutta high court directed Terai Tea to negotiate with the government to buy out the two gardens. However, Terai Tea's letter to SBI Capital Markets Ltd stated that the Union ministry was negotiating with it for selling the whole company which includes 100 per cent share with face value of Rs 15 crore, which is now held by State Trading Corp.

Bhaskaran pointed out that the erstwhile owners of TTCI's gardens had obtained a stay order against any proposal to sell these gardens to any party. The government had taken overthe gardens because they had slipped into the red and were being mismanaged. The erstwhile owners contended that since the government was unable to run the two gardens successfully, if there was any proposal to sell them, the first offer would have to be made to the erstwhile owners.

In its petition, TTCI had stated that the government could not sell the gardens since the litigations were still pending.