In a major boost to NAFED’s recovery efforts, which were impacted by tie-up losses between 2003 and 2005, the organization auctioned a defaulter’s property in Manali, generating significant interest and ultimately selling the property for more than double its reserved price, according to a top NAFED official who spoke on condition of anonymity.
On December 16, 2024, the property of M/s Veecon Impex, operating as Mahadev Resort in Up-Mahal Simsa, Manali, Himachal Pradesh, was auctioned as per the Proclamation of Sale under Order XXI, Rule 66 of the CPC (Schedule-I).
This auction was conducted following an order by the Hon’ble High Court of Himachal Pradesh, marking a significant step by NAFED (National Agricultural Cooperative Marketing Federation of India) in its recovery efforts.
The defaulter, a tie-up partner of NAFED, owed approximately Rs 12 crores, and the property sale secured Rs 9.05 crores for the organization. The auction, conducted by the office of the District Collector, Kullu, witnessed the participation of 20 bidders from across the country, demonstrating substantial interest in the property.
NAFED played a crucial role in ensuring the success of the auction. Despite initial concerns about low participation, NAFED’s proactive measures created a conducive environment for a fair bidding process. Officers from its Chandigarh Branch and Head Office were deployed to oversee the proceedings and ensure transparency.
The issue dates back to 2003-05 when 62 companies entered into tie-up business arrangements with NAFED, collectively availing around Rs 3,945 crores. Unfortunately, 29 of these companies defaulted, failing to return the borrowed funds, plunging NAFED into a severe financial crisis.
Investigations revealed that many defaulters had either siphoned off the funds or diverted them for unauthorized purposes. Consequently, civil and criminal cases were filed against these companies and involved officials. However, several recovery cases remain pending in various courts.
Under its new management, NAFED has accelerated the recovery process and intensified its legal efforts. A comprehensive plan has been devised to take strict action against major defaulters evading the law. It bears recalling that Deepak Agarwal, a 2000-batch IAS officer from the Uttar Pradesh cadre has taken over as the new Managing Director of NAFED recently.
NAFED is now seeking the assistance of enforcement agencies such as the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), and Serious Fraud Investigation Office (SFIO) to trace the misused funds. It is also engaging specialized agencies to track the money trails and hold defaulting companies and their directors accountable.
This auction is a significant milestone in NAFED’s ongoing recovery initiatives. In the coming days, more stringent measures are expected as the organization continues its efforts to recover the remaining funds and bring defaulters to justice. NAFED’s firm stance underscores its commitment to restoring financial stability and safeguarding public resources.
