Gujarat High Court
Empire Hotel And Resorts Limited vs Gujarat Industrial Investment ... on 23 March, 2017
Author: K.M.Thaker
Bench: K.M.Thaker
C/MCA/759/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
MISC. CIVIL APPLICATION (FOR DIRECTION) NO. 759 of 2016
In SPECIAL CIVIL APPLICATION NO. 11524 of 2002
EMPIRE HOTEL AND RESORTS LIMITED....Applicant(s)
Versus
GUJARAT INDUSTRIAL INVESTMENT CORPORATION LIMITED &
7....Opponent(s)
Appearance:
MR AS VAKIL, ADVOCATE for the Applicant(s) No. 1
MR MANAN MENTA AGP for the Opponent(s) No. 2 - 3
MR BH BHAGAT, ADVOCATE for the Opponent(s) No. 4 - 5
MR DHARMESH V SHAH, ADVOCATE for the Opponent(s) No. 7
MR PM LAKHANI, ADVOCATE for the Opponent(s) No. 8
MR RD DAVE, ADVOCATE for the Opponent(s) No. 1
MS NALINI S LODHA, ADVOCATE for the Opponent(s) No. 6
NOTICE SERVED BY DS for the Opponent(s) No. 1 - 3
CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 23/03/2017
ORAL ORDER
1. Heard Mr. Vakil, learned advocate for the applicant and Mr. R.D. Dave, learned advocate for the opponent No.
1.
2. In light of developments which took place after the application was filed, Mr. Bhagat, Mr. Shah and Ms. Lodha, learned advocates are not present since the cases wherein they appeared, are settled. Mr. Lakhani, learned advocate Page 1 of 7 HC-NIC Page 1 of 7 Created On Tue Apr 18 00:34:19 IST 2017 C/MCA/759/2016 ORDER for the opponent No. 8 is present.
3. In present application, the applicant Empire Hotel and Resorts Ltd., original Respondent No.6 in Special Civil Application No.11524 of 2002 has prayed, inter alia, that:
"(A) to direct the Registry of this Honble Court to issue a cheque of Rs.45 lacs in favour of State of Gujarat- Luxury Tax Commissioner out of the sale proceeds lying with the Registry of this Honble Court pursuant to the final judgment and order dated 15.01.2009 passed in Special Civil Application No.11524 of 2002 or in the alternative direct the opponent no.2-State of Gujarat to take such steps as this Honble Court deems fit for withdrawing an amount of Rs.45 lacs;
(B) to direct the Registry of this Honble Court to issue a cheque for a sum of Rs.66.38 lacs in favour of Industrial Development Bank of India Limited out of the sale proceeds lying with the Registry of this Honble Court pursuant to the judgment and order dated 15.01.2009 passed in Special Civil Application No.11524 of 2002;
(C) to direct the Opponent No.5- Industrial Development Bank of India Limited to issue a No due certificate in favour of the applicant company;
(D) to direct the Opponent No.1-GIIC, the Opponent No.4-IFCI and the Opponent NO.6-ARCIL to take a final decision on the letters (Annexures 9, 10, 11, 12, 13 &
14) addressed by the Applicant Company in the matter of out of Court settlement offered on a without prejudice to them;"
4. It is accepted and declared by Mr. Vakil, learned advocate for the applicant that in view of the orders dated 6.10.2016 and 11.3.2016 the relief prayed for in paragraph Nos.4(A), 4(B) and 4(C) now does not survive. Now, the application is pressed for relief prayed for in paragraph No.4(D).
5. Mr. Vakil, learned advocate for the applicant further Page 2 of 7 HC-NIC Page 2 of 7 Created On Tue Apr 18 00:34:19 IST 2017 C/MCA/759/2016 ORDER submitted that after settlement with other banks / institutes now settlement with GIIC is arrived at. Mr. Dave, learned advocate for respondent GIIC confirmed said submission.
6. With reference to this application, this Court in the order dated 11.3.2016, observed and recorded that:-
"3. It appears from the facts available from the record that the applicant company had availed financial assistance from opponent No.1-Gujarat Industrial Investment Corporation Limited, opponent No.4-Industrial Financial Corporation of India, opponent No.5-Industrial Development Bank of India, opponent No.6-Assets Reconstruction Co. (India) Limited as well as opponent No.7- Charotar Nagrik Sahakari Bank Limited (In Liqn.). Financial facilities extended to the applicant company was secured by way of mortgage of immovable property known as Shalin Hotel of the applicant company, all the lenders are having pari pasu charge over the mortgage property.
3.1 It appears that on account of unpaid luxury tax payable to the State Government, opponent No.3-City Deputy Collector issued Notification dated 30th September, 2002 under the provisions of the Bombay Land Revenue Code inviting offers for sale from the public at large for disposal of the mortgaged property. It appears that GIIC filed Special Civil Application No.11524 of 2002 before this Court invoking Section 29 of the State Financial Corporation Act.
3.2 This Court passed order dated 15th January, 2009 in the said Special Civil Application of GIIC issuing following direction.
23. In view of the aforesaid, following consequences:-
(i) The impugned action of respondent No.2 for publication of the notification dated 30th September, 2002 Annexure A is quashed and set aside, so far as it relates to enforcing the right to recover the amount of Government Taxes as per the Code by nullifying the mandate of the power conferred upon the petitioner under Section 29 of the SFC Act.
(1) However, as the sale has taken place pending the petition before this Court and the sale is confirmed in the proceedings before this Court, including LPA, the said sale shall stand confirmed.
(ii) Out of the amount of sale proceeds with the accrued interest lying with this Court, the following amount as per the table hereunder minus the amount as ordered to be recovered by way of penalty vide order dated 31.03.2008 passed by this Court (Coram :C.K. Buch, J.) in Civil Application No.12417/07 in Special Civil Application No.11524/02 with Civil Application No.1585/08 read with the order dated 29.12.2008 passed by the Division Bench of this Court (Coram : K.S. Radhakrishnan, C.J. & Akil Kureshi, J.) in Letters Patent Appeal No. 753/08 in Civil Application No. 12417/07 with Letters Patent Appeal No.889/08 in Civil Application No.12417/07 with Letters Patent Appeal No.1261/08 in Civil Application No.1585/08 shall be disbursed to the concerned Financial Institutions and to respondent No.2 being Government Authority, subject to the final decision, as may be taken by appropriate forum/authority, Page 3 of 7 HC-NIC Page 3 of 7 Created On Tue Apr 18 00:34:19 IST 2017 C/MCA/759/2016 ORDER for final adjudication of the amount to be recovered or recoverable by the concerned Financial Institutions or the Government Authority, as the case may be, from respondent No.6 Company and also on condition that the concerned Financial Institutions and respondent No.2 file undertaking before this Court to the effect that in the event it is found by appropriate forum/concerned authority that no amount is recoverable by such financial institutions or the Government Authority, as the case may be, the amount received by it shall be returned to respondent No.6 company with interest at the rate of 8% p.a. within two months from the decision of such forum/concerned authority, unless such decision is stayed, modified or reversed by higher forum known to law.
Sr. Particulars Amount
No. (in lac)
i IFCI Rs. 91.40
ii IDBI Rs. 138.63
iii Assets Reconstruction Company Rs. 65.77
(now Usha Martin)-Respondent No.5
iv GIIC (Petitioner) Rs. 32.29
v Charotar Nagrik Coop. Bank Limited Rs. 376.73
Respondent No.7
To all Secured Creditors Rs. 704.82
Government Taxes:
Luxury Tax - Rs. 45.00
State Dues - Rs. 60.00
Total Rs. 809.82
(iii) The claim of the workers/employees, if any, can be considered on pari passu basis with the secured creditors. However, as the quantification is not finalized by any appropriate forum, nor are the details thereof placed on record, the disbursement of the amount to the workers/employees shall await till the final adjudication by the concerned forum, if any. Hence, the order for disbursement to the workers/ employees is not passed at this stage, but upon the quantification of the amount by appropriate authority, the proportionate amount on pari passu basis with the secured creditor shall remain set apart towards workers' dues.
(iv) The balance of the sale proceeds together with the accrued interest with this Court shall remain as invested.
(v) After the aforesaid adjudication process is finalized before the appropriate forum/concerned authority, it would be open to the concerned Financial Institutions/concerned Authority to move this Court for further disbursement, if any, in accordance with law, unless such decision of appropriate Page 4 of 7 HC-NIC Page 4 of 7 Created On Tue Apr 18 00:34:19 IST 2017 C/MCA/759/2016 ORDER forum/concerned authority is stayed, modified or reversed by higher forum known to law.
vi. It will also be open to respondent No.6 company to move this Court for refund of the amount in the event, out of the decision of the adjudication process by appropriate forum/concerned authority, no further amount is payable by respondent No.6 company to the concerned Financial Institutions, unless such decision is stayed, modified or reversed by higher forum known to law.
24. In view of the above, Special Civil Application No.11524 of 2002 shall stand allowed to the aforesaid extent. Rule made absolute accordingly. No order as to costs."
7. Today at the time of hearing of present application Mr. Vakil and Mr. Dave, learned advocates jointly submitted that so far as claim by the respondent Gujarat Industrial Investment Corporation ("GIIC" for short) is concerned, the said claim is also settled between the parties outside the Court and terms of settlement are reduced into writing by way of letter of agreement dated 18.3.2017. Mr. Vakil and Mr. Dave, learned advocates jointly submitted that the respondent GIIC has accepted offer for One Time Settlement and the terms and conditions are agreed upon which are enumerated in the letter of agreement dated 18.3.2017. The said letter of agreement is tendered on record.
8. Having regard to the above stated facts the only claim which now survives is with reference to Industrial Financial Corporation of India ("IFCI" for short). Page 5 of 7 HC-NIC Page 5 of 7 Created On Tue Apr 18 00:34:19 IST 2017 C/MCA/759/2016 ORDER
9. In that view of the matter, this Court is of the view that present application can be disposed of with following order:-
(i) The parties i.e. applicant and opponent GIIC will act in accordance with and will abide by the terms and conditions contained in the letter of agreement dated 18.3.2017;
(ii) The parties are permitted to give effect to their "One Time Settlement" on payment of Rs.39,50,000/- as agreed between the parties according to the terms and conditions of the letter of agreement dated 18.3.2017;
(iii) Registry of this Court shall issue a cheque for Rs.39,50,000/- (Rs. Thirty Nine Lakhs Fifty Thousand) after breaking Fixed Deposit, if required, out of the amount lying with it (pursuant to order dated 15th January, 2009 in Special Civil Application No.11524 of 2002) so as to issue cheque in the name of Gujarat Industrial Investment Corporation on or before 29.3.2017;
Page 6 of 7 HC-NIC Page 6 of 7 Created On Tue Apr 18 00:34:19 IST 2017 C/MCA/759/2016 ORDER
(iv) Upon receipt of the aforesaid amount, opponent No.5- IDBI Bank shall issue No Due Certificate to the applicant preferably within four weeks;
(v) Balance amount shall remain invested in the Fixed Deposit on same terms and conditions (as per the order dated 15.1.2009).
It is further clarified that so far as respondent IFCI is concerned the applicant shall be at liberty to file appropriate fresh application.
With the aforesaid clarification the application is disposed of.
Orders accordingly.
(K.M.THAKER, J.) Suresh* Page 7 of 7 HC-NIC Page 7 of 7 Created On Tue Apr 18 00:34:19 IST 2017