Himachal Pradesh High Court
State Of Himachal Pradesh & Ors vs E.I.H. Limited & Ors on 10 April, 2025
Author: Jyotsna Rewal Dua
Bench: Jyotsna Rewal Dua
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA OMP No. 321 of 2025 in Execution Petition No. 19 of 2023 Decided on: April 10 , 2025 State of Himachal Pradesh & ors. ...Petitioners/Original Claimant No. 2/ Applicant.
Versus E.I.H. Limited & ors. ...Respondents/Original Claimant No. 1/ Non-applicants.
Coram:
Ms. Justice Jyotsna Rewal Dua, Judge 1 Whether approved for reporting? Yes.
Mr. Dhruv Mehta, Senior Advocate (through V.C.) with Mr. Prabhat Kumar (through V.C.) & Mr. Vivek Negi, Advocates and Mr. Anup Rattan, Advocate General with Mr. Rajat Choudhary, Asst. AG for the petitioners/applicant in Ext. Pet. No. 19 of 2023 and for the respondents in Ext. Pet.
No. 5 of 2023.
For the respondents/non-
applicants. :Dr. Abhishek Manu Singhvi, Senior Advocate with Ms. Priyanshi Sharma, Ms. Sneha Janakiraman, Ms. Saloni Gupta & Mr. Hardik Malik, Advocates and Mr. Rakeshwar Lall Sood, Senior Advocate with Mr. Arjun Lall, Mr. Aakash Thakur, Mr. Sahil Thakur & Mr. Vidur Kapur, Advocates, for the petitioners in 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes.2
Ext. Petition No. 5 of 2023 and for the respondents/non-applicants in Ext. Pet.No. 19 of 2023
The State of Himachal Pradesh/Claimant No. 2, in this application seeks modification of order dated 27.03.2025 passed in Execution Petitions No. 5 & 19 of 2023. The said order reads as under:-
"In furtherance of several orders passed in this execution petition from time to time and the order passed by the Hon'ble Apex Court on 20.02.2024 in SLP(C) Nos.3986-3988/2024, claimant No.1/EIH Ltd. has placed on record an affidavit of Sh. Rajaraman ShankarPresident, Corporate & Legal Affairs, EIH Limited on behalf of EIH Limited. Material particulars of this affidavit are as follows:-
"1. That Execution Petition Number 5/2023 titled EIH Ltd Vs. State of H.P. along with Execution Petition Number 19/2023 titled State of H.P. Vs. EIH Ltd. are pending for adjudication before the Hon'ble Court and were listed before the Hon'ble Court on 22.03.2025, on which date this Hon'ble Court has passed the following order:-
"Learned Advocate General submits that some recent developments (proposals) are necessary to be brought on record of the case. At his request, for this purpose, list on 25.03.2025.
OMP No.94 & 851 in 2024 in Ex. Pet. No.19/2023 Dr. Abhishek Manu Singhvi, learned Senior Advocate for claimant No.1 has commenced his submissions. List for continuation on 10.04.2025, as prayed for."
2. That further, the Execution Petition Number 5/2023 titled EIH Ltd Vs. State of H.P. along with Execution Petition Number 19/2023 titled 3 State of H.P Vs. EIH Ltd. were again listed before the Hon'ble Court on 25.03.2025, when this Hon'ble Court has passed the following order:-
"Ld. Advocate General prays for more time to bring on record the developments that are statedly taking place in the matter. List on 27.03.2025."
3. That in compliance to the above orders and also to the judgment in SLP(C) No.3986-3988/2024 (XIV) dated 20.02.2024, titled EIH Ltd. and Anr. Vs. the State of Himachal Pradesh and Ors., the EIH Ltd. hereby agrees to hand over peaceful and vacant possession of the Property commonly known as Wildflower Hall, measuring about 77,471 Square Mtrs (102.19 Bighas) located at Mauja Chharabra, Pargana Dharthi, Tehsil & District Shimla bearing Khewat No.14/14, Khatauni No.18, Khasra Numbers: 81 to 101 comprising of land, trees, buildings and other structures. (Annexure "A" attached) on 31- 03-2025 before 5 PM to the authorized Representative of the Government of Himachal Pradesh.
4. That all the three directors namely (Mr. Arjun Singh Oberoi), (Mr. Vikramjit Singh Oberoi) and (Mr. Tej Kumar Sibal) of MRL Company, have tendered their resignation and EIH Ltd shall forgo its right to nominate any director in the Company.
5. That EIH Ltd. has agreed to the dissolution of MRL Ltd Company subject to the settlement of accounts as per the terms of the arbitral award by the Chartered Accountants nominated by the Hon'ble Court.
6. That EIH Ltd. shall transfer all its shares in MRL Ltd to the Government of Himachal Pradesh at a valuation to be fixed by the order of the Hon'ble court.
7. That if the Government of Himachal Pradesh considers to permit EIH Ltd. to provide the management services of the property i.e., Hotel Wildflower Hall for the interim period under the short-term management agreement to be agreed upon and EIH Ltd hereby undertakes to this Hon'ble Court to facilitate smooth take over by the State of H.P. for conduct of public auction.
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8. That thereafter management services shall be smoothly handed over to the successful bidder.
9. I further declare and affirm that the contents of the present Affidavit as contained in paras 1 to 8 are true to my personal knowledge and belief. No part of the same is false and nothing relevant to the present query has been concealed therefrom. Signed and Verified on this the 27th day of March 2025 at Shimla."
2. Mr. Anup Rattan, learned Advocate General and Mr. Dhruv Mehta, learned Senior Counsel, appearing for claimant No.2/State submit that the property in question is required to be handed over by claimant No.1/EIH Ltd. on "as is where is basis" on the date of handing over, i.e. 31.03.2025. Dr. Abhishek Manu Singhvi, learned Senior Counsel for claimant No.1/EIH Ltd. fairly submits that it will be handed over on "as is where is basis" on 31.03.2025.
3. Learned Senior Counsel for claimant No.1/EIH Ltd. submitted that all the Directors of EIH Limited have tendered their resignations from the Board of Directors of MRL and that EIH Limited now forgoes its right to nominate any Director in the Company.
4. Mr. Dhruv Mehta, learned Senior Counsel submits that claimant No.1/EIH is also required to transfer all its shares to claimant No.2/State by 31.03.2025 in accordance with paragraph 27 of the order dated 05.01.2024 passed in Execution Petition No.19 of 2023. Dr. Abhishek Manu Singhvi, learned Senior Counsel opposes this plea and submits that the issue of transfer of shares is intrinsically linked with valuation of shares; Without being valued, the shares cannot be transferred and presently the dispute between the parties regarding correct valuation of shares is being adjudicated upon in OMP Nos.94 and 851 of 2024 in 5 Execution Petition No.19 of 2023, which are fixed for hearing on 10.04.2025 for continued submissions of the parties; Therefore, transfer of shares cannot take place at present.
5. At this stage, Mr. Anup Rattan, learned Advocate General, states that he is under instructions to submit that claimant No.2/State is agreeable for transfer of shares by claimant No.1/EIH after decision of OMP Nos.94 and 851 of 2024 by this Court. This is agreeable to claimant No.1/EIH Ltd. In fact, paragraph 6 of the affidavit (extracted above) states that "EIH Ltd. shall transfer all its shares in MRL to the Government of Himachal Pradesh at a valuation to be fixed by the order of the Hon'ble Court". Learned Advocate General also submits that at present, State is not in a position to run/use the property in question and requires time in that regard to complete the tender process; In the interregnum, to ensure that the property in question, which is presently a going concern, is not wasted and there is no loss of revenue, the State is seriously deliberating for giving the possession of the property in question to claimant No.1/EIH Ltd., after the latter hands back vacant possession of the same to the State on 31.03.2025, for its use as per mutually agreed terms & conditions for a specific period of time/till the tender process is completed by the State.
Taking note of the above, list this matter on 10.04.2025, as already fixed."
2. Gist of pleadings in the instant application seeking modification of the above order is that:-
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2(a) During hearing of the case on 27.03.2025, 'the designated counsel' for the State of Himachal Pradesh (Sh. Dhruv Mehta, learned Senior Advocate) had submitted that following three directions were required to be passed for taking over the Joint Venture Company (MRL & Wildflower Hall Property) on 31.03.2025:-
"i) Handing over of the possession of the Wildflower Hall property on "as is where is basis";
ii) Transfer of the shares of EIH in MRL in favour of the State at consideration stated in the Government decision dated 06.03.2002 & Board Resolution dated 07.03.2002 as per the specific directions of the Executing Court in its judgment dated 05.01.2024 duly upheld by the Hon'ble Supreme Court.
iii) Resignation of nominee directors of EIH on the board of MRL."
2(b) Learned Advocate General appearing for the State of Himachal Pradesh on 27.03.2025 while making his submissions inadvertently stated that "Government is agreeable for transfer of shares by claimant No. 1/EIH after decision of OMP Nos. 94 and 851 of 2024 by this Court";The matter was being argued on merits by the learned designated counsel. Learned Advocate General was to only apprise the 7 Court about the Government decision regarding interim arrangement with EIH Ltd. to consider retaining them for providing management services for short period till conclusion of the tender process.
2(c) The Arbitral Award has attained finality. The orders passed in the Execution Petition on 17.11.2023 & 05.01.2024 have been upheld by the Hon'ble Apex Court. Transfer of shares of claimant No. 1/EIH Ltd. in MRL in favour of the State is pre- requisite to the resignation of EIH nominee Directors on Board of MRL and handing over of the vacant possession of the property in question to give full and proper compliance to the aforesaid judgment/orders. EIH Ltd. is not entitled to market value of its shares. EIH Ltd. is making an attempt to re-open the entire matter. The Court, in execution proceedings, cannot entertain the issue of valuation of shares which would tantamount to going behind the decree.
2(d) Prayer has been made in this application for modifying the order dated 27.03.2025 to the extent that (i) State never agreed to the deferment of shares transfer beyond 31.03.2025; (ii) To issue directions to EIH Ltd. to immediately transfer shares in MRL to the State towards implementation of the Arbitral Award and order/judgment dated 05.01.2024 passed in the Execution Petition. The prayer clause of the application reads as under:- 8
"a) Modify its order dated 27.03.2025 to the extent that State never agreed to the deferment of share transfer beyond 31.03.2025;
b) Issue a direction to EIH to immediately transfer its shares in MRL to the State in implementation of the Arbitral Award, judgment dated 05.01.2024 passed by this Hon'ble Court as upheld by the Hon'be Supreme Court vide its order dated 20.02.2024: and
c) Pass such other order/s as may be deemed fit and proper in the facts and circumstances of the case."
3. Heard Sh. Dhruv Mehta, learned Senior Counsel for claimant No. 2/State of H.P. and Ld. Advocate General for the State of H.P. and Dr. Abhishek Manu Singhvi, learned Senior Counsel for the non- applicant/EIH Ltd.
4. Consideration 4(i) At the very outset it may be pointed out that hearing in OMP Nos. 94 & 851 of 2024 moved by the State could not commence prior to 01.03.2025 on count of adjournments, at times prayed for the State by the learned Advocate General and at times by the learned Senior Counsel representing claimant No. 1/EIH Ltd. projecting that endeavours were being made for settlement of the dispute between the parties. This has been noticed in order dated 01.03.2025 as under:-
"3. Parties at their request were directed to complete the pleadings in the applications. Hearing of these applications could not commence previously as learned Senior Counsel & learned Advocate General appearing for the applicant-State as well as learned Senior Counsel 9 representing the non-applicants made submissions that deliberations towards settlement of the entire matter between the parties were going on; A proposal furnished by non- applicants to the applicant-State was under active consideration of the State, therefore, at their request hearing of these applications had been deferred from time to time as is recorded in some of the orders passed in these petitions. It was on 04.01.2025 that learned Senior Counsel for the applicant-State apprised that settlement could not be reached between the parties and prayed for taking up the applications for consideration. Accordingly, the matter was adjourned for today after winter vacation. That is how these applications have been taken up. ... ..."
4(ii) There being dispute between the parties in relation to their financial obligations, duties and rights under the Arbitral Award dated 23.07.2005 and the orders dated 17.11.2023 & 05.01.2024 passed in the Execution Petitions, hearing in OMP Nos. 94 & 851 of 2024 commenced on 01.03.2025 which is still in progress. For accommodating learned Senior Counsel on both sides the applications were taken up for hearing on 01.03.2025, 13.03.2025, 22.03.2025 and today i.e. 10.04.2025. The matter is now fixed on 25.04.2025 for rebuttal arguments of Sh. Dhruv Mehta, learned Senior Counsel representing the State of H.P. 4(iii) The timeline fixed by the Hon'ble Apex Court for handing over the premises to the State of H.P. was 31.03.2025. While the hearing of OMP Nos. 94 and 851 of 2024 was in progress, the matter for this purpose was inquired into from the learned Senior Counsel - Sh. Dhruv Mehta and learned Advocate General appearing for the State of H.P. On 10 22.03.2025 the learned Advocate General submitted that some developments (proposals) are necessary to be brought on record of the case. Hence following order was passed on 22.03.2025:-
"Learned Advocate General submits that some recent developments (proposals) are necessary to be brought on record of the case. At his request, for this purpose, list on 25.03.2025. OMP No. 94 & 851 of 2024 in Ex. Pet. No. 19/2023 Dr. Abhishek Manu Singhvi, learned Senior Advocate for claimant No. 1 has commenced his submissions. List for continuation on 10.04.2025, as prayed for."
When the matter was next taken up on 25.03.2025, learned Advocate General requested for more time, accordingly the order was passed as under:-
"Learned Advocate General prays for more time to bring on record the developments that are statedly taking place in the matter.
List on 27.03.2025."
4(iv) On the next date i.e. 27.03.2025, a detailed order was passed as extracted in para-1, which is sought to be modified in the present application.
The order dated 27.03.2025 (sought to be modified) takes note of all the three submissions made by Sh. Dhruv Mehta, learned Senior Counsel viz. (a) Handing over of property in question on "as is where is basis" on the date of handing over i.e. 31.03.2025; (b) Resignations of the 11 Directors of EIH Ltd/Board of Directors of MRL; and (c) Transfer of shares by EIH Ltd. to State of H.P. by 31.03.2025.
The response to the above three points by Dr. Abhishek Manu Singhvi, learned Senior Counsel for EIH Ltd. has also been noticed in the order dated 27.03.2025 viz. (a) Property will be handed over on 31.03.2025 on "as is where is basis"; (b) Directors of EIH Ltd. have already tendered their resignations from the Board of Directors of MRL and that EIH Ltd. now forgoes its right to nominate any Director in the Company; and (c) On transfer of shares, submission was made that: This is intrinsically linked with valuation of shares; There is dispute between the parties on valuation of shares; Without being valued, the shares cannot be transferred; This dispute is being addressed by the parties in OMP Nos. 94 & 851 of 2024 in Execution Petition No. 19 of 2023, hearing whereof is already in progress.
In response to above, more particularly on point No. (c) Sh. Anup Rattan, learned Advocate General of the State of Himachal Pradesh had stated on 27.03.2025 that claimant No. 2/State is agreeable for transfer of shares of claimant No. 1/EIH Ltd. after the decision of OMP Nos. 94 & 851 of 2024. The statement of Sh. Anup Rattan, learned Advocate General as recorded in para-5 of the order dated 27.03.2025 is again reproduced for convenience:-
"5. At this stage, Mr. Anup Rattan, learned Advocate General, states that he is under instructions to submit that claimant No.2/State is agreeable for transfer of shares by claimant No.1/EIH 12 after decision of OMP Nos.94 and 851 of 2024 by this Court. This is agreeable to claimant No.1/EIH Ltd. In fact, paragraph 6 of the affidavit (extracted above) states that "EIH Ltd. shall transfer all its shares in MRL to the Government of Himachal Pradesh at a valuation to be fixed by the order of the Hon'ble Court". Learned Advocate General also submits that at present, State is not in a position to run/use the property in question and requires time in that regard to complete the tender process; In the interregnum, to ensure that the property in question, which is presently a going concern, is not wasted and there is no loss of revenue, the State is seriously deliberating for giving the possession of the property in question to claimant No.1/EIH Ltd., after the latter hands back vacant possession of the same to the State on 31.03.2025, for its use as per mutually agreed terms & conditions for a specific period of time/till the tender process is completed by the State."
4(v) The present application moved on the affidavit of the Principal Secretary (Tourism & Civil Aviation) to the Government of Himachal Pradesh is on the plank that the statement made by the learned Advocate General on 27.03.2025 that Government was agreeable for transfer of shares by claimant No. 1/EIH Ltd. after the decision of OMP Nos. 94 & 851 of 2024 was inadvertent; The State has never agreed to this.
The application does not dispute that such statement as is recorded in the order dated 27.03.2025 was infact made by the learned Advocate General. It is otherwise a matter of record that the statement attributed to learned Advocate General was made by him in the open Court proceedings on 27.03.2025. The order dated 27.03.2025 was 13 dictated in the open Court in presence of the learned Senior Counsel for the parties including Sh. Dhruv Mehta, who had attended the hearing through video conferencing, learned Advocate General who had appeared physically before the Court and Dr. Abhishek Manu Singhvi (video conferencing). Learned Advocate General attended today's hearing as well and very categorically & unambiguously stated that he as the Advocate General of the State of Himachal Pradesh was under
definitive instructions to state what is recorded in the order dated 27.03.2025. In fact, learned Advocate General states that the present application is nothing but a contempt committed by the Principal Secretary (Tourism & Civil Aviation) to the Government of H.P. as it amounts to interference in the administration of justice and is disrespectful to the Advocate General.
Besides the order dated 27.03.2025 recording the clear stance of the State of H.P. put forth by the learned Advocate General, the submissions made by learned Advocate General during today's hearing, it needs to be noticed that status of Arbitral Award dated 23.07.2005 and the orders passed in these execution petitions, in different applications filed in them, from time to time more specifically the orders dated 17.11.2023 & 05.01.2024 has not been altered under order dated 27.03.2025.
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It would also be relevant to the context to quote from Joginder Singh Wasu vs. State of Punjab2 that the office of Advocate General is an exalted office. He is the supreme law officer of the State, who is appointed in accordance with Article 165 of the Constitution of India that corresponds to Article 76 which relates to the Attorney General of India. The functions of the Advocate General are mentioned in Clause (2) of Article 165:- (i) To give advice to the Government of a State upon such legal matters as may from time to time be referred to him by the Governor;
(ii) To perform such other duties of a legal character as may from time to time be assigned to him by the Governor; (iii) To discharge the functions conferred on him by or under this Constitution; and (iv) To discharge the functions conferred on him by or under any other law for the time being in force. Under Article 177 the Advocate General is conferred the right to audience before the Legislature of a State both in the Assembly and the Council. He is treated at par with Minister. Having regard to his high position when any statement or a concession is made by him, the Courts have always accepted his statement and acted on that. A concession made by Government pleader in the trial court cannot bind the Government unless it is in writing on instructions from the responsible officer. But the same yardstick cannot be applied when the Advocate General makes a statement across the bar since the Advocate General makes the statement with all responsibility.
2 (1994) 1 SCC 184 15
5. Instant application is nothing but a misdirected & disrespectful adventure on part of the Principal Secretary (Tourism & Civil Aviation) to the Government of Himachal Pradesh that violates the defined boundaries of different offices. Learned Advocate General is the first & supreme Law Officer of the State. The statement made by the learned Advocate General as recorded in order dated 27.03.2025 is being attributed in the application as an inadvertent mistake of the learned Advocate General by the Principal Secretary (Tourism & Civil Aviation) to the Government of Himachal Pradesh. It is quite apparent that learned Advocate General was not even consulted by the Officer before swearing in affidavit in support of this application labeling the statement of learned Advocate General given in the open Court as an inadvertent mistake. Learned Advocate General reasserted his previous statement and also submitted today that further action as per his statement recorded in the order dated 27.03.2025, has been taken by the State of Himachal Pradesh. Learned Advocate General submitted that he was under
instruction of the State of Himachal Pradesh to state what has been recorded in the order dated 27.03.2025 and the present application is nothing but a contemptuous act of the Officer. Learned Advocate General has prayed for reserving his right to seek appropriate remedy including a contempt petition against the Officer. Prayer is accepted. For the foregoing reasons, this application is dismissed with cost of 50,000/-. The cost is to be paid by the Principal Secretary (Tourism & Civil Aviation) to 16 the Government of Himachal Pradesh, to the office of the learned Advocate General. Cost be deposited before the next date of hearing of the main applications. A copy of this order be brought to the notice of the Principal Secretary (Tourism & Civil Aviation) to the Government of Himachal Pradesh by Sh. Vivek Negi, learned Advocate.
Jyotsna Rewal Dua, Judge April 10 , 2025 (PK)