Himachal Pradesh High Court
Eih Limited vs . State Of H.P. Alongwith Connected ... on 1 March, 2025
Author: Jyotsna Rewal Dua
Bench: Jyotsna Rewal Dua
EIH Limited vs. State of H.P. alongwith connected matter.
Ext. Pet. No. 05 of 2023 alongwith Ext. Pet. No. 19 of 2023.
01.03.2025 Present: Dr. Abhishek Manu Singhvi, Senior Advocate (through V.C.) and Mr. Rakeshwar Lall Sood, Senior Advocate with Mr. Arjun Lall, Mr. Madhav Khosla, Ms. Sneha Janakiraman (through V.C.), Ms. Priyanshu Sharma (through V.C.), Mr. Akash Thakur & Mr. Sahil Kumar, Advocates, Advocate, for the petitioners in Ext. Petition No. 5 of 2023 and for the respondents In Ext. Pet. No. 19 of 2023.
Mr. Dhruv Mehta, Senior Advocate with Mr. Vivek Negi and Prabhat Kumar, Advocates, for the petitioners in Ext. Pet. No. 19 of 2023 and for the respondents in Ext. Pet. No. 5 of 2023.
Mr. R. Shankar, President, EIH Ltd., in person. OMP Nos. 94 and 851 of 2024 in Ex. Pet. No. 19 of 2023. Sh. Dhruv Mehta, learned Senior Counsel appearing for the applicant-State has commenced his submissions on the applications.
2. During the course of hearing it was noticed that one of the prayers of the applicant-State, common in both the applications is to allow it to conduct physical verification and videography of the premises, to enable the State to prepare inventory of all the assets (tangible & intangible) standing in the name of Mashobra Resort Ltd. (MRL) and its all records and take photographs/extracts of all assets/records etc. Therefore, at the first instance, learned Senior Counsel for the parties were heard on the aforesaid prayer. 2(i). For considering the aforesaid prayer of the applicant-State it would be appropriate to briefly refer to the following operative directions in the order dated 17.11.2023 passed in Ext. Pet. No. 5 of 2023 (filed by Claimant No. 1/EIH) and Ext. Pet. No. 19 of 2023 (filed by Claimant No. 2/State):-
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"(i) Claimant No. 2 to reveal its option whether State of H.P. intends to resume the property by taking its possession in terms of the Award.
(ii) Claimant No. 1 to provide a time schedule for execution of cancellation deed for cancellation of conveyance deed dated 6.2.1997 and for further execution of lease deed in terms of the Award.
(iii) Claimant No. 1 and Claimant No. 2 will provide their respective calculations in respect of the sum(s) payable under the Award by Claimant No. 1 to Claimant No. 2 alongwith simple interest @ 18% per annum thereupon."
2(ii). Vide another order passed on 05.01.2024 in OMP No. 612 of 2023 filed by the applicant-State in its Ext. Petition No. 19 of 2023, the non-applicants/Claimant No. 1 (Execution Petitioners in Ext. Pet. No.05/2023) were directed to vacate the entire property that was subject matter of Joint Venture Agreement executed between the parties on 30.10.1995 with further direction to hand over the vacant and peaceful possession thereof to the applicant-State of Himachal Pradesh within a period of two months from the date of passing of the order. The parties were further called upon to give their preferences for appointment of reputed Chartered Accountants for settlement of the disputed accounts of the Mashobra Resorts Ltd. (MRL) in terms of the Award dated 23.07.2005 passed by the learned Arbitrator. The operative portion of the order dated 05.01.2024 goes as under:-
"28. The non-applicants/execution petitioners in Ext. Pet. No. 05 of 2023, are directed to vacate the entire property that was subject matter of JVA and handover vacant and peaceful possession thereof to the State of Himachal Pradesh within a period of two months from the date of passing of this order.-3-
29. Parties are further called upon to give their preferences for appointment of reputed chartered Accountants for settlement of disputed accounts of the MRL in terms of the award dated 23.07.2005, passed by the learned Arbitrator."
2(iii). The aforesaid orders dated 17.11.2023 & 05.01.2024 were assailed by the non-applicants before the Hon'ble Apex Court in SLP(C) No. 3969 of 2024 alongwith SLP(C) No. 3986-3988/2024. Hon'ble Apex Court declined to interfere with the impugned order. The SLP(C) was dismissed on 20.02.2024, however, non-applicants were granted time till 31.03.2025 to vacate the property and hand over its possession to the applicant-State. The order is as under:-
"Heard the learned senior counsel appearing for the petitioners.
No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petitions are, accordingly, dismissed.
Notwithstanding the dismissal of the Special Leave Petitions, we grant time till 31st March, 2025, to the petitioners to vacate the property and handover the possession thereof to the first respondent/State."
2(iv). Instant two applications were moved by the State in March and September, 2024, respectively seeking enforcement of its rights under and for executing the Award dated 23.07.2005, inter alia, keeping in view the subsequent orders passed in these proceedings.
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 -4- Counsel 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. It appears that parties have disputes about their financial obligations and rights flowing from the Award dated 23.07.2005 as confirmed by the dismissal of Arb. Case No. 60 of 2005 decided on 25.02.2016 and Arbitration Appeal No. 11 of 2016 decided on 13.10.2022 as also in terms of the orders passed in these Ext. Petitions on 17.11.2023 and 5.01.2024. Financial claims made by the applicant-State have been disputed by the non-applicants. On these aspects, hearing has commenced. Sh. Dhruv Mehta, learned Senior Counsel has opened his submissions.
Since time limit for handing over the vacant possession of the premises i.e. 31.03.2025 as set out by the Hon'ble Apex Court is approaching, therefore, prayer of the applicant-State seeking initiation of transition process assumes significance. The applicant-State is entitled for the vacant and peaceful possession of the property w.e.f. 01.04.2025, commonly called as Hotel Wildflower Hall property. Therefore, it is necessary for the State to make -5- preparation for smooth taking over and handling of operations in advance of the actual date of hand over. The submission that State has to fully know and take stock of assets and property as well as accounting and other records and also systems and processes to enable it to commence operations from 01.04.2025 has merit. In fact, this prayer has not even been opposed for the non-applicants. Their only concern is that while carrying out the joint inspection and physical stock taking of the property/assets/records etc, the applicants be directed not to be intrusive & obtrusive so as to disturb the functioning/operations of the Hotel and cause any inconvenience to its guests.
5. In view of above, pending consideration of these applications, following directions are issued:-
(i) Joint inspection and physical stock taking of the property/assets to be taken over is permitted. Joint inspection of records/documents/systems/processes of the Company/property/assets to be taken over is also permitted.
(a) Sh. Sanjay Bhagwati, District Tourism Development Officer, Shimla and Sh. Daleep Thakur, Hotel Inspector, Shimla nominated by the applicant-State for the above purpose alongwith one authorized representative of the applicant's Consultants i.e. Lamba Vij & Co. Chartered Accountants, A-1/117A, Safdarjung Enclave, New Delhi-
110029 will carry out joint inspection and physical stock taking exercise.
(b) Similarly, on behalf of the non-applicants names of Mr. Dimple Jain, Financial Controller and Mr. Sachin Garg, Deputy General Manager, Corporate Accounts have been given for joint inspection. Mr. Dimple Jain, Financial Controller and Mr. Sachin Garg, Deputy General Manager, Corporate Accounts will carry out joint inspection and -6- physical stock taking exercise on behalf of the non- applicants.
(ii) The joint inspection and physical stock taking exercise shall be carried out in terms of the arbitral Award as well as on the basis of audited closing balance sheet /fixed assets register/ records as on the closing date i.e. 31.03.2024 as also provisionally prepared balance sheet/documents as on 01.03.2025.
(iii) Joint inspection shall be carried out from 10.03.2025 to 15.03.2025 between 10 a.m. to 5 p.m. While carrying out joint inspection it shall be ensured by the inspecting team, more particularly the nominees of the applicant-State that no hindrance or disruption is caused to the working, functioning and in the operations of the hotel. Inspecting team more particularly the nominees of the applicant-State shall ensure that their exercise/actions do not impinge upon convenience and privacy of the hotel guests; and no damage is caused to the property of the hotel.
(iv) Videography of the joint inspection shall be carried out by the applicant-State.
(v) The applicant-State is permitted to seek all relevant record/documents etc. from the non-applicants. Non- applicants shall supply the requested information. The non- applicants are further directed to render full cooperation to the applicant-State during joint inspection.
As already noticed, hearing of the applications is in progress. List the matter for further consideration on 13.03.2025 as requested by the learned Senior Counsel for the parties.
Jyotsna Rewal Dua Judge.
March 01, 2025 (PK)