Ashish Seth vs Sumit Mittal on 24 April, 2020


Supreme Court of India

Ashish Seth vs Sumit Mittal on 24 April, 2020

Author: M.R. Shah

                                        1


                                                             REPORTABLE

                         IN THE SUPREME COURT OF INDIA

                             ORIGINAL JURISDICTION

                         CONTEMPT PETITION(C) NO.34/2016
                                      IN
                         WRIT PETITION(CRIMINAL) NO.5/2015


          ASHISH SETH                          …PETITIONER

                                  VERSUS



          SUMIT MITTAL AND OTHERS           …ALLEGED CONTEMNORS

                                      WITH

                         CONTEMPT PETITION(C) NO. 257/2016
                                      IN
                         WRIT PETITION(CRIMINAL) NO.5/2015

          NARENDER SHARMA DIRECTOR OF
          M/S MAXIMAL INFRASTRUCTURE PVT. LTD.       …PETITIONER

                             VERSUS

          ASHISH SETH AND ANOTHER           …ALLEGED CONTEMNORS

                                      WITH

                         CONTEMPT PETITION(C) NO. 889/2017
                                      IN
                         WRIT PETITION(CRIMINAL) NO.5/2015
Signature Not Verified


          NARENDER SHARMA DIRECTOR OF
Digitally signed by
DEEPAK SINGH
Date: 2020.04.24

          M/S MAXIMAL INFRASTRUCTURE PVT. LTD.
16:59:03 IST
Reason:                                              …PETITIONER

                             VERSUS
                                         2




ASHISH SETH AND ANOTHER                      …ALLEGED CONTEMNORS




                                JUDGMENT

M.R. SHAH, J.

All these Contempt Petitions being Contempt Petition(C) No. 34/2016,

Contempt Petition (C) No. 257/2016 and Contempt Petition (C) No. 889/2017 are

preferred by the respective applicants who as such were parties to Writ Petition

(Criminal) No. 5 of 2015 and also parties to the Memorandum of Settlement dated

4.5.2015 which ultimately was made a part of the order passed by this Court dated

5.5.2015 disposing of Writ Petition (Criminal) No. 5/2015 and Writ Petition

(Criminal) No.11/2015, to initiate the contempt proceedings against concerned

respective respondents for non-compliance of the order passed by this Court in the

aforesaid writ petition.

2. The facts leading to the present contempt petitions in nutshell are as under:

That one Triveni Ferrous Infrastructure Private Limited (hereinafter referred

to as ‘TFIPL’) was a joint venture company constituted of two groups – one being

the Seth Group [consisting of Mr. Surrender Seth, Mr. Ashish Seth, M/s Ferrous

Forging Ltd., M/s Ferrous Alloys Forging Pvt. Ltd. (FAFPL), M/s Ferrous
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Township Pvt. Ltd. (FTPL) and M/s Ferrous Infrastructure Pvt. Ltd. (FIPL)] and

the second being the Mittal Group [consisting of Mr. Sumit Mittal and Mr. Madhur

Mittal].

2.1 That TIFPL acquired some land at Sector 70 and some 48.05 acres of land at

Sector 89, Faridabad. The said TIFPL also availed licences Nos. 34, 35 and 36

from competent authorities in the year 2007 in respect of the land bearing Sector

89 with an intent to develop the said Sector 89 land. Subsequently both the parties

being Seth Group and Mittal Group agreed that the development in the said land be

divided and carried out separately and thereupon the development rights in Sector

89 land, parcel of 48.03 acres of land belonging to TIFPL, was sold in the

following manner:

TFIPL
48.03 acres


TIDCO ORS Limited FIPL Heritage Pal
(in 5.5 acres 14.80 acres 2.8 acres Infrastructure
liquidation) (third party) (Seth Group) (third party) 10.48 acres
14.80 acres Ferrous City (third party)
(Mittal Group) Project

2.2 That certain disputes arose between both the groups in respect of the

payment of liabilities out of TFIPL which gave rise to various litigations including

Writ Petition (Criminal) No. 5/2015 and Writ Petition (Criminal) No. 11/2015. The

disputes were referred to mediation. A Memorandum of Settlement dated 4.5.2015
4

(hereinafter referred to as ‘MOS’) was executed between the Seth Group, Mittal

Group and TFIPL. The said MOS was produced before this Court in Writ Petition

(Criminal) No.5/2015and this Court disposed of the aforesaid writ petition in terms

of the MOS. Under the MOS and the order passed by this Court in the aforesaid

writ petition which was disposed of in terms of MOS dated 4.5.2015 reciprocal

obligations were to be fulfilled by both the Seth Group and the Mittal Group. The

obligations of the Seth Group were as mentioned in paragraph 1 to 4 of the

Contempt Petition No. 34/2016 and the obligations of the Mittal Group and TFIPL

were as per Clauses 5.1 to 5.9 of the contempt petition. Broadly speaking the

obligations of the Seth Group and the obligations of the Mittal Group under the

MOS and the order passed by this Court were as under:

OBLIGATIONS OF THE SETH GROUP

Sr. Particulars Amount in Rs. MoS Clause
No. (Crores) No.

1. Payment to TFIPL/Mittal 10 1.1
group towards settlement of (court deposit)
disputes
28.50 (by four
cheques

38.50 1.1.2

2. License Renewal fee to DGTCP 1.47 1.3
on behalf of TFIPL/Mittal
group

3. Bank Guarantee to secure 6.65 1.2.1
EDC

4. Bank Guarantee to secure 3.55 1.4
IDW performance
5. One time consultancy charges 0.25 19
5

for renewal of license

6. Transfer 50% shareholding of 50.00 1.5
Seth group in TFIPL at a price
of Rs.50,000/­

7. Total Financial commitment 100.42
under the MOS and complied
by the Seth Group

8. Payment of DTCP on behalf of 25.27 1.2
TFIPL towards EDC liability of On deferred
Rs.59.05 Cr of TFIPL. payment basis

Seth Group has and is and
shall always be willing to fulfill
their obligations in terms of
the MoS subject to the Mittal
Group fulfilling its obligations.

OBLIGATIONS OF MITTAL GROUP

SR. PARTICULARS MOS CLAUSE NO.

NO.

1. Board Resolution to be issued by 1.2.1 Board
TFIPL authorizing Seth Group to avail Resolution
the benefits under EDC relief policy
of 12.04.2012 or any other future
EDC relief policy announced by the
DTCP

2. General Power of Attorney to be 53 (GPA
issued by TFIPL in favour of FIPL Annexure 13)
(Seth Group) by 20.05.2015 i.e.
within 15 days of execution of MoS to
enable application for Occupancy
Certificate and Completion.

3. Bifurcation of license­ TFIPL is the 8

license holder in respect of 48.03
acres Sector 89 Land and has sold
development rights of 14.8 acres to
Seth Group –

Application was to be made within 30
days for renewal for
bifurcation/recording of beneficial
interest. Mittal Group/TFIPL along
6

with the Seth Group was to submit
the same latest by 30.10.2015

Seth Group has already applied in
terms of the renewal letter dated
01.10.2015 on 30.10.2015 and have
already made the payment towards
administrative charges to the DGTCP.

4. Renew the license till 2017 and as Clause 17 and
per undertaking on 26.10.2015 to Court order dated
renew till 2018. 26.10.2015

2.3 It is the case on behalf of the Seth Group – the petitioner in Contempt

Petition (Civil) No. 34/2016 that the Seth Group has duly complied with/fulfilled

its obligations under the said MOS and the order passed by this Court, however,

the Mittal Group has failed to comply with the same. It is the case on behalf of the

Seth Group that non-compliance of the MOS by the Mittal Group has been wilful

and intentional. It is the case on behalf of the Seth Group that the Mittal Group has

failed to comply with/fulfill the following obligations which they were required to

be complied with/fulfilled as per MOS dated 4.5.2015:

SR. PARTICULARS
NO.

1. Board Resolution to be issued by
TFIPL authorizing Seth Group to avail
the benefits under EDC relief policy
of 12.04.2012 or any other future
EDC relief policy announced by the
DTCP

2. General Power of Attorney to be
issued by TFIPL in favour of FIPL
(Seth Group) by 20.05.2015 i.e.
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within 15 days of execution of MoS to
enable application for Occupancy
Certificate and Completion.

3. Bifurcation of license­ TFIPL is the
license holder in respect of 48.03
acres Sector 89 Land and has sold
development rights of 14.8 acres to
Seth Group –

Application was to be made within 30
days for renewal for
bifurcation/recording of beneficial
interest. Mittal Group/TFIPL along
with the Seth Group was to submit
the same latest by 30.10.2015

Seth Group has already applied in
terms of the renewal letter dated
01.10.2015 on 30.10.2015 and have
already made the payment towards
administrative charges to the DGTCP.

4. Renew the license till 2017 and as
per undertaking on 26.10.2015 to
renew till 2018.

2.4 It is the case on behalf of the Seth Group that as agreed and as per clause

1.2.1 of the MOS, Board resolutions were to be passed by TFIPL authorizing the

Seth Group to avail the benefits under EDC relief policy of 12.04.2012 or any

other future EDC relief policy announced by the DTCP, which resolution is not

passed. It is the case on behalf of the Seth Group that as per clause 5.3 of the

MOS, TFIPL was required to issue General Power of Attorney in favour of FIPL

(Seth Group) by 20.05.2015, i.e., within 15 days of execution of the MOS to

enable applicants for occupation and completion certificate. It is submitted that no
8

such General Power of Attorney has been executed. It is also the case on behalf of

the Seth Group that as per clause 8 of the MOS, the licencees were required to be

bifurcated in respect of 48.03 acres Sector 89 land to the extent of 14.8 acres for

which the development rights were sold to the Seth Group. It is the case on behalf

of the Seth Group that under clause 8 of the MOS, TFIPL was required to take

steps for recording of change of beneficial interest to delineate the share of the

Seth Group in the 48.03 acres land. According to the Seth Group, policy dated

08.02.2015 required that an NOC be given by TFIPL/Mittal Group which should

have been given within 30 days of renewal of licence. It is the case on behalf of

the Seth Group that TFIPL/Mittal Group instead issued a conditional NOC dated

19.04.2016 with 22 frivolous conditions, which conditions were contrary to the

MOS and/or as per the requisite format as required by the DGTCP. It is submitted

that consequently the said NOC was rejected by the DGTCP. It is submitted

therefore that in effect, there has been no substantial compliance of the MOS

regarding issuance of NOC by TFIPL/Mittal Group till date.

2.5 It is further the case on behalf of the Seth Group that under clause 17 of the

MOS, it was the responsibility of the Mittal Group to obtain renewal of licence

granted by DTCP in respect of the entire 48.03 acres of Sector 89 land. It is the

case on behalf of the Seth Group that without any intention to actually renew the

licence and to only comply with the order on paper, the Mittal Group applied for
9

renewal of licence vide application dated 7.1.2016 without complying with any of

the conditions of renewal. It is submitted that one of the conditions by the DTCP

was the payment of EDC charges in terms of the EDC relief policy dated

12.04.2012. It is submitted that the said EDC charges were payable for the entire

license land by TFIPL and as on that date amounted to Rs.59.05 crores. It is

submitted that the Seth Group undertook to pay Rs.25.27 crores out of the total

liability of Rs.59.05 crores on behalf of TFIPL of which Rs. 9.4 crores was already

paid by the Seth Group. However, the Mittal Group failed to make payment of a

single penny to the DTCP towards EDC either of the entire 59.05 crores or of the

balance share payable after providing for 25.27 crores offered to be paid by the

Seth Group on behalf of the Mittal Group 59.05 crores. It is submitted that as a

consequence of the action/in-action of the Mittal Group, the application for

renewal of licence was rejected by the DTCP.

2.6 It is the case on behalf of the Seth Group that the Mittal Group and TFIPL

have deliberately and willfully not complied with/fulfilled their obligations under

the MOS dated 4.5.2015 and therefore they have rendered themselves liable for the

action under the provisions of the Contempt of Courts Act. It is submitted that

non-compliance is deliberate and wilful.

2.7 It appears that Director of M/s Maximal Infrastructure Private Limited has

also filed two separate contempt petitions being Contempt Petition No. 257/2016
10

and Contempt Petition No. 889/2017 against the Seth Group alleging non-

compliance of the relevant terms/clauses of the MOS.

3. It is submitted by the learned counsel appearing on behalf of the petitioner

Seth Group that Clauses 1.2.1, 12 and 3.2 of the MoS clearly contemplate that the

Seth Group’s liability as far as EDC liability of TFIPL would be limited to an

amount of Rs.25,27,92,000/- out of the total liability payable by TFIPL to DTCP

towards EDC being Rs.59.05 crores. It is submitted that immediately after

entering into the MoS, Seth Group has undisputedly paid Rs.9.40 crores against its

assumed liability of Rs.25,27,92.000/- in favour of the Chief Administrator, DTCP.

Seth Group in addition has also given a bank guarantee of Rs.6.65 crores to DTCP

towards its EDC liability. It is submitted that after paying such huge amounts by

Seth Group, the Mittal Group has not paid a single penny towards their part of the

EDC liability and did not renew the license nor did it provide GPA, Board

Resolution and/or unconditional NOC, as was required under the MoS, which was

to be given to the Seth Group. This prevented Seth Group from getting DTCP to

avail the benefit of the EDC Relief Policy and work out the payment schedule in

order to clear its share of the EDC liability. It is submitted that as on the date of

MoS, an EDC Relief Policy was in existence which allowed payment of EDC over

various installments. The bank guarantee was specifically given by the Seth

Group so that they could avail the benefits of the then existing EDC Relief Policy
11

as specifically contemplated under Clause 1.2.1 of the MoS. The Seth Group has

been prevented from availing the entitlement under the relief policy by the Mittal

Group as the Mittal Group had and till date has no intention to repay its own EDC

liability and /or to resolve the entire issue of bifurcation of Seth Group’s portion of

land, which was clearly contemplated in the MoS.

3.1 It is further submitted that violations on the part of the Mittal Group, namely,

non-renewal of license bearing nos. 34, 35 and 36 of 2007; no steps are taken by

the TFIPL to bifurcate the license; and non-issuance of GPA/NOC are deliberate

and willful and contrary to the MoS and the basic intent and purpose of entering

into the MoS which was to provide for complete severance of between the Seth

Group and the Mittal Group from TFIPL and from the development of the 48.03

acres of land. It is due to the non-compliance of the obligations by the Mittal

Group on the Seth Group and other stakeholders, the basic intent under the MoS

has not been achieved.

3.2 It is submitted on behalf of the Seth Group that the effect of the non-

compliance of the obligations by the Mittal Group on the Seth Group and other

stakeholders is as under:

I. The basic intent under the MoS was to provide for complete severance
of between the Seth Group and the Mittal Group from TFIPL and
from the development of the 48.03 acres of land, which has not been
achieved due to the defaults by the Mittal Group.

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II. The severance cannot take place without recording of change of
beneficial interest in the land, which in turn cannot be done without
renewal of the License and without complying with the conditions
stipulated by the DGTCP.

III. One of the conditions laid down by the DTCP for renewing the license
was issuance of an NOC as per the requisite format. Since the NOC
was conditional and not as per format, the renewal of license too has
been rejected and the change in beneficial interest not being
recording. This has rendered the entire settlement under the MoS as
otiose and has led to parting of huge sums of money by the Seth
Group without having the desired effect at all.
IV. The most important consequence of all this is that because of non-

renewal of license coupled with non-bifurcation of the license, the
Seth Group has been unable to handover the possession to 700 flat
owners of its Project ‘Ferrous City’ on the 14.80 acres of land falling
in its share. It has further been unable to sell and/or utilize the unsold
stock of 126 flats which can be utilized to generate funds to pay the
only remaining outstanding liabilities of the Seth Group under the
MoS.

3.3 It is submitted that in terms of Clause 5.8 of the MoS, the Mittal Group

agreed not to resign from the board of directors of TFIPL and not to transfer

majority/controlling shareholding of TFIPL till renewal of licenses. However,

perusal of the recent Balance Sheets of TFIPL shows that the said Balance Sheets

have not been signed by the Mittal brothers namely Mr. Sumit Mittal (Contemnor
13

No. 1) and Mr. Madhur Mittal (Contemnor No. 2), but has been signed by proxies

of the contemnors. This has been done in order to avoid sanctions from this Court

or any other Court.

3.4 Making the above submissions, it is prayed to issue the following directions:

(a) Direct Mr. Sumit Mittal (Contemnor No. 1) and Mr. Mathur Mattal
(Contemnor No. 2) and TFIPL to pay the entire EDC liability of
TFIPL in relation to License No. 34, 35 and 36 other than the share of
the EDC liability which the Seth Group has undertaken to pay.

(b) Declare that Seth Group’s EDC liability was only up to an amount of
Rs.25,27,92,000/- out of the total EDC liability of TFIPL, in relation
to License No. 34, 35 and 36 as on 24.3.2015 together with interest
accrued thereon from 24.03.2015. Out of this, Seth Group has
already paid Rs.9.40 crores vide DD No. 501599 dated 01.08.2016
and has also given a bank guarantee of Rs.6.65 Crores to DTCP
towards its EDC liability. Seth Group is not liable to any other EDC
payment in respect of License No. 34, 35 and 36.

(c) Direct DTCP to bifurcate the Seth Group’s portion of the land.

(d) Direct DTCP to raise a fresh demand on TFIPL for the entire
outstanding liability of TFIPL and set out the payment schedule as per
their applicable EDC relief policy.

(e) Direct Mittal Group to renew the licenses as per their obligations set
out under Clause 17, provide General Power of Attorney by TFIPL (as
per clause 5.3) Board Resolution by TFIPL for availing benefit under
EDC Relief Policy (as per Clause 1.2.1), NOC without any conditions
(as per Clause 8) to the Seth Group.

14

(f) Direct Mr. Sumit Mittal (Contemnor No. 1) and Mr. Mathur Mittal
(Contemnor No. 2) to deposit their passports in Court and list the
matter after a few weeks to determine if the Mittal Group has
complied with the orders passed by this Court.

It is submitted that the above prayers will not only resolve the various issues

between the Mittal Group and Seth Group but will also resolve the plight of

various homebuyers who are suffering because of the fraud played by the Mittal

Group who are not complying with any of their obligations under the MoS and are

conveniently resigning from the companies which are owned and controlled by

them after siphoning off moneys paid by the Seth Group to them so that they can

evade any liability.

4. Miss Meenakshi Arora, learned senior advocate appearing on behalf of the

respondent Mittal Group has submitted as under:

(i) Mittal Group/TFIPL/Maximal have not committed any breach or

disobedience of the terms and conditions of the MoS dated 04.05.2015;

(ii) The contempt petition filed by the Seth Group is a farce, motivated and a

ruse/ploy so as to create artificial/imaginary circumstances to cover up their willful

and intentional acts of omission and commission of having failed to fulfill their

obligations qua their allottees, who have invested in the project of the Seth Group,
15

part of which is incomplete and the remaining unsafe for habitation as per the

report of the Commission appointed by the RERA;

(iii) In view of the order dated 01.10.2019 passed by RERA in Complaint No.

826/2018 – “Ferrous vs. Maximal” and Complaint No. 1402 of 2018 – “Maximal

vs. Maximal”, the present contempt petition is rendered infructuous. The alleged

issues/acts of disobedience raised by Seth Group have been delineated and put to

rest by the competent authority – RERA, Haryana. RERA, Haryana has put to rest

the following issues:

        i)     No objection to LC report filed;

        ii)    Major violation in Zone A;

iii) Grant of Occupation Certificate to the Developer in 48.038 acres of

land under license No. 34-36/2007;

iv) Quantification of EDC liability and Mode and manner of payment of

EDC liability qua respective developers including that of FERROUS

project (developed by Seth Group);

        v)     Renewal of License qua each of developers;

        vi)    Condition of obtaining NOC for bifurcation of License from Licences

               i.e. MAXIMAL is no longer applicable;

vii) Direction to DTCP, Haryana to deal with flagrant deviations and

violation in the construction at the project site;
16

viii) Prohibited from offering possession.

5. With respect to the obligations of the Seth Group, it is submitted as under:

S. No. Particulars Amount Reply of contemnors
(Rs. In
Crores)

1. Payment to 38.50 Seth Group defaulted in payment of
Maximal the last instalment compelling the
contemnors to file a Contempt
Petition before this Court bearing
No. 714/2015. It is on filing of the
Contempt Petition that Seth Group
in obedience of MOS paid the last
instalment of Rs.6 Crore.

2. License fee to 1.47 It is falsely stated that Rs.1.47
DTCP, Haryana in crores was paid by Seth Group.

terms of .clause Seth Group paid Rs.93.50 lakhs
1.3 approximately, proportionate to
their share of land out of 48.038
acres situated in Sector-89,
Faridabad. Clause 1.3 relied upon
is to be read in conjunction with
clause 2 of the MOS.

3. Bank guarantee to 6.65 Seth Group in discharge of his
secure payment of obligation to pay furnished this BG,
EBC (External which is returnable to Seth Group.
Development This condition is no longer
Charges) applicable in view of the order
dated 01.10.2019 (RERA).

4. Bank guarantee to 3.55 Seth Group in discharge of his
secure IDW obligation to construct the project in
(Internal accordance with law furnished this
Development BG, which is returnable to Seth
Work) Group.

5. Consultancy fee 0.25 The license was expired since the
year 2009. There were enumerable
formalities to be completed for
17

renewal of license w.e.f. the date of
its expiry. It was unanimously
agreed to engage the services of a
third party for the renewal of the
license.

6. Transfer of 50.00 It is falsely stated that Rs.50 Crores
shareholding was paid by Seth Group to
Maximal.

Seth Group held 500 shares in
Maximal. Seth Group opted to
divert their shareholding to exit
from the Company. Mittal Group
agreed to acquire the shares and
paid consideration to Seth Group.

It is therefore misleading and
outrageous to mention that the
transferor of shares viz., Seth Group
paid any amount to the transferee
(Mittal Group).

7. Total financial 100.42 That the amount mentioned is
commitment misleading and blatantly false.

The Seth Group in lieu of land
admeasuring 66.77 acres situated in
Sector-70, Faridabad, which was
fraudulently transferred have paid
only Rs.38.50 crores to former
owner i.e. Maximal against then
market value of the said land which
is approximately Rs.300 crores.

8. Payment to DTCP, 25.27 In terms of clause 1.2 of the MOS,
Haryana Additional Document filed on
21.12.2029 (IA 197372), Seth
Group undertook to pay Rs.25.27
crores together with interest to
DTCP, Haryana on behalf of
Maximal. In view of the order
dated 01.10.2019 (RERA) this
18

condition is no longer applicable.

5.1 Now, so far as the obligations of the Mittal Group, it is submitted on behalf

of Mittal Group as under:

S. No. Particulars MOS Reply of contemnors
Clause

1. Board Resolution 1.2.1 A copy of the Board Resolution
dated 29.05.2015 was forwarded to
Seth Group. Seth Group while
acknowledging the receipt approved
the contents and sought cooperation,
if any, issue arises in the absence of
original resolution.

The original resolution is part of the
minute book and the extract thereof
was shared with Seth Group on
29.05.2015.

2. GPA to be issued 5.3 Under Clause 5.3 Additional
by TFIPL in favour Document filed on 21.12.2019 (IA
of FIPL 197372), it was agreed that TFIPL
would execute a registered GPA in
favour of FIPL. Till 29.05.2015 no
one came from FIPL to get the GPA
registered.

An email was issued dated
29.05.2015 requiring Seth Group to
furnish a Stamp Paper for GPA and
also make themselves available
before the office of Sub-Registrar.

In response to the said mail Seth
Group vide email dated 23.06.2015
informed that they do not want to
register the GPA. This was in
contravention to the agreed terms of
19

MoS.

As an abundant caution the Mittal
Group on their own took the
initiative of seeking approval of
DTCP, Haryana to execute a
registered GPA in favour of Seth
Group to enable them to deal with
their project without any
impediment.

Since the Seth Group did not come
forward for collection of the GPA
and its registration the Mittal Group
through their attorney provided Seth
Group duly executed GPA by the
executants vide letter dated
04.07.2016.

3. Bifurcation of 8 NOC was provided by the
license & Non contemnors and filed with DTCP,
grant of NOC by Haryana on 19.04.2016.
Maximal
NOC is acknowledged DTCP,
Haryana and found in order vide
note sheet dated 13.05.2016.

As per “Clause-8”, parties agreed to
jointly apply for change of
developer i.e. from TFIPL, to FIPL
in terms of the agreement dated
15.06.2007 and in terms of policy of
DTCP, Haryana dated 18.02.2015.

As per email dated 27.10.2015 the
contemnors reiterated that filing of
application is a joint obligation and
all documents to be submitted in
that regard with DTCP, Haryana are
ready, however, as per conditions of
policy the new entity was also
20

required to submit various
information, which the contemnors
were not aware much less being
shared with the said information.

Seth Group in contravention to the
joint obligation unilaterally applied
for bifurcation of license. The
application got rejected on
13.10.2016 for various reasons
including lack of technical and
financial capacity of the Seth
Group. The rejection order since
not assailed, attained finality.

Before RERA, Maximal not only
agreed to offer their cooperation for
bifurcation of license but submitted
that all formalities on the part of the
land owner/licensee be dispensed
with to expedite the same. This
contention is accepted by RERA
vide order dated 01.10.2019.

4. Renewal of license 17 Maximal in terms of order dated
26.10.2015 agreed to apply for
renewal of license on its expiry.

Maximal applied for renewal of
license on 07.01.2016 as license
was expiring on 22.01.2016.

Since there was inaction on the part
of the department, Maximal filed a
writ petition before Chandigarh
High Court for direction against the
department. While directing the
department the Writ Petition was
posted for hearing on 05.07.2016.

DTCP, Haryana vide order dated
21

04.07.2016 declined to renew the
license for non-compliance of the
conditions mentioned in “Para 3 and
4” of the order.

The conditions mentioned in “Para
3” were fully complied with as
recorded in the office note dated
25.01.2016.

However, Maximal was prevented
from filing any appeal/challenge
against the said order dated
04.07.2016, as the Seth Group
declined to pay EDC, which was a
pre-requisite condition and a ground
of rejection as mentioned in “Para-

4” of the order dated 04.07.2016.

5. Responsibility to 20 of MOS The Mittal Group and Seth Group
defend 138 were acquitted and an appeal filed
proceedings by the complainant is pending
adjudication .

The renewal of the license is as per the HUDA Act, Rules and Regulations

and not as per the requirement of the licensee. The license was initially granted on

23.01.2007 and valid up to 22.01.2009. As per then HUDA Rules, the license was

renewable for a period of one year. That as per subsequent amendment, the license

was renewable for a period of two years. In the present case, the license in

question was applied for renewal pursuant to settlement in the month of June 2015

and it got renewed by the department against payment of charges for each renewal

period. Mittal Group applied for renewal of license on 07.01.2016 for a period of
22

two years in compliance of order dated 26.10.2015. However, the license could

not be renewed for the reasons set out in tabular form Serial No. 4 hereinabove.

That as per the letter dated 27.03.2015, EDC liability was divided into two

parts:

i. Payable against 33.238 acres which includes project of 4 developers
and;

ii. Payable against 14.80 acres payable by TIDCO (Company under
Liquidation) through auction purchaser. This bifurcation and
quantification of EDC liability was accepted by OL.

Seth Group in willful defiance of the settlement did not pay the EDC. The

Seth Group influenced DTCP, Haryana to withdraw the order dated 27.03.2015 to

wriggle out of the settlement. DTCP, Haryana arbitrarily without any basis, vide

letter dated 10.01.2017 withdrew the letter dated 27.03.2015. That the appellant

authority has stayed the effect of the letter dated 10.01.2017 and the division of

liability vide letter dated 27.03.2015 is still in force and is now for all intents and

purposes confirmed by RERA vide order dated 01.10.2019. That the liability of

developer including that of the Seth Group will be determined by DTCP, Haryana

and paid to the department without the involvement of Mittal Group/Contemnors.

5.3 That as per order dated 01.10.2019 passed by RERA, the following has been

ordered:

23

(a) Bifurcation/Division of licence of all the developers of 48.038 acres
of land situated at Sector-89, Faridabad including that of Petitioner i.e.
their entity FIPL.

(b) Renewal of license for each of the developers by DTCP, Haryana on
bifurcation.

(c) Separate quantification of EDC and other statutory liabilities of each
of the developers proportionate to their share of land.

(d) Grant of occupation certificate, possession etc., as per law on removal
of all unauthorized and illegal construction to be determined by
DTCP, Haryana.

(e) All or any formality requiring involvement of Maximal has been
dispensed with.

In light of the subsequent development and order dated 01.10.2019 passed

by RERA, as such, the contempt petition is liable to be dismissed.

6. Now, so far as submission on behalf of the Seth Group as regards non-

payment of EDC to DTCP by Maximal, it is submitted that under the MoS dated

04.05.2015 there is no such condition and/or obligation on the part of the Maximal

to pay any EDC to DTCP. It is submitted that as such the same was not even the

case so prayed in the contempt petition. The contempt petition filed by the Seth

Group was limited and confined to the alleged disobedience by the Maximal as

follows:

a) Non-issuance of GPA.

24

b) Non-issuance of Board Resolution.

c) Non-issuance of NOC for bifurcation.

6.1 In fact, TFIPL/Maximal/Mittal Group in their contempt petition have

subsequently pleaded disobedience of Seth Group by not paying External

Development Charges (EDC) of license No. 34, 35 and 36 of 207 as determined by

memo dated 27.03.2015 to Rs.25.27 crores (as on 24.03.2015) together with

interest in terms of Clause 1.2.1 of the MoS and the undertaking given to this

Court.

6.3 That there is no condition and/or undertaking of Maximal to pay the

differential amount of Rs.33.78 crores in the MoS dated 04.05.2015 and thus no

mode and manner is provided in the MoS to pay the differential EDC amount i.e.

33.78 crores. This amount is payable by a separate and distinct entity TIDCO

having the beneficial interest and ownership in land proportionate to which this

amount is determined by the letter dated 27.03.2015 issued by DTCP, Haryana.

The issue regarding payment of EDC by the project developer namely viz. TIDCO

of Rs.33.78 crores (determined by letter dated 27.03.2015) being the beneficial

amount as attained finality. The Memo dated 27.03.2015 is the mother document

which defines the obligations of each of the parties and the same came into

existence by taking into consideration the MoS dated 27.03.2015. It is submitted
25

therefore that it the MoS dated 27.03.2015 is considered as non-existent, then the

MoS dated 04.05.2015 must fall.

6.4 It is submitted that even otherwise the Maximal has no financial ability to

pay any amounts. Maximal and other licensee divested of their right, title and

interest in 48.08 acres way back in the year 2007-2008. The licensees are left with

no interest in the project land. TIDCO is one of the project developers and has

beneficial interest in part of the project land. Maximal as well as the Mittal Group

have nowhere agreed to pay the amounts for and on behalf of the TIDCO being the

beneficial owner of the project land.

6.5 It is submitted that the malafides of Seth Group are apparent and writ large

from the very fact that on one hand Licensee in the larger interest are wanting

bifurcation of license in favour of Seth Group and other co-developers of the entire

land whereas the Seth Group have taken every possible course and has left no

stone unturned to negate/nullify the bifurcation of EDC Liability vide letter dated

27.03.2015 and subsequent thereto bifurcation of license vide letter dated

01.10.2015. The change of beneficial interest has been allowed by RERA vide

order dated 01.10.2019 and there is no stay of the order. It is the Seth Group who

has failed to honour their obligation under the MOS and is trying to negate both the

letters to create an artificial and imaginary alibi for not honouring their obligations
26

under the MOS dated 04.05.2015 of paying EDC liability of Rs.25.27 crores

together with interest accrued as on date.

6.6 It is submitted that as such Seth Group has not fulfilled its

obligations/conditions/undertaking and paid the amount of Rs.25,27,92,000/- and

therefore as such Seth Group is liable to be prosecuted and punished under the

Contempt of Courts Act for which the respondents – Maximal/Mittal Group have

filed the contempt petitions.

6.7 It is submitted that therefore there is non-compliance on the part of Mittal

Group, much less the willful disobedience of the MoS and the order passed by this

Court and therefore it is prayed to dismiss the contempt petition filed by Seth

Group.

7. In reply, it is submitted on behalf of Seth Group that so far as the submission

on behalf of Mittal Group in their defence that there are large-scale violations in

the construction undertaken by the Seth Group in the portion of the license to lands

falling within the Seth Group area is concerned, it is submitted that the same has

no relevance to the present contempt proceedings. What Seth Group does in its

own share of the land is not relevant for the MoS in the present proceedings. The

Mittal Group is only raising these issues in order to sidetrack the main issue that

they have been in contempt of their undertaking before this Court.
27

It is submitted that even otherwise FIPL of the Seth Group has cured its non-

compoundable violations in its construction. It is submitted that if the bifurcation

of the license had taken place, the frivolous issues raised by Mittal Group would

have been the exclusive liability of the Seth Group. It is submitted that in any case

and as submitted hereinabove, the Mittal Group has failed to fulfill its obligation

under the MoS, which subsequently became the part of the order passed by this

Court and the disobedience/non-compliance is deliberate and willful and for this

they are liable to be prosecuted and punished under the Contempt of Courts Act.

8. Heard learned counsel appearing on behalf of the respective parties at

length.

8.1 At the outset, it is required to be noted that as such the present proceedings

are filed by the respective parties to the MoS dated 04.05.2015, which

subsequently was made the order passed by this Court dated 05.05.2015 to initiate

appropriate proceedings against each other under the provisions of the Contempt of

Courts Act. It is not in dispute that all were parties to the MoS/consent order.

8.2 Before discussing the rival submissions made by the learned counsel

appearing on behalf of the respective parties, the background which ultimately led

to the MoS dated 04.05.2015 are required to be referred to and considered.

8.3 Criminal proceedings were initiated against Ashish Seth of Seth Group and

others which was the subject matter before this Court in Writ Petition (Criminal)
28

No. 5 of 2015. The disputes involved were commercial disputes. It appears that

during the course of hearing, a suggestion was given, as the controversy in the case

pertained to payment of money as alleged, that the matter be sent for mediation.

This Court, with the consent of the parties, sent the matter for mediation, subject to

Ashish Seth depositing a sum of Rs.10 Crore before this Court. That Ashish Seth

deposited the sum of Rs.10 Crore. This Court requested Mr. Justice R.V.

Ravindran, a former Judge of this Court, to mediate between the parties.

Thereafter, learned Mediator mediated and initially submitted the interim report.

The interim report of the learned Mediator reads as follows:

“This Hon’ble Court by order 09.02.2015, referred the matter to
mediation so as to enable the parties to arrive at a negotiated settlement.

In pursuance of the above, mediation meetings were held on
14.02.2015, 16.02.2015, 17.02.2015, 18.02.2015, 10.03.2015, 15.03.2015
and 17.04.2015 at New Delhi. The meetings were attended by Mr. Surender
Seth and Mr. Ashish Seth with their counsel, Mr. Sachin Puri on one side,
and Mr. Sunit Mittal and Mr. Mathur Mittal with their counsel Mr. Sanjay S.
Chhabra on the other side.

After detailed negotiations and discussions and exchange of various
alternatives, parties have arrived at a broad consensus, without prejudice to
their respective rights and contentions. Parties are further negotiating to
give shape to the terms agreed, in a manner which will effectively express
what has been agreed, and put an end to the disputes and at the same time
safeguarding their respective interests.

29

As several issues relating to legal and taxation issues require to be
sorted out with the advice of experts, the parties have not been able to
finalize the terms and execute the Memorandum of Settlement.

On the joint request of the parties, further mediation meetings are
scheduled for 11.04.2015, 12.04.2015 and 15.04.2015 for further
negotiations and finalization of the draft Memorandum of Settlement.

It is expected that the said process is likely to take at least two more
weeks and, therefore, it is respectfully submitted that the time for completion
of mediation process be extended till the end of this month.”

Thereafter, all the parties settled all the disputes and entered into the Memorandum

of Settlement dated 04.05.2015. At this stage, it is required to be noted that the

MoS dated 04.05.2015 was amongst (i) Shri Surender Seth; (ii) Shri Ashish Seth;

(iii) M/s Ferrous Forging Limited; (iv) M/s Ferrous Alloy Forging Pvt. Ltd.; (v)

M/s Ferrous Township Pvt. Ltd. And (vi) M/s Ferrous Infrastructure Pvt. Ltd. (all

belonging to Seth Group) as the first party AND (i) Shri Sumit Mittal; (ii) Shri

Madhur Mittal (belong to Mittal Group) as the second party AND M/s Triveni

Ferrous Infrastructure Pvt. Ltd. as the third party. The preamble of the MoS reads

as under:

“PREAMBLE:

WHEREAS TFIPL is an Infrastructure Development Company in which the
Seth Group represents that it holds 50% share (i.e. FFL and FAFPL have
30

33% and 17% shares respectively); and Mittal Group represents that it holds
the remaining 50% share;

WHEREAS disputes arose among the Seth Group on the one hand and the
Mittal Group on the other, with respect to lands admeasuring 37.58125 acres
and 29.1953 acres, situated at Sector 70, Faridabad (Haryana) on account of
Mittal Group claiming that the Seth Group should pay certain amounts to
TFIPL and on account of certain issues relating to management and
maintenance of statutory records and books of account of TFIPL.

WHEREAS the said disputes have given rise to the following legal
proceedings which are either pending in Courts of Law and/or are under
investigation by the Competent Authority:

(a) Company Petition bearing C.P. No. 158 (ND) of 2013 filed by FAFPL
and FFL against the TFIPL, Sumit Mittal, Madhur Mittal and others
qua the affairs of TFIPL, pending before Company Law Board, New
Delhi;

(b) Complaint Case No. 613/2014 pending before the Jurisdictional
Magistrate at Agra (U.P.) arising from FIR No. 513/2014 against
Surender Seth, Ashish Seth and others, registered at Police Station,
New Agra, Agra;

(c) FIR No. 808/2014 against Surender Seth, Ashish Seth and others,
registered with the Economic Offence Wing, New Delhi;

(d) Crl. M.C. No. 5621/2014 on the file of Hon’ble Delhi High Court
(Ashish Seth Vs. State & Another);

(e) Crl. M.C. No. 5622/2014 on the file of Hon’ble Delhi High Court
(Surender Seth Vs. State and Another);

31

(f) W.P. (Crl.) No. 5/2015 on the file of Hon’ble Supreme Court of India
(Ashish Seth Vs. Govt of NCT of Delhi & Others);

(g) W.P. (Crl.) No. 11/2015 on the file of Hon’ble Supreme Court of India
(Surender Seth Vs. Govt of NCT of Delhi & Others).

WHEREAS Criminal Case No.235/2014, filed by one Mr. Hari Mohan
Gupta (a witness in FIR No.513/2014) against Ashish Seth is pending before
the Special Judge, Agra (U.P.) and Ashish Seth has filed a petition under
Section 482 Cr.P.C. being Petition No. 134/2015, before the Hon’ble
Allahabad High Court, for quashing the said proceedings.

WHEREAS the Hon’ble Supreme Court of India in the proceedings
mentioned at Serial No. (f) and (g) above, vide Order dated 14.01.2015
referred the parties to mediation and subsequently, vide Order dated
09.02.2015 requested Justice R.V. Ravindran, former Judge of Hon’ble
Supreme Court of India to act as a Mediator to assist the parties to arrive at a
negotiated settlement;

WHEREAS after deliberations and discussions between the two groups ove
several sittings, the parties have agreed to resolve all their disputes amicable
as per the terms hereinafter set out.”

Thus, the parties entered into the MoS and agreed to resolve all their disputes

amicably. Therefore, as such, all the parties to the MoS dated 04.05.2015 are

bound to comply with the relevant terms and conditions and their respective

obligations. As per the terms of the settlement agreed between the parties, there
32

are certain obligations to be fulfilled by the respective parties, which the respective

parties are bound to fulfill and comply with in its true spirit. The obligations of

Seth Group are specifically mentioned in Clauses 1 to 1.5.1. The Seth Group has

further agreed and undertaken to perform their part of obligations with the Mittal

Group and TFIPL as mentioned in Clauses 3 to 3.14 and Clause C. Similarly, the

Mittal Group and TFIPL’s obligations, representations and warranties are also

specifically mentioned in Clause D, which are specifically mentioned in Clauses 5

to 5.9.

As agreed between the parties and in consideration of the obligations in

Clauses 1.1, 1.3 and 1.4 and on furnishing of all requisite bank guarantees as

required in terms of Clause 1.2 by the Seth Group under the MoS, all FIRs,

complaints and cases mentioned in Clause 6.1 to Clause 7 were required to be

withdrawn/quashed/cancelled/terminated. The joint obligation of the parties are

specifically mentioned in Clause F (relevant Clauses 8 & 9). As per Clause 10,

TFIPL and Mittal Group confirmed that there are no outstanding claims of Seth

Group or any of its constituents under the agreement dated 15.07.2007 in respect of

FSI admeasuring 11,28,204 Sq Ft. including FSI for EWS calculated on a total

area of 14.80 acres on the land situated in Sector 89 Faridabad under License Nos.

34, 35 and 36 of 2007 granted in the name of TFIPL and others. Clause 12 which

is an important and relevant clause reads as under:
33

“12. It is hereby confirmed that other than the payment of the EDC
amount required to be made under Clause 1.2.1 and under Clause 3.8 above,
Seth Group shall not be liable for any other EDC payment under License
Nos. 34, 35 and 36 of 2007 either on renewal and/or upon bifurcation of
License Nos. 34, 35 and 36 of 2007, except to the extent of
Rs.25,27,92,000/- together with interest accrued thereon from 24.03.2015,
imposed by DTCP, Haryana. It is further clarified that the liability to pay
EDC of Seth Group in a sum of Rs.25,27,92,000/- against the total EDC
liability of Rs.59.05 crores as on 24.03.2015, shall not be varied subject,
however, to the condition that in the event of the total liability, which has
been assessed at Rs.59.05 crores as on 23.04.2015, being revised from
Rs.59.05 crores, to any higher amount as on 24.03.2015, on account of
revised calculation or similar reason. In such eventuality, the Seth Group
will bear the proportionate increase in regard to the amount in excess of
Rs.59.05 crores.”

Clause G is specifically with respect to renewal of licenses, more particularly,

license Nos. 34, 35 and 36 of 2007. The relevant clauses with respect to renewal

of licenses are Clauses 17, 18 and 19, which read as under:

17. Mittal Group shall apply for renewal of license by 23.06.2015 subject
to compliance of clause 1.2 (to the extent of providing Bank Guarantee), 1.3
& 1.4 by the Seth Group. The Seth Group have provided
documents/undertakings with respect to the lands falling to share of the Seth
Group under Agreement dated 15.06.2007, i.e. (i) Status of
construction/allotment of EWS Flats, and (ii) Service Plan status, its
34

drawing, estimates and its approval from HUDA, Chandigarh annexed as
Annexure-16, to enable Mittal Group to apply for renewal of license. Seth
Group does not have any further document in this regard, however, it is
clarified that in case any indemnity, undertaking, letter and/or similar
document is required to be executed after filing of the application for
renewal of license, pertaining to the lands falling in the share of Seth Group
under Agreement dated 15.06.2007, Seth Group shall do the needful at the
earliest if so requested by Mittal Group.

18. On application made for renewal of license in terms of clause 17,
Mittal Group will secure renewal of license within 90 days. All
administrative and miscellaneous charges, compounding fee, penalties and
other charges levied and payable by PAL, ORS and Heritage for renewal of
license shall be paid by the Mittal Group. All such charges in respect of
FIPL agreement shall be exclusively paid/borne by Seth Group by similarly
paying to TFIPL immediately on being demanded.

19. Seth Group shall pay a sum of Rs.25,00,000/- (Twenty Five Lacs
only) to Mittal Group for hiring/engaging consultancy services for renewal
of License Nos. 34, 35 & 36 of 2007 in favour of TFIPL at the time of filing
of the application for renewal of license by the Mittal Group.”

As per Clause 27, with the execution of the said MoS and subject to

compliance of undertaking and fulfillment of all obligations of the Seth Group and

Mittal Group/TFIPL as undertaken in the MoS, it was agreed between the parties

that all pending disputes amongst the parties. shall stand resolved and TFIPL
35

and/or Mittal Group have no claim of any nature against the Seth Group and

similarly Seth Group shall have no claim of any nature against the TFIPL and/or

Mittal Group. The MoS further provides the consequences of breach/non-payment

of the amounts. The relevant clauses are Clauses 36, 37 and 38, which read as

under:

“36. In the event of any default by Seth Group of their obligations and
warranties, the Mittal Group and TFIPL will be entitled to initiate legal
proceeding for enforcing performance of the obligations/warranties given by
Seth Group, including initiation of contempt proceedings against the Seth
Group in accordance with law.

37. In case there is a default in payment as agreed in Clause Nos. 1.1, 1.3
& 1.4 of furnishing of all requisite Bank Guarantees as required in terms of
clause 1.2 by the Seth Group, the Mittal Group and TFIPL will also be
entitled to approach the Hon’ble Supreme Court for revival of the
complaints/FIRs stated at serial Nos. (b) & (c) of the list of cases mentioned
in the preamble above. Provided however, on Mittal Group and TFIPL
obtaining performance of the obligations, the revised criminal proceedings
and contempt proceedings, if any, shall be terminated.

38. In the event of any default by Mittal Group of their obligations and
warranties, the Seth Group will be entitled to initiate legal proceeding for
enforcing performance of the obligations/warranties given by the Mittal
Group, including initiation of contempt proceedings against the Mittal
Group in accordance with law.”
36

This MoS was placed before this Court in the aforesaid Writ Petition and this

Court recorded the settlement in entirety and as agreed between the parties and as

prayed, the MoS dated 04.05.2015 became a part of the order and this Court

directed the parties to adhere to the terms and conditions of the settlement and the

undertakings given therein. This Court specifically further observed that every

facet of it shall tantamount to an order of this Court and in case of failure the

parties shall be at liberty to move this Court for an appropriate direction. Thus, as

per the MoS and even as per the order passed by this Court dated 05.05.2015, all

the parties to the MoS shall have to comply with and/or fulfill their respective

obligations as mentioned in the MoS dated 04.05.2015. As observed hereinabove,

the disputes were commercial disputes and therefore all the parties to the disputes

agreed to resolve all their disputes, which culminated into the MoS and thereafter

the order passed by this Court.

9. The entire object and purpose of entering into the settlement was to resolve

all the disputes between the parties. Therefore, it is the duty of the Court that the

settlement entered into between the parties and the consent order passed by this

Court should be given effect to in its letter and spirit. All the parties to the consent

terms are required to fully comply with the terms of settlement/consent terms and

the consent order. One party cannot be permitted to say that that portion of the
37

settlement which is in their favour be executed and/or complied with and not the

other terms of the settlement/consent terms/consent order.

9.1 From the facts narrated hereinabove and even otherwise considering the

relevant clauses of the MoS and the obligations to be fulfilled by the respective

parties to the MoS, it appears that Seth Group have fully complied with their

obligations, except deposit of the total amount of Rs.25.27 crores – payment to

DTCP towards initial liability of Rs.59.05 crores of TFIPL. It appears that Seth

Group have already paid Rs.9.40 crores against the total libaiility of Rs.25.27

crores towards EDC liability against the total liability of Rs.59.05 crores of TFIPL

as per Clause 1.2. It appears that the balance amount is not deposited by the Seth

Group as the Mittal Group have not fulfilled their obligations under the MoS. It is

stated at the bar that the Seth Group is always ready and willing to fulfill their

obligations in terms of the MoS, i.e. their liability as per Clause 1.2, subject to

Mittal Group fulfill its obligations. From the material on record, it appears that

the Mittal Group have not fulfilled their obligations as per Clause 1.2, Clause 5.3

and Clause 8. Neither the Mittal Group nor TFIPL have deposited the balance

amount to be paid towards EDC liability of Rs.59.05 crores (deducting Rs.25.27

crores to be paid by the Seth Group as per Clause 1.2). It is the case on behalf of

the Mittal Group that it is the liability of the TIDCO and not the Mittal Group and

in the MoS there is no specific term and the obligation that the said amount is to be
38

paid by the Mittal Group. It is required to be noted that all the terms and

conditions/obligations of the Seth Group, Mittal Group and TFIPL are required to

be read conjointly. The license Nos. 34, 35 and 36 of 2007 are required to be

transferred in favour of Seth Group. It appears that TFIPL acquired some land at

Sector 70 and some 48.03 acres of land at Sector 89, Faridabad. TFIPL also

availed licenses Nos. 34, 35 and 36 from the competent authorities in the year 2007

in respect of land bearing at Sector 89 with an intent to develop the Sector 89 land.

Subsequently, however , both the parties – Seth Group and Mittal Group agreed

that it would be the best that the development of the said land be divided and

carried out separately and thereupon the development rights in the Sector 89 land

parcel of 48.03 acres of land belonging to TFIPL was sold in the manner

mentioned as under:

TFIPL
48.03 acres


TIDCO ORS Limited FIPL Heritage Pal
(in 5.5 acres 14.80 acres 2.8 acres Infrastructure
liquidation) (third party) (Seth Group) (third party) 10.48 acres
14.80 acres Ferrous City (third party)
(Mittal Group) Project
39

The liability of Rs.59.05 crores was with respect to the entire land – 48.03 acres at

Sector 89, Faridabad. Therefore, the liability of the Seth Group would be with

respect to their share out of 48.03 acres which, as agreed between the parties,

would come to Rs.25.27 crores and therefore the balance is naturally required to be

paid by Mittal Group/TFIPL. Unless and until the entire amount is deposited

with the DTCP towards EDC, the aforesaid licenses cannot be renewed and after

renewal they are required to be bifurcated and transferred. As the Mittal Group

has refused to deposit the balance amount of EDC (after deducting Rs.25.27 crores

which is the liability of Seth Group as per Clause 1.2), the licenses are not being

renewed thereafter. If the contention and the submission on behalf of the Mittal

Group is accepted, in that case, the entire MoS would be unworkable and the

purpose and object of the MoS to resolve all the disputes would be frustrated. As

the Mittal Group has not fulfilled its obligations it appears that the Seth Group has

not deposited the balance amount of EDC liability. At this stage, it is required to

be noted that as per Clause 5.8 Mittal Group shall not resign from the Board of

Directors of TFIPL and shall not transfer majority/controlling shareholding in

TFIPL till renewal of licenses. As per the case of Seth Group, Mittal Group have

retired from the Directorship of TFIPL and the balance sheet since then is being

signed by the proxies.

40

9.2 As observed hereinabove, as per the MoS dated 04.05.2015 and even as per

the order passed by this Court 05.05.2015, all the parties to the MoS are bound to

fulfill their respective obligations. As observed hereinabove, Seth Group have

fulfilled their obligations, except the payment of DTCP i.e. Rs.25.27 crores as per

Clause 1.2 of the MoS (except Rs.9.49 crores which is paid).

10. Having heard the learned counsel for the respective parties and considering

the material on record, we are of the opinion that the respondent Mittal Group in

Contempt Petition No. 34 of 2016 have deliberately and willfully not fulfilled their

obligations which they are required to fulfill under the MoS dated 04.05.2015 and

as such they have rendered themselves liable for the action under the Contempt of

Courts Act. However, before taking any further action, we propose to give further

two months’ time to the respondents, namely, Shri Sumit Mittal, Shri Mathur

Mittal and TFIPL to fulfill their part of obligations under the MoS dated

04.05.2015, more particularly,

(i) To pay the entire EDC liability of TFIPL with interest in relation to license Nos.

34, 35 and 36 other than the share of the EDC liability which the Seth Group has

undertaken to pay as per Clause 1.2 of the MoS;

(ii) As per Clause 1.2, EDC liability of the Seth Group is to the extent of

Rs.25,27,92,000/-, out of the total EDC liability of TFIPL in relation License Nos.

34, 35 and 36 as on 24.03.2015 together with interest accrued thereon from
41

24.03.2015. Therefore, the Seth Group shall make the entire payment of

Rs.25,27,92,000/- along with the interest accrued thereon from 24.03.2015 towards

their EDC liability in respect of License Nos. 34, 35 and 36 of 2007;

(iii) The Mittal Group is hereby further directed to renew the license Nos. 34, 35

and 36 of 2007; to execute GPA by TFIPL (as per Clause 5.3), Board Resolution by

TFIPL for availing benefit under EDC Relief Policy (as per Clause 1.2.1), NOC

without any conditions (as per Clause 8) to the Seth Group.

(iv) Thereafter, the DTCP to bifurcate the Seth Group’s portion of the land in

accordance with law and as per the policy and/or the rules and regulations, if any.

It is also observed that it will be open to the respective parties to avail the benefit

of the applicable EDC Relief Policy, which may be considered by the DTCP in

accordance with the applicable EDC Relief Policy, if any.

10.1 The aforesaid entire exercise shall be completed within a period of two

months from the date of lifting of lockdown in the concerned area, failing which,

as observed hereinabove, this Court shall proceed to pass appropriate further

order/orders under the Contempt of Courts Act for non-fulfillment of the

obligations by the respondents – Shri Sumit Mittal, Shri Madhur Mittal and TFIPL.

As observed hereinabove, this Court has deferred to pass further orders against the

contemnors – Mittal Group and TFIPL to enable them to give them further

opportunity.

42

11. In view of the above discussion and for the reasons stated above, we see no

substance in Contempt Petition (C) No. 257 of 2016 and Contempt Petition (C) No.

889 of 2017 filed by the Mittal Group against the Seth Group. Under the

circumstances, Contempt Petition (C) No. 257 of 2016 and Contempt Petition (C)

No. 889 of 2017 deserve to be dismissed and are accordingly dismissed. List

Contempt Petition (C) No.34/2016 in Writ Petition (Crl.) No. 5 of 2015 before this

Bench immediately after three months.

……………………….J.

(ASHOK BHUSHAN)

……………………….J.

(M. R. SHAH)
New Delhi;

April 24, 2020



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