2018 (9) TMI 402 - SC - Companies Law

Properties situated in Aamby Valley City not in a position to be auctioned - no response with regard to the notice inviting tender - respondent-contemnor submitted that it has entered into negotiation with M/s. Sai Rydam Realtors Pvt. Ltd. and M/s. Prime Downtown Estates Pvt. Ltd. Mr. as rep resented by Paras Kuhad - Held that - As accepted by Mr. Kuhad that a Demand Draft amounting to ₹ 99 crores has been handed over to Mr. Pratap Venugopal, learned counsel assisting Mr. Arvind P. Datar, learned senior counsel appearing for SEBI. Be it noted, the agreed amount is ₹ 982.80 crores. He further submits that a sum of ₹ 200 crores shall be deposited in the SEBI-Sahara Refund Account on or before 24.07.2018 and another sum of ₹ 200 crores shall be deposited on or before 16.08.2018. The balance amount shall be deposited on or before 12.09.2018. Needless to say, the TDS and other applicable taxes can be deducted as per rules. Be it clarified that if the abovementioned companies violate the time limit indicated above, they shall be liable for contempt of this Court and this Court may think of sending all the Directors to jail. Needless to say, the amount deposited shall be forfeited. Once we have directed for transaction to take place, no one shall create any obstruction in the same. As far as maintenance is concerned it is submitted by Mr. Singh that the revenue generating activities should be allowed. Mr. Khambatta and Mr. Vaidyanathan, learned senior counsel appearing for the Official Liquidator / Court Receiver have no objection to this request. At this stage, another aspect needs to be noted. We have been apprised by Mr. Datar that a hotel by the name Plaza Hotel in New York has already been sold. The respondent-contemnor shall file an affidavit explaining the basis for the said sale and as to how the sale proceeds have been utilised - the Receiver and the Official Liquidator are discharged.

Summary

Issues:
1. Failure of auction of properties in Aamby Valley City.
2. Negotiations with specific companies for settlement.
3. Deposits to be made in SEBI-Sahara Refund Account.
4. Consequences for non-compliance with deposit timelines.
5. Permission for revenue-generating activities with conditions.
6. Sale of Plaza Hotel in New York and utilization of proceeds.
7. Discharge of Receiver and Official Liquidator.
8. Replenishment of expenses by SEBI and furnishing of accounts.

Analysis:
1. The judgment addresses the failure to auction properties in Aamby Valley City due to a lack of response to the notice inviting tenders. Negotiations with specific companies are mentioned, indicating a potential settlement.

2. Specific details are provided regarding the negotiated settlement, with an agreed amount of &8377; 982.80 crores. The companies involved are required to deposit &8377; 200 crores by specific dates, with a warning of contempt and jail for non-compliance.

3. Permission is granted for revenue-generating activities, subject to conditions such as account maintenance and royalty fixation. The companies are instructed to furnish the account within two weeks to the Receiver.

4. The judgment also highlights the sale of Plaza Hotel in New York, requiring the respondent to explain the sale basis and utilization of proceeds. The Receiver and Official Liquidator are discharged upon furnishing the necessary accounts.

5. SEBI is permitted to replenish expenses and is directed to pay expenses incurred by the Receiver and Liquidator, with a requirement to furnish accounts to the contemnor. The matter is scheduled for listing on a specific date for further proceedings.