M.R.SHAH,J. - (1.) 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 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: JUDGEMENT_62_LAWS(SC)4_2020_1.JPG 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(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: JUDGEMENT_62_LAWS(SC)4_2020_2.JPG JUDGEMENT_62_LAWS(SC)4_2020_3.JPG JUDGEMENT_62_LAWS(SC)4_2020_4.JPG 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. NO. PARTICULARS 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. 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 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 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. 257/2016and 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 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. 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 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.(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.;