order of the hon'ble supreme court, dated jan 9, 2015 in the matter of saharas

8/10/2019 Order of the Hon'ble Supreme Court, dated Jan 9, 2015 in the matter of Saharas

1/11

rTEM

NO.3O1

For

peti t ioner(s)

For

Appl icant

(s)

1

couRT

NO.2

SECTTON

rVrI

peti t ioner

(s)

vERSUS

SAHARA

ftlDfA

REAL

ESTATE

CORPN.

LTD.

&ORS.

Respondent

(s)

jT""

appropriate

directi

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2 o L 4 ,

8 7 / 2 9 7 4 ,

e 6 / 2 0 L 4 ,

8 4 / 2 9 1 4

a n d

B s / 2 0 L 4

Date:

0g/oL/2015

These

rnatters

were

ca'led

on

for

hearing

today.

CORAM

s u P * t " T _

c o u R T

o E '

N D r A

RECORD

OE

PROCEEDTNGS

j ; irr{l";tJTt-' 34-36, 43-44 n coNMr.p'r. c)

No.

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HON'BIE {R. JT,STTCE T.S.

THAKUR

HON'BLE

4R.

iIUSTICE

A}IrI.

R.

DA\ZE

HoN'BLE

MR.

..'rrsrrcE

.n.

,i^._

6

in

:.n

Mr.

Shekhar

Naphade,Sr.Ad,v.

Ms.

Shubhang i

TuI i ,aar . - - - '

Mr.

Vikrarn

Sobti ,Adv.

Mr .

Arv ind

Datar rSr .Adv .

Y".

pratap

Venugopal,Ad,v.

Ms.

Surekha

RamanrAdv.

Ms.

Supriya JainrAdv.

Mr.

Ga.urav

NairrAdv.

For

M/s .

K .

J .

. fohn

&

Co.

M r .

S .

G a n e s h r S r . A d v .

Dr .

Ra j i v

Dhawan,Sr .Adv .

Mr.

Gautam

AwasthirAdv.

Mr.

Keshav

MohanrAdv.

Mr.

Aarohi

BhalJ.a,Adv.

|-vlr.

Ga.urav

Kejriwal,Ad,v.

Ms.

Amrita

HaiayanrAd,v.

Mr .

Su j i t

Keshr i ,Adv .

Mr. Raghav

Ghei,

Adv.

M r .

P . K . R a o ,

A d v .

( A .

.

)

(sEBr)

iiiffi"''

Brought to you by http://StockViz.biz


2/11

For

Respond,ent

(s)

2

Ms.

Sujata

Kurdukar,

Adv.

Mr.

Niraj

Shazma,

Adv.

UPON

hearing

the

counseL

th e

O R

Court

made

D E R

the

following

r . A s .

N o .

3 T - 3 9 :

Taken

on

Board,

By

our

order

dated

22.o7.20L4

we

had,

arr.orped

x.As

No.

10

'L2 of, 2oL4 fired

by

the

contemnors

and,

permitted

saharas

to

transf,er'

serl

0r

encumber

three

of,fshore

hotel

properties

owned

by

thern

s'bject

to

the

condition

that

the

entire

sare

conside'ration

received

by

the

sa.haras

after

repalznent

of

the

.r.oan

outstanding

towards

the

Bank

of

china

is

deposited

with

sEBr

in

compliance with

the

directions

contained

in

the

cond,it ional

bail

order

of,

this

Court

dated

26.O3.20L4.

We

had

further

directed

that

the

excess

amount,

if

any,

shall

be

deposited

by

the

saharas

in

a

sepa.rate

account

to

await

ord.ers

from

this

Court

regardiag

their

utilisation

and

that

the

sare

of

offshore

properties

sharr

not be at

a price

lesser

than

the

value

estimated

by

.BRE

and

.rtl

for

the

said.

properties

red,uced

at

the

most

by

5g

of,

such

varue.

pursuant

to

the

above

order

saharas

had

started

negotiations

with

the

parties

wirling

to

purchase

the

said

offshore

properties.

fn

the

course

of

the

said

negotiations

a

certain

r\In

principle

Agree 'ent"

rilas

ar'so

it

appears

drawn

up

but

before

the

dear

could,



3/11

3

be

finalised

difficulties

appear

to

have

arisen

on

account

of

adverse

pubricity

and

demonstration

by

a

section

of

the

p*blic

against

the

proposed

sare

of

the

properties

to

a particular

entity'

To

cut

the

long

story

short

the

proposed

sale

of

th e

property

in

terms

of

the

rn

Principle

Agreement

has

in

due

eours)

fallen

through

leaving

no

option

f,or

the

sahara.s

except

to

expJ.ore

alternative

methods

of

sale/transf,er

or

moatga.ge

of

the

said

properties

to

raise

the

requisite

amount.

ft

is

in

that

baekdrop

that

Sa,haras

have

fi led

f

.As.No.

3Z_39

in

which

among

others

they

have

sought

from

this

court

the

foll0wing

two

re l ie fs :

a)

Grant

its

permission,

whether

by

oa,sis

or

by

some

other

arty,

of,

Bank

of

china's

l0ans

to

sahara

(incruding

the

related

securities)

and

the

amendment

of

the

terms

and

conditions

appJ.icable

to

such

loans.

b)

grrant

its

permission

for

raising

of

ad.it ionar

junior

l0ans

of

up

to

us$650

mirlion

and

the

creation

of

subordinate

charges

on

the

said

3

foreign

hoter

properties

(or

on

sahara,s

sharehording

in

the

rerevant

hotel

0wning

companies)

wtren

these

rAs

carne

up

for

hearing

before

us

on

02

.L2.20L4

we

$teae

infozrned

by

u/s'

Rajeev

Dhawan

and

s.Ganesh

senior

advocates

that

in

terms

of

the

fresh

proposal

mooted,

by

sharas

the

Bank

of

china's

outstanding

roan

sharr

be

repaid

by

substi tut ing

another



4/11

4

lender

in

its

place

with

the

per:nrission

of

this

Court.

Besides

sharas

propose

to

raise

an

additional

junior

10an

for

a

sum

of

us

640 milrions

against

the

offshore

properties

mentioned

above.

M/s'

Arvind

Datar,

appearing

for

sEBr

and

shekhar

Naphade

a.s

a. n

Asricus

Curia.e

had

sought

some

time

to

examine

the

proposed

transactions

and

the

d,oeuments

relating

thereto.

They

had

also

asked

for

certain

f,urther

inforrnation

in

regrard

to

certain

aspects

bef,ore

they

rnake

their

submissions.

We

are

told

by

Mr.

Ganesh

that

queries

raised

by

the

rearned

counser

opposite

have

since

been

answered'

and

explained

in

writing

and

that

wha.t

rernains

is

only

an

apprehension

expaessed

by

M/s

Naphade

a.nd,

Datar

regarding

the

per:arissibJ.ity

of

bringing

into

rnd,ia

the

money

that

may

be

raised

towards

proposed

junior

roan

against

the

said

properties.

Mr'

Naphade

hords

the

view

that

no

arnount

borrowed.

from

outside

the

country

can

be

brought

into

rndia

with

a

view

to

repaying

any

outstanding

liability.

He

urged

that

apart

from

statutory

and

other

complieations

in

the

matter.

Sahara

may

have

to

seek

the

permission

of

the

competent

authority

in

the

Reserve

Bank

of

fndia

under

the

provisions

of

FEMA

and

the

regrulations

framed

thereunder.

on

behalf

of

saharas

it

was

argrued

by

a/s.

Dhawan

and

Ganesh

that

there

is

a

certain

amount

of

urgency

in

the

finalisation

of

the

proposed

deals

by

which

Bank

of

China

has

to

exit

upon



5/11

5

aepayment

of

the

roan

outstand.ing

towards

it,

by

arranging

funds

from

a

nelo

r-end,er

introduced

as

a

mortga.gee

of

the

properties.

They have

placed

before

us

a

comrnunicat ion

dated

05.01.2015

addressed

by

the

Bank

of

America

to

sahara

rndia

pariwar

inter

alia

stating

that

und,er

directions

from

M/s.

Mirach

Capital

Group

LLc

an

amount

of

usD

1o5o

million

remains

bl0cked

and,

earmarked.

t i l r

February

20,

2015

for

the

transaetions

being

processed,

between

Miraeh

and

sahara.

The

letter

further

states

that

Mirach

capital

Group

LLc

has

advised

Bank

of

America

to

disburse

usD

65 0

million

out

of,

the

said

unencumbered,

funds

of

usD

1o5o

million

fo r

junior

roan

traneaction

as

agreed,

between

Amby

valrey

(Mauritius)

Limited

and

Mirach

Capital

Group

L&C

after

the

execution

of

necessary

legal' 'y

binding

definitive

agreements

and

in

accord,ance

ruith

the

terms

as

mentioned

in

offer

letter

dated

Decenrber

15,

20L4

issued

by

Mirach

capitat

Group

LLc

and,

aceepted

by

Amby

valley

(Mauritius)

Limited-

The

retter

further

affir:nrs

that

Mirach

capital

Group

LLc

has

ad,vised

Bank

of

America

to

disburse

usD

400

million

out

of

the

said

unenct'nbered

funds

of

usD

1o5o

million

f,or

the

puqpose

of

making

an

investment

in

sahara

Hospitatity

r.imited

as

per

offer

Letter

dated

Decernber

15,

2015

issued

by

Mirach

capitar

Group

L&c

after

the

exeeution

of

necessaay

investnent

and

aneirriary

ag.reements.

I{trat

is

significant

is

that

according,

to

the

cormnunication

af,orementioned



6/11

6

Bank

of

America

is

ar-so

under

instructions

from

Mirach

capitar

Group

LLc

to

unbl0ck

the

said

funds

of

usD

1o5o

milr.ion

if

the

junior

loan

agrreement

for

usD

650

mirrion

and

investment

agreement

with

saha'ra

Hospitarity

r,imited

for

usD

400

mirlion

is

not

executed

by

the

nd

of

business

on

February

2oth

,

20L5.

xt

lvas

argued

that

although

funds

required

for

finalising

the

deal

between

the

cornpanies

aforementioned

have

been

blocked

up

to

February

20,

2015

keeping

in

view

the

huge

a,mount

invorved,

and

th e

fact

that

brocking

of

the

said.

amount

would

deprive

the

parties

concerned

of

the

beneficial

use

thereof,,

there

is

a gaeat

deal

0f

urgrlncy

in

f,inalising

the

transactions

which

aae

bound

to

take

some

time

before

the

same

are

clinched

by

February

20,2015,

th e

date

fixed

under

the

instructions.

As

regards

the

apprehension

expressed,

by

M/s.

Naphade

and

Datar

rega'rding

repatriation

of

the

amount

so

raised

f,rom

America

to

rndia

for

being

utilised,

in

the

manner

direeted,

by

this

court,

it

was

argrued

that

the

amount

in

guestion

wirr

first

be

credited

in

the

account

of

Ambey

Valley

(Mauritius)

Limited

whieh

is

a

wholly

owned

subsidiary

cotqpany

of

Ambey

Valty

Limited,

incorporated

r.n

fndia.

f

t

liras

a.lso

submitted

that

any

apprehension

regard,ing

misutilisation

or

diversion

of

those

fund,s

can

be

allayed

by

a

direction

f,rom

this

Court

to

the

Saharas

to

issue

specific

instructions

to

its

subsidiary

Ambey

Valley



7/11

7

(Mauritius)

r'imited

not

to

dear

with

the

said

money

or

utirise

th e

same

in

any

manner

without

the

permission

of

this

Court.

fnsofar

as the regal

impedirnents

arising

out

of

the

provisions

of

FEttA

and

other

related

regulations

governing

transfer

of

funds

from

outside

rndia

to

this

country

for

tiquidation

of

any

outstanding

riabirity

are

concerned

it

loas

argued,

that

so

rong

as

the

f,unds

remain

parked

with

Ambey

Valley

(Mauritius)

Limited

which

is

the

subsidiary

of

Ambey

valley

Limited,

the

f,unds

are

secure

against

any

misdirect ion

or

misuti l isat ion.

f

t

rira.s

submitted

that

according

to

the

petit ioner's

und.erstanding

there

liras

no

impediment

in

transferring

the

f,unds

to

fndia

as

Arnbey

Valley

(Mauritius)

r,imited

owes

an

amount

of

usD

540

mirlion

towa.rd,s

aloan which

Arnbey

valley

(Mauritius)

Limited

has

borrowed

from

it s

100t

holding

company

in

the

year

2OLO.

The

amount

available

to

Ambey

valrey

(Mauritius)

r,imited

pursuant

to

the

proposed

transa'ctions

wirl

enable

the

said

company

to

repay

the

10an

outstanding

against

i t

at

least

part ly,

i f

not

in

ful l .

Any

suchrepa'f 'ment

would

not

attract

any

statutory

or

other

bar

as

is

being

contemprated

by

the

respond,ents

or

the

learned,

Amicus

curiae.

At

any

rate

the

saharas

are

ready

to

move

the

authorities

concerned,

including

the

Reserve

Bank

of

India

at

the

appropriate

level

fo r

a

clea'r

cut

direction

that

transfer

of

money

to

rndia

pursuant

tothe

transactions

mentioned,

above

will

not

attraet

any

provision

of



8/11

I

FEI{A

oa

the

regulations

framed

thereunder.

Saharas

will

not

aLso

claim

an y

of

obtaining

such

elearance

or

It

loas

urged

that

equity

in

its

favour

in

the

matter

seeking

any

declaration

from

th e

it

place

reliance

upon

the

ord,er

i lL

oncerned

authority

nor

passed

by

this

Court

to

expressly

or

any

necessa.ry

brought

into

India

in

th e

such

movement.

suggest

that

this

Court

has

either

implication

pezmitted,

the

funds

to

be

teeth

of

any

legal

irnpediment

against

We

have

given

our

a.nxious

consideration

to

the

submissions

is

no

gainsaying

that

the

earlier

proposal

made

at

for

sale

the

bar.

There

of

the

off,

shore

hoter

properties

rnentioned

earrier

has

not

materialised.

xt

is

unnecessary

f,or

us

to go

into

the

reasons

for

the

fairure

of

the

proposed

sare

but

the

fact

remains

that

such

sare

has

not

fructif, ied.

xn

the

eircunstances

saharas

could

and

indeed

ha.ve

come

forward

with

an

alternative

proposal

which

as

nentioned

earr.ier

involves

substitution

of

the

Bank

of

china

by

another

lender

and

raising

of

a

junior

roan.

This

wirr

according

to

the

saharas

enable

them

to

raise

an

amount

that

is

suf,ficient

f ,or

Saharas

to

provide

the

balance

S,OOO/-

crores

in

cash

and

arrange

for

a

bank

guarantee

of

an

equival.ent

amount.

The

transactions

so proposed.

do

not

invorve

sare

of

the

off

shore

properties.

They

simpry

involve

an

add,itionar.

burden

in

terms

of,

creation

of

a

second,

charge

on

such

properties.

The

proposed



9/11

9

tra.nsa,ctions

have

been

critically

examined

by

for

sEBr

and

by

Mr.

Naphade,

J.ea,rned,

Amicus

this

Court

who

have

not

found

any

fault

in

the

learned

counsel

Curiae

appointed

by

this

Court

al.lowing

the

transactions

to

go

through

subject

to

the

condition

that

the

amount

so

ra'ised

can

be

brought

into

rndia

und.er

the

provisions

of

FEMA

and

regulations

concerned,.

rn

the

circumstances

therefore

and,

keeping

in

view

the

submissions

ma.de

at

the

Bar

as

also

the

safeg,uard.s

that

have

been

suggested

by

learned

counser

f,or

the

parties

we

see

no

reason

to

decline

prayers

(a)

and (b)

mad.e

in

rAs

37

and,

3g

as

extracted

in

the

earleer

part

of

this

ord,er.

We

accordingly

allow

these

appJ'ications

to

that

extent

but

subject

to

the

for.l0wing

condit ions:

1)

The

entire

amount

raised,

pursuant

to

the

proposed

transactions

ress

processing

and

other

incidental

expenses

shall

be

deposited

with

the

Ambey

Valley

(Mauritius)

Limited

with

a.

direction

from

Ambey

varry

r,td.

,

the

hording

cotqpany

that

the

former

sharl

not

utirise

the

sune

except

f,or

the

purpose

of

depositing

the

amount

with

sEBr

in

te::nrs

of

the

ord,ers

of

this

Court.

2l

saharas

wirr

approach

the

Reserve

Bank

of

rnd,ia

at

th e

appropriate

rever

with

an

appropriate

rlpresentation

to

have

a,

suitabre

clarification

issued

as

to

the

permissiblity

of

bringing



10/11

1 0

in

the

amount

that

may

be

transferred.

into

the

account

of

Arnbey

valley

(Mauritius)

Limited

in

conseqluence

of

the

transactions

perrnitted

by

this

court.

The

representation

sharl

be

made

within

one

week

from

today,

upon

receipt

whereof

the

competent

authority

rnay

rook

into

the

same

and

pass

an

appropriate

orders

and/or

issue

clarification

in

accord.a,nce

with

r_aw

as

expeditiousJ.y

as

possibre

but

prefera''y

within

a

period

of

two

weeks

from

the

date

th e

representation

is

received.

sahara.s

shalr

furnish

to

the

competent

authority

ar.

such

inf,ormation

and

docrurents

as

may

be

d.emand,ed

by

the

competent

authority

in

connection

with

the

representation.

{e

Ieave

it

open

to

the

competent

authority

to

decide

in

it s

discretion

whether

it

wourd

rike

to

afford

an

opportunity

of

being

heard

to

saharas

in

the

matter

before

issuing

any

such

clari f icat ion.

(3)

rn

the

aepresentation

as

at

(2')

a-bove

or

at

any

stage

in

the

couase

of

these

proceedings

or

any

other

paoceedings

for

that

matter

wirl

not

saharas

be

entitred

to

claim

any

equity

on

the

basis

of

this

order

in

their

favour

nor

will

it

be

suggested

that

l ire

have

by

permitting

the

proposed

transactions

presented

the

government

or

the

competent

authority

with

a

f,ait

accompri

as

regards

transfer

of

the

money

received.

pursuant

to

the

proposed

transaetions

to

fndia

is

concerned..

We

rnake

it

clear

that

we have

neither

examined'

nor

expressed

any

opinion

on

the

question

whether



11/11

the

amount

into

Xndia

to decide.

raised

can

be

which

aspect

1 1

conditionally

loe

have

left

or

fo r

unconditionally

brought

the

eompetent

authority

At

the

oral

prayer

mad,e

before

us

by

Dr.

Rajeev

Dhawanr

w

direct

that

the

facility

provided

to

the

eontemnors

by

the

jail

authori t ies

in

terms

of

our

ord,er

dated

O1.Og

.2OL4

as

continued

frorn

tine

to

time

shall

be

once

again

provided,

to

the

contemnors

by the sa id '

au thor i t ies

w.e : f .

L2 .oL

2015

up

to

20.02.2015

sub jec t

to

all

sueh

conditions

as

have

been

stipulated

in

those

ord,ers.

r 'As

No'

3?-3g

are

disposed,

of f ,

with

the

above

direct ions.

r . A .

N o . 9 0 - 9 1 ;

Mr.

Venugopal

is

permitted

to

file

an

additional

aff,idavit setting

out

the

detaiJ.s

of

the

expenditure

und,er

different

heads

and

disbursement

thereof

as

clairned

by

the

sEBr

in

terms

of

oua

ord ,er

dated

31.0g

.2OL2

and

04.06

.2OL4.

Saharas

shalr

be

free

to

f,i'e

a

reply

to

the

supplementary

aff,idavit

as

a,nd

when

the

sarne

is

f,iled.

(sHASHr

SAREEN)

COURT

MASTER

(VEENA

KHERA)

COURT

I4ASTER


order of the hon'ble supreme court, dated jan 9, 2015 in the matter of saharas

Documents