In a major setback for Raheja Universal Ltd, the supreme court recently upheld an order issued by the Board for Industrial Financial Restructuring (BIFR) putting on hold the developer’s deal for purchasing 344 acre of NRC Ltd land at Kalyan for Rs166.4 crore.
In April 2006, Raheja had entered into an agreement with NRC — erstwhile National Rayon Corporation Ltd — for purchasing the company’s surplus land at Kalyan, with the developer paying the first installment of Rs25 crore.
In December 2008, NRC approached BIFR seeking declaration that the company is a sick industrial unit, and approval for its financial restructuring with the help of the money generated the Raheja deal under the Sick Industrial Companies (Special Provisions) Act of 1985.
In July 2009, the BIFR held that sale of any asset, including the 344 acre surplus land, requires prior approval of the board. Taking exception to the order, both NRC and Raheja moved in appeal before the Appellate Authority for Industrial and Financial Restructuring (AAIFR), which in May 2010, reversed the BIFR order and allowed the company to go ahead with the land deal.
AAIFR, however, granted the liberty with a rider — the sale was subject to pre-payment of balance amount of Rs125.44 crore for setting off labour dues, which the workers had been demanding. Both the parties then carried the matter to Bombay high court, where the labour union, NRC Mazdoor Sangh, also jumped into the fray.
In July 2011, the high court set aside the AAIFR order and permitted the sale subject to final orders of BIFR. Raheja challenged the high court order before the apex court, where a bench of chief justice of India SH Kapadia, and justices KS Radhakrishnan and Swatanter Kumar found nothing wrong in either the BIFR or the high court order.