HC reverses order in Raheja-Wadia land row
Ferrani Hotels, a G L Raheja group company, is now free to hand over possession of constructed premises on its commercial cum residential project at Malad. HT reportsmumbai Updated: Jul 27, 2010 00:34 IST
Ferrani Hotels, a G L Raheja group company, is now free to hand over possession of constructed premises on its commercial cum residential project at Malad.
Industrialist Nusli Wadia, who owns the 155 acre plot at Malad, had filed a suit against the firm in May 2008 seeking Rs 1,370 crore as damages towards the loss caused by the alleged undervalued deals.
A division bench of the Bombay High Court on Monday stayed an order issued by a single judge bench restraining the Raheja group firm from handing over possession of the “constructed premises” without Wadia’s approval.
A division bench of Justice D K Deshmukh and Justice R P Sondur Baldota observed that the single judge’s order was contrary to provisions of the Civil Procedure Code and, therefore, could not be allowed to continue. On July 19, Justice Roshan Dalvi had passed the injunction order observing that the Raheja group firm had entered into suspicious deals with its own concerns.
Wadia was to get 12 per cent share in the total sale price by way of compensation against granting development rights of the plot to the firm.
The Rahejas had carried the matter in appeal before the division bench where its counsel, Janak Dwarkadas, argued that Justice Dalvi had granted interim relief without deciding preliminary issues about jurisdiction.
Dwarkadas pointed out though the judge had not stayed the development work and execution of deeds for sale of constructed premises, no one would buy the premises because of the uncertainty on handing over possession.
He added that the developer would be under obligation in terms of provisions of the Maharashtra Ownership of Flats Act, after sale deeds are executed.
Advocate General Ravi Kadam, appearing for Wadia, argued that the developer could not be allowed to continue with the work in view of his client's decision to terminate the development agreement with Ferrani Hotels with effect from May 12, 2008.
Kadam pointed out several companies were instituted on a single day and these companies, with funding from a Raheja family partnership firm, had executed deeds for purchase of several premises at a rate lower than the market price.
The argument, however, failed to impress the division bench. “What purpose will be served by withholding possession? What will happen if possession is handed over to purchasers?” asked Justice Deshmukh.
First Published: Jul 27, 2010 00:31 IST