ASHISH SETH versus SUMIT MITTAL AND OTHERS on 10 April 2020

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[2020] 9 S.C.R. 412

SUPREME COURT REPORTS

[2020] 9 S.C.R.

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ASHISH SETH

v.

SUMIT MITTAL AND OTHERS

(Contempt Petition (C) No. 34/2016)

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IN

(Writ Petition (Criminal) No.5/2015)

APRIL 24, 2020

[ASHOK BHUSHAN AND M. R. SHAH, JJ.]

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Contempt of Court – Dispute in the instant case was betweenthe two groups of a Joint Venture (JV) Company – Seth Group andMittal Group – The JV Company had acquired some land includingSector 89, Faridabad and also availed licences from competentauthorities with an intent to develop Sector 89 land – Subsequently,Dboth the groups agreed that development in the said land be dividedand carried out separately and thereupon the development rightsin Sector 89 were sold – Dispute arose between both the groups inrespect of payment of liabilities out of the JV Company which gaverise to various litigations including Writ Petition 5/2015 and 11/2015 – Dispute was referred to arbitration – Memorandum ofESettlement (MoS) dated 04.05.2015 was executed between the SethGroup, Mittal Group and JV Company whereunder both the groupswere to fulfill the reciprocal obligations – Writ Petition 5/2015 wasdisposed of in terms of MoS dated 04.05.2015 – In the ContemptPetitions filed by Seth Group, the grievance of Seth Group was thatFMittal Group failed to comply with the obligations under the MoSand the order passed by the Court and the non-compliance waswilful and intentional – Held: In view of the relevant clauses of theMoS and the obligations to be fulfilled by the respective parties tothe MoS, Seth Group fully complied with their obligations, exceptdeposit of the total amount of Rs.25.27 crores - payment to DTCPGtowards initial liability of Rs.59.05 crores of JV Company – SethGroup already paid Rs.9.40 crores against the liability of Rs.25.27crores towards EDC liability against the total liability of Rs.59.05crores of JV Company as per Clause 1.2 – The balance amount wasnot deposited by the Seth Group as the Mittal Group had not fulfilledH

their obligations under the MoS – The material on record showedthat the Mittal Group did not fulfill their obligations as per Clause1.2, Clause 5.3 and Clause 8 – Neither the Mittal Group nor JVCompany deposit the balance amount to be paid towards EDCliability of Rs.59.05 crores (deducting Rs.25.27 crores to be paidby the Seth Group) – Mittal Group in Contempt Petition No. 34 of2016 deliberately and willfully did not fulfill their obligations underthe MoS dated 04.05.2015 and as such they rendered themselvesliable for action under the Contempt of Courts Act – However,further two months’ time is given to the respondents to fulfill theirpart of obligations under the MoS dated 04.05.2015 failing which,proceedings under the Contempt of Courts Act would be initiated.

Listing Contempt Petition (C) No.34/2016 in Writ Petition(Crl.) No. 5 of 2015 after three months while dismissing ContemptPetition (C) Nos. 257 of 2016 and No. 889 of 2017, the Court

Conclusion

HELD: 1. The relevant clauses of the MoS and theobligations to be fulfilled by the respective parties to the MoSshowed that Seth Group have fully complied with their obligations,except deposit of the total amount of Rs.25.27 crores - paymentto DTCP towards initial liability of Rs.59.05 crores of TFIPL.Seth Group have already paid Rs.9.40 crores against the totalliability of Rs.25.27 crores towards EDC liability against the totalliability of Rs.59.05 crores of JV Company. The balance amountis not deposited by the Seth Group as the Mittal Group have notfulfilled their obligations under the MoS. It is stated at the barthat the Seth Group is always ready and willing to fulfill theirobligations in terms of the MoS, i.e. their liability as per Clause1.2, subject to Mittal Group fulfill its obligations. The materialon record showed that the Mittal Group have not fulfilled theirobligations as per Clause 1.2, Clause 5.3 and Clause 8. Neitherthe Mittal Group nor TFIPL have deposited the balance amountto be paid towards EDC liability of Rs.59.05 crores (deductingRs.25.27 crores to be paid by the Seth Group as per Clause 1.2).It is the case on behalf of the Mittal Group that in the MoS thereis no specific term and the obligation that the said amount is tobe paid by the Mittal Group. [Para 9.1][438-G-H; 439-A-C]

2. The liability of Rs.59.05 crores was with respect to theentire land – 48.03 acres at Sector 89, Faridabad. Therefore, the AB

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Aliability of the Seth Group would be with respect to their shareout of 48.03 acres which, as agreed between the parties, wouldcome to Rs.25.27 crores and therefore the balance was requiredto be paid by Mittal Group/JV Company. Unless and until theentire amount is deposited with the DTCP towards EDC, theaforesaid licenses cannot be renewed and after renewal they areBrequired to be bifurcated and transferred. As the Mittal Grouphas refused to deposit the balance amount of EDC (after deductingRs.25.27 crores which is the liability of Seth Group as per Clause1.2), the licenses are not being renewed thereafter. If thecontention and the submission on behalf of the Mittal Group isCaccepted, in that case, the entire MoS would be unworkable andthe purpose and object of the MoS to resolve all the disputeswould be frustrated. As the Mittal Group has not fulfilled itsobligations it appears that the Seth Group has not deposited thebalance amount of EDC liability. At this stage, it is required to benoted that as per Clause 5.8 Mittal Group shall not resign fromDthe Board of Directors of JV Company and shall not transfermajority/controlling shareholding in TFIPL till renewal of licenses.As per the case of Seth Group, Mittal Group have retired fromthe Directorship of TFIPL and the balance sheet since then isbeing signed by the proxies. [Para 9.2][439-G-H; 440-A-D]

E3. As per MoS dated 04.05.2015 and even as per the orderpassed by this Court 05.05.2015, all the parties to the MoS arebound to fulfill their respective obligations. Seth Group havefulfilled their obligations, except the payment of DTCP i.e.Rs.25.27 crores as per Clause 1.2 of the MoS (except Rs.9.49

Fcrores which is paid). The respondent Mittal Group in ContemptPetition No. 34 of 2016 have deliberately and willfully not fulfilledtheir obligations which they are required to fulfill under the MoSdated 04.05.2015 and as such they have rendered themselvesliable for the action under the Contempt of Courts Act. However,

before taking any action, further two months’ time is given to theGrespondents to fulfill their part of obligations under the MoS dated04.05.2015, more particularly, (i) To pay the entire EDC liabilityof TFIPL with interest in relation to license Nos. 34, 35 and 36other than the share of the EDC liability which the Seth Grouphas undertaken to pay as per Clause 1.2 of the MoS; (ii) As perHClause 1.2, EDC liability of the Seth Group is to the extent of Rs.25.27 crores, out of the total EDC liability of TFIPL in relationLicense Nos. 34, 35 and 36 as on 24.03.2015 together withinterest accrued thereon from 24.03.2015. Therefore, the SethGroup shall make the entire payment of Rs.25.27 crores towardstheir EDC liability in respect of License Nos. 34, 35 and 36 of2007; (iii) The Mittal Group is further directed to renew thelicense Nos. 34, 35 and 36 of 2007; to execute GPA by JVCompany (as per Clause 5.3), Board Resolution by TFIPL foravailing benefit under EDC Relief Policy (as per Clause 1.2.1),NOC without any conditions (as per Clause 8) to the Seth Group.(iv) Thereafter, the DTCP to bifurcate the Seth Group’s portionof the land in accordance with law and as per the policy and/or therules and regulations, if any. It will be open to the respectiveparties to avail the benefit of the applicable EDC Relief Policy,which may be considered by the DTCP in accordance with theapplicable EDC Relief Policy, if any. The aforesaid entire exerciseshall be completed within a period of two months from the date oflifting of lockdown in the concerned area, failing which, this Courtshall proceed to pass appropriate further order/orders under theContempt of Courts Act for non-fulfillment of the obligations bythe respondents. [Paras 9.2, 10, 10.1][440-E-H; 441-A-E]

INHERENT JURISDICTION: Contempt Petition (C) No. 34 of2016 in Writ Petition (Crl.) No. 5 of 2015.

Under Article 32 of the Constitution of India With Contempt Petition (C) No.257/2016 In Writ Petition (Crl.) No.5/2015

Contempt Petition (C) No.889/2017 In Writ Petition (Crl.) No.5/2015

Anil Grover, AAG, Ms. Meenakshi Arora, Ms. Vibha DattaMakhija, Sr. Advs., Abhimanyu Bhandari, Ms. Nattasha Garg, RamKaushik, Kaushlendra Singh, Ms. Namitha Mathews, Rajnish Singh,Ms. Aashima Singhal, Piyush Kant Roy, Pulkit Malhotra, Mrs. PriyaPuri, Akshay Girish Ringe, Sanjay S. Chhabra, Deepak Agarwal, Ms.Vijay Laxmi, Ms. Swati Tiwari, Ms. Garima Prashad, T.A. Khan, PraveenGaur, Ms. Priyanshi Agarwal, B.V. Balram Das, Ms. Noopur Singhal,Satish Kumar, Sanjay Kumar Visen, Abhishek, Govind Goel, Ankit Goel, ABC

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AR.K. Gupta, Ayush Sharma, Akhilesh Kumar Pandey, P. N. Gupta, GauravGoel, Rahul Sharma, Ashish Gautam, Snehal Sandil, Bankey Bihari,Birendra Bikram, Sachin Mittal, Advs. for the appearing parties.

The Judgment of the Court was delivered by BM. 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 assuch were parties to Writ Petition (Criminal) No. 5 of 2015 and alsoCparties to the Memorandum of Settlement dated 4.5.2015 whichultimately was made a part of the order passed by this Court dated5.5.2015 disposing of Writ Petition (Criminal) No. 5/2015 and Writ Petition(Criminal) No.11/2015, to initiate the contempt proceedings againstconcerned respective respondents for non-compliance of the order passedby this Court in the aforesaid writ petition.D

2. The facts leading to the present contempt petitions in nutshellare as under:

2. The facts leading to the present contempt petitions in nutshellare as under:

That one Triveni Ferrous Infrastructure Private Limited(hereinafter referred to as ‘TFIPL’) was a joint venture companyEconstituted of two groups – one being the Seth Group [consisting of Mr.Surrender Seth, Mr. Ashish Seth, M/s Ferrous Forging Ltd., M/s FerrousAlloys Forging Pvt. Ltd. (FAFPL), M/s Ferrous Township Pvt. Ltd.(FTPL) and M/s Ferrous Infrastructure Pvt. Ltd. (FIPL)] and the secondbeing the Mittal Group [consisting of Mr. Sumit Mittal and Mr. MadhurFMittal].

2.1 That TIFPL acquired some land at Sector 70 and some 48.05acres of land at Sector 89, Faridabad. The said TIFPL also availed licencesNos. 34, 35 and 36 from competent authorities in the year 2007 in respectof the land bearing Sector 89 with an intent to develop the said Sector 89Gland. Subsequently both the parties being Seth Group and Mittal Groupagreed that the development in the said land be divided and carried outseparately and thereupon the development rights in Sector 89 land, parcelof 48.03 acres of land belonging to TIFPL, was sold in the followingmanner:

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TFIPL48.03 acres

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2.2 That certain disputes arose between both the groups in respectof the payment of liabilities out of TFIPL which gave rise to variouslitigations including Writ Petition (Criminal) No. 5/2015 and Writ Petition(Criminal) No. 11/2015. The disputes were referred to mediation. AMemorandum 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.5/2015 and this Court disposed of the aforesaid writ petition in termsof the MOS. Under the MOS and the order passed by this Court in theaforesaid writ petition which was disposed of in terms of MOS dated4.5.2015 reciprocal obligations were to be fulfilled by both the Seth Groupand the Mittal Group. The obligations of the Seth Group were asmentioned in paragraph 1 to 4 of the Contempt Petition No. 34/2016 andthe obligations of the Mittal Group and TFIPL were as per Clauses 5.1to 5.9 of the contempt petition. Broadly speaking the obligations of theSeth Group and the obligations of the Mittal Group under the MOS andthe order passed by this Court were as under:

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OBLIGATIONS OF THE SETH GROUP

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418SUPREME COURT REPORTS[2020] 9 S.C.R.

2.3 It is the case on behalf of the Seth Group – the petitioner inContempt Petition (Civil) No. 34/2016 that the Seth Group has dulycomplied with/fulfilled its obligations under the said MOS and the orderGpassed by this Court, however, the Mittal Group has failed to complywith 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 andintentional. It is the case on behalf of the Seth Group that the MittalGroup has failed to comply with/fulfill the following obligations whichthey were required to be complied with/fulfilled as per MOS datedH4.5.2015:

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ASHISH SETH v. SUMIT MITTAL AND OTHERS[M. R. SHAH, J.]

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2.4 It is the case on behalf of the Seth Group that as agreed andas per clause 1.2.1 of the MOS, Board resolutions were to be passed byTFIPL authorizing the Seth Group to avail the benefits under EDC reliefpolicy of 12.04.2012 or any other future EDC relief policy announced bythe DTCP, which resolution is not passed. It is the case on behalf of theSeth Group that as per clause 5.3 of the MOS, TFIPL was required toissue General Power of Attorney in favour of FIPL (Seth Group) by20.05.2015, i.e., within 15 days of execution of the MOS to enableapplicants for occupation and completion certificate. It is submitted thatno such General Power of Attorney has been executed. It is also thecase on behalf of the Seth Group that as per clause 8 of the MOS, thelicencees were required to be bifurcated in respect of 48.03 acres Sector89 land to the extent of 14.8 acres for which the development rightswere sold to the Seth Group. It is the case on behalf of the Seth Groupthat under clause 8 of the MOS, TFIPL was required to take steps forrecording of change of beneficial interest to delineate the share of theSeth Group in the 48.03 acres land. According to the Seth Group, policy H

Adated 08.02.2015 required that an NOC be given by TFIPL/Mittal Groupwhich should have been given within 30 days of renewal of licence. It isthe case on behalf of the Seth Group that TFIPL/Mittal Group insteadissued a conditional NOC dated 19.04.2016 with 22 frivolous conditions,which conditions were contrary to the MOS and/or as per the requisiteformat as required by the DGTCP. It is submitted that consequently theBsaid NOC was rejected by the DGTCP. It is submitted therefore that ineffect, there has been no substantial compliance of the MOS regardingissuance of NOC by TFIPL/Mittal Group till date.

2.5 It is further the case on behalf of the Seth Group that underclause 17 of the MOS, it was the responsibility of the Mittal Group toCobtain renewal of licence granted by DTCP in respect of the entire48.03 acres of Sector 89 land. It is the case on behalf of the Seth Groupthat without any intention to actually renew the licence and to only complywith the order on paper, the Mittal Group applied for renewal of licencevide application dated 7.1.2016 without complying with any of theDconditions of renewal. It is submitted that one of the conditions by theDTCP was the payment of EDC charges in terms of the EDC reliefpolicy dated 12.04.2012. It is submitted that the said EDC charges werepayable for the entire license land by TFIPL and as on that date amountedto Rs.59.05 crores. It is submitted that the Seth Group undertook to payRs.25.27 crores out of the total liability of Rs.59.05 crores on behalf ofETFIPL 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 tothe DTCP towards EDC either of the entire 59.05 crores or of the balanceshare payable after providing for 25.27 crores offered to be paid by theSeth Group on behalf of the Mittal Group 59.05 crores. It is submittedFthat as a consequence of the action/in-action of the Mittal Group, theapplication for renewal of licence was rejected by the DTCP.

2.6 It is the case on behalf of the Seth Group that the MittalGroup and TFIPL have deliberately and willfully not complied with/fulfilledtheir obligations under the MOS dated 4.5.2015 and therefore they haveGrendered themselves liable for the action under the provisions of theContempt of Courts Act. It is submitted that non-compliance is deliberateand wilful.

2.7 It appears that Director of M/s Maximal Infrastructure PrivateLimited has also filed two separate contempt petitions being ContemptHPetition No. 257/2016 and Contempt Petition No. 889/2017 against the Seth Group alleging non-compliance of the relevant terms/clauses of theMOS.

3. It is submitted by the learned counsel appearing on behalf ofthe petitioner Seth Group that Clauses 1.2.1, 12 and 3.2 of the MoSclearly contemplate that the Seth Group’s liability as far as EDC liabilityof TFIPL would be limited to an amount of Rs.25,27,92,000/- out of thetotal liability payable by TFIPL to DTCP towards EDC being Rs.59.05crores. It is submitted that immediately after entering into the MoS, SethGroup has undisputedly paid Rs.9.40 crores against its assumed liabilityof Rs.25,27,92.000/- in favour of the Chief Administrator, DTCP. SethGroup in addition has also given a bank guarantee of Rs.6.65 crores toDTCP towards its EDC liability. It is submitted that after paying suchhuge amounts by Seth Group, the Mittal Group has not paid a singlepenny towards their part of the EDC liability and did not renew thelicense nor did it provide GPA, Board Resolution and/or unconditionalNOC, as was required under the MoS, which was to be given to theSeth Group. This prevented Seth Group from getting DTCP to avail thebenefit of the EDC Relief Policy and work out the payment schedule inorder to clear its share of the EDC liability. It is submitted that as on thedate of MoS, an EDC Relief Policy was in existence which allowedpayment of EDC over various installments. The bank guarantee wasspecifically given by the Seth Group so that they could avail the benefitsof the then existing EDC Relief Policy as specifically contemplated underClause 1.2.1 of the MoS. The Seth Group has been prevented fromavailing the entitlement under the relief policy by the Mittal Group as theMittal Group had and till date has no intention to repay its own EDCliability and /or to resolve the entire issue of bifurcation of Seth Group’sportion of land, which was clearly contemplated in the MoS.

3.1 It is further submitted that violations on the part of the MittalGroup, namely, non-renewal of license bearing nos. 34, 35 and 36 of2007; no steps are taken by the TFIPL to bifurcate the license; and non-issuance of GPA/NOC are deliberate and willful and contrary to theMoS and the basic intent and purpose of entering into the MoS whichwas to provide for complete severance of between the Seth Group andthe Mittal Group from TFIPL and from the development of the 48.03acres of land. It is due to the non-compliance of the obligations by theMittal Group on the Seth Group and other stakeholders, the basic intentunder the MoS has not been achieved.

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A3.2 It is submitted on behalf of the Seth Group that the effect ofthe non-compliance of the obligations by the Mittal Group on the SethGroup and other stakeholders is as under:

I.The basic intent under the MoS was to provide for completeseverance of between the Seth Group and the Mittal GroupBfrom TFIPL and from the development of the 48.03 acres ofland, which has not been achieved due to the defaults by theMittal Group.

II. The severance cannot take place without recording of changeof beneficial interest in the land, which in turn cannot be doneCwithout renewal of the License and without complying withthe conditions stipulated by the DGTCP.

III. One of the conditions laid down by the DTCP for renewingthe license was issuance of an NOC as per the requisiteformat. Since the NOC was conditional and not as per format,Dthe renewal of license too has been rejected and the changein beneficial interest not being recording. This has renderedthe entire settlement under the MoS as otiose and has led toparting of huge sums of money by the Seth Group withouthaving the desired effect at all.

EIV. The most important consequence of all this is that because ofnon-renewal of license coupled with non-bifurcation of thelicense, the Seth Group has been unable to handover thepossession to 700 flat owners of its Project ‘Ferrous City’ onthe 14.80 acres of land falling in its share. It has further beenunable to sell and/or utilize the unsold stock of 126 flats whichFcan be utilized to generate funds to pay the only remainingoutstanding liabilities of the Seth Group under the MoS.

3.3 It is submitted that in terms of Clause 5.8 of the MoS, theMittal Group agreed not to resign from the board of directors of TFIPLand not to transfer majority/controlling shareholding of TFIPL till renewalGof licenses. However, perusal of the recent Balance Sheets of TFIPLshows that the said Balance Sheets have not been signed by the Mittalbrothers namely Mr. Sumit Mittal (Contemnor No. 1) and Mr. MadhurMittal (Contemnor No. 2), but has been signed by proxies of thecontemnors. This has been done in order to avoid sanctions from thisCourt or any other Court.H

3.4 Making the above submissions, it is prayed to issue the followingdirections:

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(a) Direct Mr. Sumit Mittal (Contemnor No. 1) and Mr. MathurMattal (Contemnor No. 2) and TFIPL to pay the entire EDCliability of TFIPL in relation to License No. 34, 35 and 36other than the share of the EDC liability which the Seth GroupBhas undertaken to pay.

(b) Declare that Seth Group’s EDC liability was only up to anamount of Rs.25,27,92,000/- out of the total EDC liability ofTFIPL, in relation to License No. 34, 35 and 36 as on 24.3.2015together with interest accrued thereon from 24.03.2015. Outof this, Seth Group has already paid Rs.9.40 crores vide DDNo. 501599 dated 01.08.2016 and has also given a bankguarantee of Rs.6.65 Crores to DTCP towards its EDCliability. Seth Group is not liable to any other EDC payment inrespect of License No. 34, 35 and 36.

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(c) Direct DTCP to bifurcate the Seth Group’s portion of theland.

(d) Direct DTCP to raise a fresh demand on TFIPL for the entireoutstanding liability of TFIPL and set out the payment scheduleas per their applicable EDC relief policy.

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(e) Direct Mittal Group to renew the licenses as per theirobligations set out under Clause 17, provide General Powerof Attorney by TFIPL (as per clause 5.3) Board Resolutionby TFIPL for availing benefit under EDC Relief Policy (asper Clause 1.2.1), NOC without any conditions (as per ClauseF8) to the Seth Group.

(f) Direct Mr. Sumit Mittal (Contemnor No. 1) and Mr. MathurMittal (Contemnor No. 2) to deposit their passports in Courtand list the matter after a few weeks to determine if theMittal Group has complied with the orders passed by thisCourt.

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It is submitted that the above prayers will not only resolve thevarious issues between the Mittal Group and Seth Group but will alsoresolve the plight of various homebuyers who are suffering because ofthe fraud played by the Mittal Group who are not complying with any of H

Atheir obligations under the MoS and are conveniently resigning from thecompanies which are owned and controlled by them after siphoning offmoneys paid by the Seth Group to them so that they can evade anyliability.4. Miss Meenakshi Arora, learned senior advocate appearing onBbehalf of the respondent Mittal Group has submitted as under:

(i) Mittal Group/TFIPL/Maximal have not committed any breachor disobedience of the terms and conditions of the MoS dated 04.05.2015;

(ii) The contempt petition filed by the Seth Group is a farce,motivated and a ruse/ploy so as to create artificial/imaginaryCcircumstances to cover up their willful and intentional acts of omissionand commission of having failed to fulfill their obligations qua theirallottees, who have invested in the project of the Seth Group, part ofwhich is incomplete and the remaining unsafe for habitation as per thereport of the Commission appointed by the RERA;D(iii) In view of the order dated 01.10.2019 passed by RERA inComplaint No. 826/2018 – “Ferrous vs. Maximal” and Complaint No.1402 of 2018 – “Maximal vs. Maximal”, the present contempt petitionis rendered infructuous. The alleged issues/acts of disobedience raisedby Seth Group have been delineated and put to rest by the competentEauthority – RERA, Haryana. RERA, Haryana has put to rest thefollowing issues:

i)No objection to LC report filed; ii)Major violation in Zone A;

iii)Grant of Occupation Certificate to the Developer in 48.038Facres of land under license No. 34-36/2007;

iv)Quantification of EDC liability and Mode and manner ofpayment of EDC liability qua respective developers includingthat of FERROUS project (developed by Seth Group); Gv)Renewal of License qua each of developers;

vi)Condition of obtaining NOC for bifurcation of License fromLicences i.e. MAXIMAL is no longer applicable; H

ASHISH SETH v. SUMIT MITTAL AND OTHERS

vii)Direction to DTCP, Haryana to deal with flagrant deviationsand violation in the construction at the project site; A

viii)Prohibited from offering possession.

5. With respect to the obligations of the Seth Group, it is submittedas under:

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S. No.ParticularsAmountReply of contemnors(Rs. In Crores)1.Payment to 38.50Seth Group defaulted in payment of Maximal the last instalment compelling the contemnors to file a Contempt Petition before this Court bearing No. C714/2015. It is on filing of the Contempt Petition that Seth Group in obedience of MOS paid the last instalment of Rs.6 Crore. 2.License fee to 1.47It is falsely stated that Rs.1.47 crores DTCP, was paid by Seth Group. Seth Group Haryana in paid Rs.93.50 lakhs approximately, Dterms of proportionate to their share of land out .clause 1.3 of 48.038 acres situated in Sector-89, Faridabad. Clause 1.3 relied upon is to be read in conjunction with clause 2 of the MOS.3.Bank 6.65Seth Group in discharge of his guarantee to obligation to pay furnished this BG, Esecure which is returnable to Seth Group. payment of This condition is no longer applicable EBC (External in view of the order dated 01.10.2019 Development (RERA). Charges)4.Bank 3.55Seth Group in discharge of his guarantee to obligation to construct the project in Fsecure IDW accordance with law furnished this (Internal BG, which is returnable to Seth Group.Development Work)5.Consultancy 0.25The license was expired since the year fee 2009. There were enumerable formalities to be completed for Grenewal of license w.e.f. the date of its expiry. It was unanimously agreed to engage the services of a third party for the renewal of the license.

5.1 Now, so far as the obligations of the Mittal Group, it is submittedon behalf of Mittal Group as under:

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2. GPA to be issued by 5.3Under Clause 5.3 Additional Document filed ATFIPL in favour of on 21.12.2019 (IA 197372), it was agreed that FIPL TFIPL would execute a registered GPA in favour of FIPL. Till 29.05.2015 no one came from FIPL to get the GPA registered. An email was issued dated 29.05.2015 requiring Seth Group to furnish a Stamp Paper for GPA and also make themselves available before the office of Sub-Registrar. BIn response to the said mail Seth Group vide email dated 23.06.2015 informed that they do not want to register the GPA. This was in contravention to the agreed terms of MoS. As an abundant caution the Mittal Group on their own took the initiative of seeking approval of DTCP, Haryana to execute a registered GPA in favour of Seth Group to Cenable them to deal with their project without any impediment. Since the Seth Group did not come forward for collection of the GPA and its registration the Mittal Group through their attorney provided Seth Group duly executed GPA by the executants vide letter dated 04.07.2016. 3.Bifurcation of license & 8NOC was provided by the contemnors and Non grant of NOC by filed with DTCP, Haryana on 19.04.2016. DMaximal NOC is acknowledged DTCP, Haryana and found in order vide note sheet dated 13.05.2016. As per “Clause-8”, parties agreed to jointly apply for change of developer i.e. from TFIPL, to FIPL in terms of the agreement dated 15.06.2007 and in terms of policy of EDTCP, Haryana dated 18.02.2015. As per email dated 27.10.2015 the contemnors reiterated that filing of application is a joint obligation and all documents to be submitted in that regard with DTCP, Haryana are ready, however, as per conditions of policy the new entity was also required to submit various information, which the contemnors were not aware much less being Fshared with the said information. Seth Group in contravention to the joint obligation unilaterally applied for bifurcation of license. The application got rejected on 13.10.2016 for various reasons including lack of technical and financial capacity of the Seth Group. The rejection order since not assailed, attained finality. GBefore RERA, Maximal not only agreed to offer their cooperation for bifurcation of license but submitted that all formalities on the part of the land owner/licensee be dispensed with to expedite the same. This contention is accepted by RERA vide order dated01.10.2019.

A4.Renewal of license17Maximal in terms of order dated 26.10.2015 agreed to apply for renewal of license on its expiry. Maximal applied for renewal of license on 07.01.2016 as license was expiring on 22.01.2016. Since there was inaction on the part of the Bdepartment, Maximal filed a writ petition before Chandigarh High Court for direction against the department. While directing the department the Writ Petition was posted for hearing on 05.07.2016. DTCP, Haryana vide order dated 04.07.2016 declined to renew the license for non-compliance of the conditions mentioned in C“Para 3 and 4” of the order. The conditions mentioned in “Para 3” were fully complied with as recorded in the office note dated 25.01.2016. However, Maximal was prevented from filing any appeal/challenge against the said order dated 04.07.2016, as the Seth Group declined Dto pay EDC, which was a pre-requisite condition and a ground of rejection as mentioned in “Para-4” of the order dated 04.07.2016.5.Responsibility to defend 20 of MOSThe Mittal Group and Seth Group were 138 proceedings acquitted and an appeal filed by the complainant ispending adjudication .

EThe renewal of the license is as per the HUDA Act, Rules andRegulations and not as per the requirement of the licensee. The licensewas initially granted on 23.01.2007 and valid up to 22.01.2009. As perthen HUDA Rules, the license was renewable for a period of one year.That as per subsequent amendment, the license was renewable for aperiod of two years. In the present case, the license in question wasFapplied for renewal pursuant to settlement in the month of June 2015and it got renewed by the department against payment of charges foreach renewal period. Mittal Group applied for renewal of license on07.01.2016 for a period of two years in compliance of order dated26.10.2015. However, the license could not be renewed for the reasonsset out in tabular form Serial No. 4 hereinabove.G

That as per the letter dated 27.03.2015, EDC liability was dividedinto two parts:

i.Payable against 33.238 acres which includes project of 4developers and;H

ii. Payable against 14.80 acres payable by TIDCO (Companyunder Liquidation) through auction purchaser. This bifurcationand quantification of EDC liability was accepted by OL.

Seth Group in willful defiance of the settlement did not pay theEDC. The Seth Group influenced DTCP, Haryana to withdraw the orderdated 27.03.2015 to wriggle out of the settlement. DTCP, Haryanaarbitrarily without any basis, vide letter dated 10.01.2017 withdrew theletter dated 27.03.2015. That the appellant authority has stayed the effectof the letter dated 10.01.2017 and the division of liability vide letter dated27.03.2015 is still in force and is now for all intents and purposes confirmedby RERA vide order dated 01.10.2019. That the liability of developerincluding that of the Seth Group will be determined by DTCP, Haryanaand paid to the department without the involvement of Mittal Group/Contemnors.

5.3 That as per order dated 01.10.2019 passed by RERA, thefollowing has been ordered:

(a) Bifurcation/Division of licence of all the developers of 48.038acres of land situated at Sector-89, Faridabad including thatof Petitioner i.e. their entity FIPL.

(b) Renewal of license for each of the developers by DTCP,Haryana on bifurcation.

(c) Separate quantification of EDC and other statutory liabilitiesof each of the developers proportionate to their share of land.

(d) Grant of occupation certificate, possession etc., as per lawon removal of all unauthorized and illegal construction to bedetermined by DTCP, Haryana.

(e) All or any formality requiring involvement of Maximal hasbeen dispensed with.

In light of the subsequent development and order dated 01.10.2019passed by RERA, as such, the contempt petition is liable to be dismissed.

6. Now, so far as submission on behalf of the Seth Group asregards non-payment of EDC to DTCP by Maximal, it is submitted thatunder the MoS dated 04.05.2015 there is no such condition and/orobligation on the part of the Maximal to pay any EDC to DTCP. It issubmitted that as such the same was not even the case so prayed in the A

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Acontempt petition. The contempt petition filed by the Seth Group waslimited and confined to the alleged disobedience by the Maximal as follows:

a) Non-issuance of GPA.

b) Non-issuance of Board Resolution.

Bc) Non-issuance of NOC for bifurcation.

6.1 In fact, TFIPL/Maximal/Mittal Group in their contempt petitionhave subsequently pleaded disobedience of Seth Group by not payingExternal Development Charges (EDC) of license No. 34, 35 and 36 of207 as determined by memo dated 27.03.2015 to Rs.25.27 crores (as onC24.03.2015) together with interest in terms of Clause 1.2.1 of the MoSand the undertaking given to this Court.

6.3 That there is no condition and/or undertaking of Maximal topay the differential amount of Rs.33.78 crores in the MoS dated04.05.2015 and thus no mode and manner is provided in the MoS to payDthe differential EDC amount i.e. 33.78 crores. This amount is payableby a separate and distinct entity TIDCO having the beneficial interestand ownership in land proportionate to which this amount is determinedby the letter dated 27.03.2015 issued by DTCP, Haryana. The issueregarding payment of EDC by the project developer namely viz. TIDCOof Rs.33.78 crores (determined by letter dated 27.03.2015) being theEbeneficial amount as attained finality. The Memo dated 27.03.2015 isthe mother document which defines the obligations of each of the partiesand the same came into existence by taking into consideration the MoSdated 27.03.2015. It is submitted therefore that it the MoS dated27.03.2015 is considered as non-existent, then the MoS dated 04.05.2015must fall.F

6.4 It is submitted that even otherwise the Maximal has no financialability to pay any amounts. Maximal and other licensee divested of theirright, title and interest in 48.08 acres way back in the year 2007-2008.The licensees are left with no interest in the project land. TIDCO is oneof the project developers and has beneficial interest in part of the projectGland. Maximal as well as the Mittal Group have nowhere agreed to paythe amounts for and on behalf of the TIDCO being the beneficial ownerof the project land.

6.5 It is submitted that the malafides of Seth Group are apparentand writ large from the very fact that on one hand Licensee in the largerH

interest are wanting bifurcation of license in favour of Seth Group andother co-developers of the entire land whereas the Seth Group havetaken every possible course and has left no stone unturned to negate/nullify the bifurcation of EDC Liability vide letter dated 27.03.2015 andsubsequent thereto bifurcation of license vide letter dated 01.10.2015.The change of beneficial interest has been allowed by RERA vide orderdated 01.10.2019 and there is no stay of the order. It is the Seth Groupwho has failed to honour their obligation under the MOS and is trying tonegate both the letters to create an artificial and imaginary alibi for nothonouring their obligations under the MOS dated 04.05.2015 of payingEDC liability of Rs.25.27 crores together with interest accrued as ondate.

6.6 It is submitted that as such Seth Group has not fulfilled itsobligations/conditions/undertaking and paid the amount of Rs.25,27,92,000/- and therefore as such Seth Group is liable to be prosecuted and punishedunder the Contempt of Courts Act for which the respondents – Maximal/Mittal Group have filed the contempt petitions.

6.7 It is submitted that therefore there is non-compliance on thepart of Mittal Group, much less the willful disobedience of the MoS andthe order passed by this Court and therefore it is prayed to dismiss thecontempt petition filed by Seth Group.

7. In reply, it is submitted on behalf of Seth Group that so far asthe submission on behalf of Mittal Group in their defence that there arelarge-scale violations in the construction undertaken by the Seth Groupin the portion of the license to lands falling within the Seth Group area isconcerned, it is submitted that the same has no relevance to the presentcontempt proceedings. What Seth Group does in its own share of theland is not relevant for the MoS in the present proceedings. The MittalGroup is only raising these issues in order to sidetrack the main issuethat they have been in contempt of their undertaking before this Court.

It is submitted that even otherwise FIPL of the Seth Group hascured its non-compoundable violations in its construction. It is submittedthat if the bifurcation of the license had taken place, the frivolous issuesraised by Mittal Group would have been the exclusive liability of theSeth Group. It is submitted that in any case and as submitted hereinabove,the Mittal Group has failed to fulfill its obligation under the MoS, whichsubsequently became the part of the order passed by this Court and the A

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8. Heard learned counsel appearing on behalf of the respectiveparties at length.

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8.1 At the outset, it is required to be noted that as such the presentproceedings are filed by the respective parties to the MoS dated04.05.2015, which subsequently was made the order passed by this Courtdated 05.05.2015 to initiate appropriate proceedings against each otherunder the provisions of the Contempt of Courts Act. It is not in disputeCthat all were parties to the MoS/consent order.

8.2 Before discussing the rival submissions made by the learnedcounsel appearing on behalf of the respective parties, the backgroundwhich ultimately led to the MoS dated 04.05.2015 are required to bereferred to and considered.

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8.3 Criminal proceedings were initiated against Ashish Seth ofSeth Group and others which was the subject matter before this Court inWrit Petition (Criminal) No. 5 of 2015. The disputes involved werecommercial disputes. It appears that during the course of hearing, asuggestion was given, as the controversy in the case pertained to paymentEof money as alleged, that the matter be sent for mediation. This Court,with the consent of the parties, sent the matter for mediation, subject toAshish Seth depositing a sum of Rs.10 Crore before this Court. ThatAshish Seth deposited the sum of Rs.10 Crore. This Court requestedMr. Justice R.V. Ravindran, a former Judge of this Court, to mediatebetween the parties. Thereafter, learned Mediator mediated and initiallyFsubmitted the interim report. The interim report of the learned Mediatorreads as follows:

“This Hon’ble Court by order 09.02.2015, referred the matterto mediation so as to enable the parties to arrive at a negotiatedsettlement.

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In pursuance of the above, mediation meetings were heldon 14.02.2015, 16.02.2015, 17.02.2015, 18.02.2015, 10.03.2015,15.03.2015 and 17.04.2015 at New Delhi. The meetings wereattended by Mr. Surender Seth and Mr. Ashish Seth with theircounsel, Mr. Sachin Puri on one side, and Mr. Sunit Mittal and H

Mr. Mathur Mittal with their counsel Mr. Sanjay S. Chhabra onthe other side.

After detailed negotiations and discussions and exchangeof various alternatives, parties have arrived at a broad consensus,without prejudice to their respective rights and contentions. Partiesare further negotiating to give shape to the terms agreed, in amanner which will effectively express what has been agreed, andput an end to the disputes and at the same time safeguarding theirrespective interests.

As several issues relating to legal and taxation issues requireto be sorted out with the advice of experts, the parties have notbeen able to finalize the terms and execute the Memorandum ofSettlement.

On the joint request of the parties, further mediationmeetings are scheduled for 11.04.2015, 12.04.2015 and 15.04.2015for further negotiations and finalization of the draft Memorandumof Settlement.

It is expected that the said process is likely to take at leasttwo more weeks and, therefore, it is respectfully submitted thatthe time for completion of mediation process be extended till theend of this month.”

Thereafter, all the parties settled all the disputes and entered intothe Memorandum of Settlement dated 04.05.2015. At this stage, it isrequired to be noted that the MoS dated 04.05.2015 was amongst (i)Shri Surender Seth; (ii) Shri Ashish Seth; (iii) M/s Ferrous Forging Limited;(iv) M/s Ferrous Alloy Forging Pvt. Ltd.; (v) M/s Ferrous Township Pvt.Ltd. And (vi) M/s Ferrous Infrastructure Pvt. Ltd. (all belonging to SethGroup) as the first party AND (i) Shri Sumit Mittal; (ii) Shri MadhurMittal (belong to Mittal Group) as the second party AND M/s TriveniFerrous Infrastructure Pvt. Ltd. as the third party. The preamble of theMoS reads as under:

“PREAMBLE:

WHEREAS TFIPL is an Infrastructure Development Companyin which the Seth Group represents that it holds 50% share (i.e.FFL and FAFPL have 33% and 17% shares respectively); andMittal Group represents that it holds the remaining 50% share; A

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AWHEREAS disputes arose among the Seth Group on the onehand and the Mittal Group on the other, with respect to landsadmeasuring 37.58125 acres and 29.1953 acres, situated at Sector70, Faridabad (Haryana) on account of Mittal Group claiming thatthe Seth Group should pay certain amounts to TFIPL and onaccount of certain issues relating to management and maintenanceBof statutory records and books of account of TFIPL.

WHEREAS the said disputes have given rise to the followinglegal proceedings which are either pending in Courts of Law and/or are under investigation by the Competent Authority:

(a) Company Petition bearing C.P. No. 158 (ND) of 2013 filedby FAFPL and FFL against the TFIPL, Sumit Mittal, MadhurMittal and others qua the affairs of TFIPL, pending beforeCompany Law Board, New Delhi; C

(b) Complaint Case No. 613/2014 pending before theJurisdictional Magistrate at Agra (U.P.) arising from FIRNo. 513/2014 against Surender Seth, Ashish Seth and others,registered at Police Station, New Agra, Agra; D

(c) FIR No. 808/2014 against Surender Seth, Ashish Seth andothers, registered with the Economic Offence Wing, NewDelhi; E

(d) Crl. M.C. No. 5621/2014 on the file of Hon’ble Delhi HighCourt (Ashish Seth Vs. State & Another); (e)Crl. M.C. No. 5622/2014 on the file of Hon’ble Delhi HighCourt (Surender Seth Vs. State and Another); F

(f) W.P. (Crl.) No. 5/2015 on the file of Hon’ble Supreme Courtof India (Ashish Seth Vs. Govt of NCT of Delhi & Others); (g)W.P. (Crl.) No. 11/2015 on the file of Hon’ble SupremeCourt of India (Surender Seth Vs. Govt of NCT of Delhi &Others).

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WHEREAS Criminal Case No.235/2014, filed by one Mr. HariMohan Gupta (a witness in FIR No.513/2014) against Ashish Sethis pending before the Special Judge, Agra (U.P.) and Ashish Sethhas filed a petition under Section 482 Cr.P.C. being Petition No.134/2015, before the Hon’ble Allahabad High Court, for quashingHthe said proceedings.

WHEREAS the Hon’ble Supreme Court of India in theproceedings mentioned at Serial No. (f) and (g) above, vide Orderdated 14.01.2015 referred the parties to mediation andsubsequently, vide Order dated 09.02.2015 requested Justice R.V.Ravindran, former Judge of Hon’ble Supreme Court of India toact as a Mediator to assist the parties to arrive at a negotiatedsettlement; WHEREAS after deliberations and discussions between the twogroups ove several sittings, the parties have agreed to resolve alltheir disputes amicable as per the terms hereinafter set out.”

Thus, the parties entered into the MoS and agreed to resolve alltheir disputes amicably. Therefore, as such, all the parties to the MoSdated 04.05.2015 are bound to comply with the relevant terms andconditions and their respective obligations. As per the terms of thesettlement agreed between the parties, there are certain obligations tobe fulfilled by the respective parties, which the respective parties arebound to fulfill and comply with in its true spirit. The obligations of SethGroup are specifically mentioned in Clauses 1 to 1.5.1. The Seth Grouphas further agreed and undertaken to perform their part of obligationswith the Mittal Group and TFIPL as mentioned in Clauses 3 to 3.14 andClause C. Similarly, the Mittal Group and TFIPL’s obligations,representations and warranties are also specifically mentioned in ClauseD, which are specifically mentioned in Clauses 5 to 5.9.

As agreed between the parties and in consideration of theobligations in Clauses 1.1, 1.3 and 1.4 and on furnishing of all requisitebank guarantees as required in terms of Clause 1.2 by the Seth Groupunder the MoS, all FIRs, complaints and cases mentioned in Clause 6.1to Clause 7 were required to be withdrawn/quashed/cancelled/terminated.The joint obligation of the parties are specifically mentioned in Clause F(relevant Clauses 8 & 9). As per Clause 10, TFIPL and Mittal Groupconfirmed that there are no outstanding claims of Seth Group or any ofits constituents under the agreement dated 15.07.2007 in respect of FSIadmeasuring 11,28,204 Sq Ft. including FSI for EWS calculated on atotal area of 14.80 acres on the land situated in Sector 89 Faridabadunder License Nos. 34, 35 and 36 of 2007 granted in the name of TFIPLand others. Clause 12 which is an important and relevant clause readsas under:

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A“12. It is hereby confirmed that other than the payment ofthe EDC amount required to be made under Clause 1.2.1 andunder Clause 3.8 above, Seth Group shall not be liable for anyother EDC payment under License Nos. 34, 35 and 36 of 2007either on renewal and/or upon bifurcation of License Nos. 34, 35and 36 of 2007, except to the extent of Rs.25,27,92,000/- togetherBwith interest accrued thereon from 24.03.2015, imposed by DTCP,Haryana. It is further clarified that the liability to pay EDC ofSeth Group in a sum of Rs.25,27,92,000/- against the total EDCliability of Rs.59.05 crores as on 24.03.2015, shall not be variedsubject, however, to the condition that in the event of the totalCliability, which has been assessed at Rs.59.05 crores as on23.04.2015, being revised from Rs.59.05 crores, to any higheramount as on 24.03.2015, on account of revised calculation orsimilar reason. In such eventuality, the Seth Group will bear theproportionate increase in regard to the amount in excess ofRs.59.05 crores.”D

Clause G is specifically with respect to renewal of licenses, moreparticularly, license Nos. 34, 35 and 36 of 2007. The relevant clauseswith respect to renewal of licenses are Clauses 17, 18 and 19, whichread as under:

E17. Mittal Group shall apply for renewal of license by 23.06.2015subject to compliance of clause 1.2 (to the extent of providingBank Guarantee), 1.3 & 1.4 by the Seth Group. The Seth Grouphave provided documents/undertakings with respect to the landsfalling to share of the Seth Group under Agreement dated15.06.2007, i.e. (i) Status of construction/allotment of EWS Flats,Fand (ii) Service Plan status, its drawing, estimates and its approvalfrom HUDA, Chandigarh annexed as Annexure-16, to enableMittal Group to apply for renewal of license. Seth Group doesnot have any further document in this regard, however, it is clarifiedthat in case any indemnity, undertaking, letter and/or similarGdocument is required to be executed after filing of the applicationfor renewal of license, pertaining to the lands falling in the shareof Seth Group under Agreement dated 15.06.2007, Seth Groupshall do the needful at the earliest if so requested by Mittal Group.

18. On application made for renewal of license in terms of clauseH17, Mittal Group will secure renewal of license within 90 days. All administrative and miscellaneous charges, compounding fee,penalties and other charges levied and payable by PAL, ORS andHeritage for renewal of license shall be paid by the Mittal Group.All such charges in respect of FIPL agreement shall be exclusivelypaid/borne by Seth Group by similarly paying to TFIPL immediatelyon being demanded.

19. Seth Group shall pay a sum of Rs.25,00,000/- (Twenty FiveLacs only) to Mittal Group for hiring/engaging consultancy servicesfor renewal of License Nos. 34, 35 & 36 of 2007 in favour ofTFIPL at the time of filing of the application for renewal of licenseby the Mittal Group.”

As per Clause 27, with the execution of the said MoS and subjectto compliance of undertaking and fulfillment of all obligations of the SethGroup and Mittal Group/TFIPL as undertaken in the MoS, it was agreedbetween the parties that all pending disputes amongst the parties. shallstand resolved and TFIPL and/or Mittal Group have no claim of anynature against the Seth Group and similarly Seth Group shall have noclaim of any nature against the TFIPL and/or Mittal Group. The MoSfurther provides the consequences of breach/non-payment of theamounts. The relevant clauses are Clauses 36, 37 and 38, which read asunder:

“36. In the event of any default by Seth Group of their obligationsand warranties, the Mittal Group and TFIPL will be entitled toinitiate legal proceeding for enforcing performance of theobligations/warranties given by Seth Group, including initiation ofcontempt proceedings against the Seth Group in accordance withlaw.

37. In case there is a default in payment as agreed in Clause Nos.1.1, 1.3 & 1.4 of furnishing of all requisite Bank Guarantees asrequired in terms of clause 1.2 by the Seth Group, the Mittal Groupand TFIPL will also be entitled to approach the Hon’ble SupremeCourt for revival of the complaints/FIRs stated at serial Nos. (b)& (c) of the list of cases mentioned in the preamble above.Provided however, on Mittal Group and TFIPL obtainingperformance of the obligations, the revised criminal proceedingsand contempt proceedings, if any, shall be terminated.

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438SUPREME COURT REPORTS

A38. In the event of any default by Mittal Group of their obligationsand warranties, the Seth Group will be entitled to initiate legalproceeding for enforcing performance of the obligations/warrantiesgiven by the Mittal Group, including initiation of contemptproceedings against the Mittal Group in accordance with law.”

BThis MoS was placed before this Court in the aforesaid WritPetition and this Court recorded the settlement in entirety and as agreedbetween the parties and as prayed, the MoS dated 04.05.2015 became apart of the order and this Court directed the parties to adhere to theterms and conditions of the settlement and the undertakings given therein.This Court specifically further observed that every facet of it shallCtantamount to an order of this Court and in case of failure the partiesshall be at liberty to move this Court for an appropriate direction. Thus,as per the MoS and even as per the order passed by this Court dated05.05.2015, all the parties to the MoS shall have to comply with and/orfulfill their respective obligations as mentioned in the MoS datedD04.05.2015. As observed hereinabove, the disputes were commercialdisputes and therefore all the parties to the disputes agreed to resolve alltheir disputes, which culminated into the MoS and thereafter the orderpassed by this Court.

9. The entire object and purpose of entering into the settlementEwas to resolve all the disputes between the parties. Therefore, it is theduty of the Court that the settlement entered into between the partiesand the consent order passed by this Court should be given effect to inits letter and spirit. All the parties to the consent terms are required tofully comply with the terms of settlement/consent terms and the consentorder. One party cannot be permitted to say that that portion of theFsettlement which is in their favour be executed and/or complied withand not the other terms of the settlement/consent terms/consent order.

9.1 From the facts narrated hereinabove and even otherwiseconsidering the relevant clauses of the MoS and the obligations to befulfilled by the respective parties to the MoS, it appears that Seth GroupGhave fully complied with their obligations, except deposit of the totalamount of Rs.25.27 crores - payment to DTCP towards initial liability ofRs.59.05 crores of TFIPL. It appears that Seth Group have already paidRs.9.40 crores against the total libaiility of Rs.25.27 crores towards EDCliability against the total liability of Rs.59.05 crores of TFIPL as perHClause 1.2. It appears that the balance amount is not deposited by the

Seth Group as the Mittal Group have not fulfilled their obligations underthe MoS. It is stated at the bar that the Seth Group is always ready andwilling to fulfill their obligations in terms of the MoS, i.e. their liability asper Clause 1.2, subject to Mittal Group fulfill its obligations. From thematerial on record, it appears that the Mittal Group have not fulfilledtheir obligations as per Clause 1.2, Clause 5.3 and Clause 8. Neither theMittal Group nor TFIPL have deposited the balance amount to be paidtowards EDC liability of Rs.59.05 crores (deducting Rs.25.27 crores tobe paid by the Seth Group as per Clause 1.2). It is the case on behalf ofthe Mittal Group that it is the liability of the TIDCO and not the MittalGroup and in the MoS there is no specific term and the obligation thatthe said amount is to be paid by the Mittal Group. It is required to benoted that all the terms and conditions/obligations of the Seth Group,Mittal Group and TFIPL are required to be read conjointly. The licenseNos. 34, 35 and 36 of 2007 are required to be transferred in favour ofSeth Group. It appears that TFIPL acquired some land at Sector 70 andsome 48.03 acres of land at Sector 89, Faridabad. TFIPL also availedlicenses Nos. 34, 35 and 36 from the competent authorities in the year2007 in respect of land bearing at Sector 89 with an intent to develop theSector 89 land. Subsequently, however , both the parties – Seth Groupand Mittal Group agreed that it would be the best that the developmentof the said land be divided and carried out separately and thereupon thedevelopment rights in the Sector 89 land parcel of 48.03 acres of landbelonging to TFIPL was sold in the manner mentioned as under:

TFIPL48.03 acres

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The liability of Rs.59.05 crores was with respect to the entireland – 48.03 acres at Sector 89, Faridabad. Therefore, the liability of theSeth Group would be with respect to their share out of 48.03 acreswhich, as agreed between the parties, would come to Rs.25.27 croresand therefore the balance is naturally required to be paid by Mittal Group/

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ATFIPL. Unless and until the entire amount is deposited with the DTCPtowards EDC, the aforesaid licenses cannot be renewed and afterrenewal they are required to be bifurcated and transferred. As the MittalGroup has refused to deposit the balance amount of EDC (after deductingRs.25.27 crores which is the liability of Seth Group as per Clause 1.2),the licenses are not being renewed thereafter. If the contention and theBsubmission on behalf of the Mittal Group is accepted, in that case, theentire MoS would be unworkable and the purpose and object of theMoS to resolve all the disputes would be frustrated. As the Mittal Grouphas not fulfilled its obligations it appears that the Seth Group has notdeposited the balance amount of EDC liability. At this stage, it is requiredCto be noted that as per Clause 5.8 Mittal Group shall not resign from theBoard of Directors of TFIPL and shall not transfer majority/controllingshareholding in TFIPL till renewal of licenses. As per the case of SethGroup, Mittal Group have retired from the Directorship of TFIPL andthe balance sheet since then is being signed by the proxies.

D9.2 As observed hereinabove, as per the MoS dated 04.05.2015and even as per the order passed by this Court 05.05.2015, all the partiesto the MoS are bound to fulfill their respective obligations. As observedhereinabove, Seth Group have fulfilled their obligations, except thepayment of DTCP i.e. Rs.25.27 crores as per Clause 1.2 of the MoS(except Rs.9.49 crores which is paid).E

10. Having heard the learned counsel for the respective partiesand considering the material on record, we are of the opinion that therespondent Mittal Group in Contempt Petition No. 34 of 2016 havedeliberately and willfully not fulfilled their obligations which they arerequired to fulfill under the MoS dated 04.05.2015 and as such theyFhave rendered themselves liable for the action under the Contempt ofCourts Act. However, before taking any further action, we propose togive further two months’ time to the respondents, namely, Shri SumitMittal, Shri Mathur Mittal and TFIPL to fulfill their part of obligationsunder the MoS dated 04.05.2015, more particularly,G

(i) To pay the entire EDC liability of TFIPL with interest in relationto license Nos. 34, 35 and 36 other than the share of the EDC liabilitywhich the Seth Group has undertaken to pay as per Clause 1.2 of theMoS;

(ii) As per Clause 1.2, EDC liability of the Seth Group is to theHextent of Rs.25,27,92,000/-, out of the total EDC liability of TFIPL in relation License Nos. 34, 35 and 36 as on 24.03.2015 together withinterest accrued thereon from 24.03.2015. Therefore, the Seth Groupshall make the entire payment of Rs.25,27,92,000/- along with the interestaccrued thereon from 24.03.2015 towards their EDC liability in respectof License Nos. 34, 35 and 36 of 2007;

(iii) The Mittal Group is hereby further directed to renew thelicense Nos. 34, 35 and 36 of 2007; to execute GPA by TFIPL (as perClause 5.3), Board Resolution by TFIPL for availing benefit under EDCRelief Policy (as per Clause 1.2.1), NOC without any conditions (as perClause 8) to the Seth Group.

(iv) Thereafter, the DTCP to bifurcate the Seth Group’s portionof the land in accordance with law and as per the policy and/or the rulesand regulations, if any. It is also observed that it will be open to therespective parties to avail the benefit of the applicable EDC Relief Policy,which may be considered by the DTCP in accordance with the applicableEDC Relief Policy, if any.

10.1 The aforesaid entire exercise shall be completed within aperiod of two months from the date of lifting of lockdown in the concernedarea, failing which, as observed hereinabove, this Court shall proceed topass appropriate further order/orders under the Contempt of Courts Actfor non-fulfillment of the obligations by the respondents – Shri SumitMittal, Shri Madhur Mittal and TFIPL. As observed hereinabove, thisCourt has deferred to pass further orders against the contemnors - MittalGroup and TFIPL to enable them to give them further opportunity.

11. In view of the above discussion and for the reasons statedabove, we see no substance in Contempt Petition (C) No. 257 of 2016and Contempt Petition (C) No. 889 of 2017 filed by the Mittal Groupagainst the Seth Group. Under the circumstances, Contempt Petition(C) No. 257 of 2016 and Contempt Petition (C) No. 889 of 2017 deserveto be dismissed and are accordingly dismissed. List Contempt Petition(C) No.34/2016 in Writ Petition (Crl.) No. 5 of 2015 before this Benchimmediately after three months.

Directions issued.

Devika Gujral

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