Memorandum of Settlement

Ashish Seth vs. Sumit Mittal and others [Contempt Petition(C) No. 34/2016 In Writ Petition (Criminal) No.5/2015]

[09.10.2020] – Contempt Petition – Performance of Memorandum of Settlement – Directions of Court

Brief: The Supreme Court in the present petition has refused to initiate contempt proceedings for not following its previous order/directions and Memorandum of Settlement towards a developmental project. The Petitioner had pleaded breach on the part of alleged Contemnors in paying External Development Charges (EDC) and renewing of licenses which were required to be done as per the MoS. The alleged Contemnors, however, contended that the Petitioner were duty bound to supply certain documents which were pre-requisite for renewal of licenses. The Court clarified certain contentions between the parties i.e. which party has obligation to obtain license, liability towards External Developmental Charges and duty of the applicants to supply some documents. The Court directed the Petitioner to supply some documents, renewal of licenses by the alleged Contemnors and payment of EDC by both to respective shares within a defined timeline. The Court specifically observed that any non­compliance of the these directions as well as the directions in the earlier order dated 24.04.2020 shall be viewed very seriously, warranting action under the Contempt of Courts Act. The Court observed that due non-performance of respective duties the ultimate sufferer is the home buyers who are waiting for their homes.

Important Paragraphs

1. The dispute is between the two groups – Seth Group and Mittal Group.   Both, the Seth Group and Mittal Group entered into a Memorandum of Settlement (MOS) dated 4.5.2015, which ultimately was made a part of this Court’s order dated 5.5.2015, disposing   of   Writ   Petition   (Criminal)   No.  5   of   2015 and   Writ Petition (Criminal) No. 11/2015.   Non­compliance of the order passed by this Court in the aforesaid writ petitions is the subject matter of the present contempt petition No. 34/2016 initiated by the Seth Group.  After considering the rival submissions and the relevant clauses in the MOS dated 4.5.2015 and after considering the obligations of the Seth Group and the obligations of the Mittal Group under MOS dated 4.5.2015 and after having noted and considered   the   material   on   record,   this   Court   in   the earlier detailed order dated 24.4.2020 specifically held that the Mittal Group have deliberately and wilfully not fulfilled their obligations which are required to be fulfilled under MOS dated 4.5.2015. This Court also opined that as such Mittal Group have rendered themselves liable for the action under the Contempt of Courts Act.     However,   before   taking   any   further   action,   this   Court granted further two months’ time to the Mittal Group, namely, Shri Sumit Mittal, Shri Madhur Mittal and TFIPL, to fulfil their part of obligations under MOS dated 4.5.2015….. This Court specifically directed that the entire exercise shall be completed within a period of two months from the date of lifting lockdown in the concerned area, failing which this Court shall proceed to pass appropriate further order/orders under the Contempt of Courts Act for non­fulfilment of the obligations by the respondents – Shri Sumit Mittal, Shri Madhur Mittal and TFIPL.

2. It appears that despite the above specific directions, license numbers 34, 35 and 36 of 2007 are not renewed by the Mittal Group and because of the non­renewal of the aforesaid licensees, even the balance amount of EDC liability has not been paid by the Seth Group and even the Mittal Group has also not paid their liability   towards   the   EDC   in   respect   of   the   aforesaid   license numbers   34,   35   and   36   of   2007   and   therefore   the   ultimate sufferer is the home buyers who are waiting for their homes.

5. It is the case on behalf of the Seth Group that the Mittal Group is deliberately and wilfully and with malafide intention creating   the   hurdles   in   getting   the   aforesaid   three   licensees renewed.  It is submitted that unnecessarily the Mittal Group is asking the Seth Group to furnish the requisite documents to the Maximal Infrastructure Pvt. Ltd. as entailed in the Check­List formulated by the DTCP for renewal of licensees.  It is submitted that   unnecessarily   the   Mittal   Group   is   insisting   the   other developers,   namely,   the   Official   Liquidator   of   Triveni Infrastructure   Development   Company   Ltd.,   PAL   Infrastructure Pvt. Ltd., ORS Infrastructure Pvt. Ltd. and Heritage Cottage Pvt. Ltd. to comply with all formalities as contained in the Check­List for renewal of license and furnish the requisite documents to Maximal Infrastructure Pvt. Ltd.   It is submitted that even the Mittal Group is also not paying their liability towards the EDC, though   specifically   directed   by   this   Court   in   its   order   dated 24.04.2020.  It is submitted that the Mittal Group is required to pay the entire renewal license fee charges and because of nonpayment of the renewal license fee charges and non­submission of the relevant documents and/or asking the documents from the Seth   Group,   though   not   required,   licensees   are   not   being renewed.     It   is   submitted   that   so   far   as   the   Seth   Group   is concerned, they have already fulfilled their obligations under the MOS dated 4.5.2015 and have already paid the huge amount and despite the same they are not getting any benefits and therefore, it is prayed to grant the reliefs prayed in IA No. 78952 of 2020.

6. On   the   other   hand,   Shri   Ranjit   Kumar,   learned   Senior Advocate appearing on behalf of the Mittal Group has submitted that for getting license numbers 34, 35 and 36 renewed the requisite documents as entailed in the Check­List formulated by the DTCP are required to be furnished and the Seth Group is not furnishing the requisite documents and therefore there is a delay in getting the aforesaid licensees renewed. It is submitted therefore that as such the Seth Group is responsible for not getting the licensees renewed.

7. Having heard the learned counsel for the respective parties and considering the earlier order passed by this Court dated 24.04.2020, it cannot be disputed that as directed by this Court the Mittal Group is to renew license numbers 34, 35, and 36 of 2007 and for which the application is to be submitted by the Mittal  Group –  TFIPL.   For the licensees to be renewed, the license renewal fee is required to be paid and only thereafter on payment of EDC by the respective groups – Seth Group and Mittal Group, as determined in the order dated 24.04.2020 and on payment of other charges due and payable under the law, the aforesaid   license   numbers   34,   35   and   36   of   2007   can   be bifurcated.  So, first of all, the renewal license fee is required to be paid.  It is the case on behalf of the Seth Group that they are not required to pay any renewal license fee and it is the liability of the Mittal Group to pay the renewal license fee, which is disputed by the Mittal Group.

7.1. Now so far as the liability to pay the renewal license fee is concerned,   the   relevant   clauses   of   MOS   dated   4.5.2015   are required to be considered and they are clause nos. 1.3, para 2, para 5.4, 17 and 18…..

7.2. It is   required to   be   noted   that   as noted in   order   dated 24.04.2020, the Seth Group earlier deposited a sum of Rs.1.47 crores towards the license renewal fees to DTCP, Haryana.  It is also   required   to   be   noted   that   the   aforesaid   three   license numbers 34, 35 and 36 of 2007 are with respect to the entire 48.03 acres of Sector 89 land, out of which the development rights of only 14.80 acres have been given to the Seth Group. Even, bifurcation of licensees shall be with respect to 14.80 acres in favour of the Seth Group and the remaining 33.23 acres in favour of the Mittal Group and others…..

8. Now so far as the requisite documents to be supplied by the Seth Group and the prayer on behalf of the Mittal Group in I.A. No. 96206 of 2020 directing the Seth Group to comply with the other formalities   as  contained   in  para  17  of   the   order  dated 5.5.2015 and to furnish the requisite documents to the Maximal Infrastructure Pvt. Ltd. as entailed in the Check­List formulated by   DTCP,   Haryana   for   renewal   of   license,   in   a   time   bound manner, is concerned, as such, the Seth Group is required to provide documents/undertakings with respect to the lands falling to share of the Seth Group under agreement dated 15.06.2007, i.e.  (i)  status   of   construction/allotment   of   EWS   flats,   and   (ii) service plan status, its drawing, estimates and its approval from HUDA,   Chandigarh   annexed   as   Annexure­16   to   MOS   dated 4.5.2015 to enable Mittal Group to apply for renewal of license. It is specifically mentioned in clause G (titled Renewal of License), para 17, that Seth Group does not have any further documents in this regard.  It is further clarified that in case any indemnity, undertaking, letter and/or similar document is required to be executed after filing of the  application for renewal  of license, pertaining to the lands falling in the share of the Seth Group under  agreement   dated 15.06.2007, Seth  Group  shall  do  the needful at the earliest. To avoid any further controversy, it will be appropriate that the appropriate authority shall communicate to the Seth Group and the Mittal Group within a period of two weeks from today, to provide the documents/undertakings with respect to the lands falling to their respective shares and the Seth Group and Mittal Group   shall   provide   the   documents   and/or   undertakings required by the appropriate authority, within a period of two weeks from the receipt of such demand.   However, it is clarified that it is for the TFIPL – Mittal Group to get license nos. 34, 35 and 36 of 2007 renewed and it will be responsibility and liability of the Mittal Group to renew the aforesaid licensees.

10. In view of the above and for the reasons stated above, in continuation of our earlier order dated 24.04.2020, it is further clarified and directed as under:

(i) that Mittal Group shall apply for renewal of license numbers 34, 35 and 36 of 2007, within a period of two weeks from today, if not applied for renewal so far;

(ii) that the liability of the Seth Group to pay/cause to be paid the   renewal   license   fees   would   be   proportionate   to   the   lands falling to the share of the Seth Group, i.e., 14.80 acres under the agreement   dated   15.06.2007.     Over   and   above   their   liability towards the renewal license fees with respect to the lands falling to their share, the Seth Group shall also pay ½ of the liability of PAL, ORS and Heritage towards license renewal fees, which shall be treated as advance and the payment towards the additional liability of PAL, ORS and Heritage would be for and on behalf of the aforesaid three, PAL, ORS and Heritage;

(iii) that the Mittal Group shall pay/cause to be paid the balance license   fee   (renewal   license   fee)   (i.e.   total   amount   payable   on account of TFIPL less the Seth Group share as stated hereinabove including ½ of the liability of PAL, ORS and Heritage with respect to the liability towards the renewal license fees for renewal of license numbers 34, 35 and 36 of 2007;

(iv) that Seth Group and Mittal Group to pay their respective license   renewal   fees   liability  as   above   within   two   weeks   from today without fail;

(v) that as and when PAL, ORS and Heritage contribute their share of the license fee, Seth Group and Mittal Group will be entitled to the refund of the excess license fee paid by them as provided in para 2 of the MOS dated 4.5.2015.  In the event of PAL, ORS and Heritage fail or neglect to pay the amounts due by them as aforesaid within 120 days from the date of deposit by the Seth Group, the Seth Group is authorized in its own name, to initiate appropriate legal proceedings against the defaulter/s, to the extent of the amount advanced by the Seth Group along with interest;

(vi) that   the   Seth   Group   is   liable   to   provide documents/undertakings with respect to the lands falling to their share   under   Agreement   dated   15.06.2007,   i.e.   (i)   Status   of construction/allotment of EWS Flats, and (ii) Service Plan status its drawing, estimates and its approval from HUDA, Chandigarh annexed as Annexure – 16 to the MOS dated 4.5.2015, to enable Mittal Group to apply for renewal of license. However, it is clarified that in case any indemnity, undertaking, letter and/or similar document is required to be executed after filing of the application for renewal of license, pertaining to the lands falling in the share of Seth Group under Agreement dated 15.06.2007, Seth Group shall do the needful at the earliest;

(vii) that the appropriate authority, i.e., DTCP, Haryana, shall communicate the  Seth Group as well as the  Mittal  Group  to provide/furnish the documents/undertakings with respect to the lands falling to their respective shares.   However, it is clarified that   the   liability   of   the   Seth   Group   to   provide documents/undertakings with respect to the lands falling to their share   only   and   the   liability   to   furnish/provide   the   remaining documents/undertaking with respect to the remaining lands shall be of Mittal Group.  The appropriate authority shall call for the required documents/undertakings, within a period of two weeks from   today,   so   that   further   process   for   renewal   of   license numbers 34, 35 and 36 of 2007 may take place immediately and Seth   Group   and   Mittal   Group   to   furnish   such documents/undertakings, within a period of two weeks from such demand, i.e., within four weeks from today;

(viii) that the entire exercise of renewal of license numbers 34, 35 and 36 of 2007 shall be completed within a period of eight weeks from today without fail.  The Mittal Group is hereby specifically warned not to create any further hindrances in getting license numbers 34, 35 and 36 of 2007 renewed;

(ix) the   Seth   Group   and   Mittal   Group   shall   file   specific undertaking within a period of two weeks from today, agreeing to pay the amount towards EDC liability under the new one time settlement scheme – “Samadhan Se Vikas” as computed by the District Town Planner (HQ), Directorate of Town and Country Planning, Haryana in its communication dated 17.09.2020 (as mentioned hereinabove) , and neither the Seth Group nor the Mittal Group shall dispute the said computation and they shall file   specific   undertaking   that   they   shall   make   the   payment towards their EDC liability within the time specified in the one time settlement scheme – “Samadhan Se Vikas”.

 

11. The   aforesaid   directions   are   issued   over   and   above   the directions   issued   by   this   Court   in   its   earlier   order   dated 24.04.2020.  It is specifically observed that any non­compliance of the aforesaid directions as well as the directions in the earlier order dated 24.04.2020 shall be viewed very seriously, warranting action under the Contempt of Courts Act. Interlocutory   Application   Nos.   96161/2020,   96206/2020, 68143/2020, 78952/2020 and 78953/2020 stand disposed off.

1 thought on “Supreme Court direct parties to perform their obligations under the Memorandum of Settlement and warns of Contempt in case of failure”

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