The Bombay High Court yesterday, setting aside its previous order, permitted Ferani Hotels Pvt Ltd to continue to develop and sell 460 acres of land in Malad. The court, however, asked the Gopal Raheja group to ensure that 12 per cent of all sales consideration is deposited with a designated bank account, thereby protecting the Wadias’ interest in the property.
A division bench comprising Justices Dr DY Chandrachud and RD Dhanuka, also appointed retired Justice (Retd) SK Shah to record all the sale transactions by Ferani Hotels and the evidence in the case within three months, after which a trial court will decide on the claims made by the Wadias against the Rahejas.
The Wadia group released a statement, ‘The court has categorically upheld the interpretation of third party under the Development Agreement to mean genuine/arms-length parties. This expressly does not accept the Raheja’s contention that it can sell under the agreement to their own sister companies or related Companies… The Court has also held that the preliminary issue in law has to be decided and has even set up a timeline to close the same within six months and has also provided liberty to us to apply immediately thereafter. This means that we can immediately apply for complete and broader relief such as Court Receiver to be appointed on the lands. On a study of the final judgment when it is available to us, we will comment, if required. We will approach the Supreme Court in the matter.”
Nusli Wadia (in pic), chairman of the Wadia group, and the Raheja group have been involved in the dispute since 2008 over a contract signed in January 1995. Wadia was at the time appointed administrator of the land by Bachoobai Dashkow, sister of Eduljee Framroze Dinshaw, who owned the land. Subsequently, Nusli Wadia entered into an agreement with Ferani Hotels Pvt Ltd for development of the land. Wadia would be entitled to 12 per cent of the sale value of all proceeds from the developed land.
Additionally, the Rahejas had to pay Wadia Rs 75 crore in the first 10 years of the agreement. However, in 2008, Wadia terminated the contract and filed a case alleging that the Gopal Raheja group had committed fraud by selling developed portions of the land to associate groups at below market value, denying him of the right share from the sales.