HC Quashes Sale of Park Hy­att in Goa to ITC

Court has also al­lowed the Hy­att’s orig­i­nal owner, Blue Coast, to re­tain phys­i­cal pos­ses­sion of the prop­erty

The Economic Times - - Companies -

Divya Sathya­narayanan & Maulik Vyas

Mum­bai: The Bom­bay High Court has quashed the sale of lux­ury prop­erty Park Hy­att in Goa to ITC by lender In­dus­trial Fi­nan­cial Cor­po­ra­tion of In­dia. Ear­lier, Kolkata-based to­bacco-to-ho­tel con­glom­er­ate emerged as the high­est bid­der of the prop­erty in Fe­bru­ary last year from the IFCI for .₹ 515 crore.

How­ever, the auction was chal­lenged by it’s orig­i­nal owner Blue Coast Ho­tels, with the ar­gu­ment that the price quoted by the top bid­der ITC was not even half the mar­quee prop­erty’s value. The New Delhi-head­quar­tered Blue Coast Ho­tels has said in a fil­ing to ex­change that, “The court has quashed and set aside the or­der of the DRAT and or­der of the (DM – South Goa) and it has also can­celled the sale cer­tifi­cates is­sued to the auction pur­chaser by the se­cured lender in re­spect of ho­tel prop­erty “Park Hy­att Goa Re­sort & Spa” un­der SARFAESI Act 2002,”.

How­ever, the di­vi­sion bench of the Bom­bay High Court, com­pris­ing Jus­tice Anoop Mo­hta and Jus­tice AA Sayed, has given six weeks time to ITC and IFCI from the date of pass­ing of an or­der to chal­lenge it fur­ther in the Supreme Court. The court had pro­nounced the or­der on March 23.

In the over 165 pages vo­lu­mi­nous or­der, the court has also al­lowed the Blue Coast to re­tain phys­i­cal pos­ses­sion of the prop­erty and has en­ti­tled ITC to get the re­fund of the amounts paid to IFCI.

The 250-room ho­tel in Goa — the first Park Hy­att in In­dia — stands on about 45 acres with a built up area of 25,812 sq me­ters.

ITC Ho­tels did not wish to of­fer any com­ments for the story. An email query sent to IFCI did not elicit any re­sponse. A spokesper­son for Blue Coast Ho­tels could not be reached de­spite re­peated texts and calls. Blue Coast had mort­gaged the prop­erty with IFCI against loan taken for its ex­pan­sion pro­grammes. How­ever, the lender put it on sale af­ter the com­pany de­faulted on loan pay­ments. Blue Coast had protested the sale of Park Hy­att Goa stat­ing that the ac­tual value of the prop­erty was around .₹ 1,250 crore and that there was some kind of col­lu­sion be­tween lender and ITC. The same is noted by the Bom­bay High Court in its judge­ment.

“The in­fer­ence of col­lu­sion be­tween IFCI and ITC can­not be ruled out, par­tic­u­larly when the other bid­ders may not have come for­ward as there was no phys­i­cal pos­ses­sion be­ing handed over at the time of the sale. It re­sulted in the prop­erty not fetch­ing its po­ten­tial mar­ket pur­chase price and ITC was the sole bid­der who bid only .₹ 1,000/ more than the re­served price,” said the or­der.

Blue Coast also al­leged that the loan amount was re­called pre­ma­turely by IFCI and was against the loan agree­ment signed be­tween the two par­ties.

IFCI had taken pos­ses­sion of the prop­erty un­der the Sarfaesi Act in June 2013 af­ter the Blue Coast ho­tels de­faulted on loan pay­ments. Blue Coast Ho­tels, a listed firm pro­moted by Sushil Suri of Morepen Labs, had taken debt from IFCI to build other ho­tels that in­cludes the MGM Grand Delhi and Sher­a­ton Ho­tel in Chandi­garh and Am­rit­sar. The com­pany had mort­gaged the Park Hy­att Goa to take the loan.

ON BID­DERS The in­fer­ence of col­lu­sion be­tween IFCI and ITC can­not be ruled out, par­tic­u­larly when the other bid­ders may not have come for­ward as there was no phys­i­cal pos­ses­sion be­ing handed over at the time of the sale HC’SORDER

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