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Legal

Updated on: Wednesday, January 05, 2022, 10:39 PM IST

FPJ Legal: Bombay HC restrains Orbit Ventures, orders takeover of flats

In its order, the HC has also reproduced the “photograph of one such builder" who claimed to have purchased a flat.
Bombay HC | Photo: Representative Image

Bombay HC | Photo: Representative Image

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Mumbai: The Bombay High Court has restrained developer Orbit Ventures from creating third party rights in respect of their personal properties in a matter related to their default in payments to Axis Finance.

A division bench of Justices SJ Kathawalla and Milind Jadhav has also directed the court receiver to take ‘forcible possession’ of all the flats in a complex developed by Orbit Ventures in a western suburb and seal them.

Besides, the HC has also directed Deputy Commissioner of Police, Zone-IX, Manjunath Singe, who was present through the video-conferencing, to extend protection/assistance to the court receiver and his officers in sealing the flats and taking possession of the same in order to maintain law and order in the complex.

The HC, in its order on January 3, observed: “We are aghast to note that some of the so-called flat purchasers who are themselves builders are moving around in the complex with revolver/s with a view to threaten those who are obstructing their entry in the subject complex.”

In its order, the HC has also reproduced the “photograph of one such builder" who claimed to have purchased a flat.

The order was passed while hearing a plea filed by Axis Financial for recovery of money in excess of Rs 100 crore from Orbit Ventures Developers and others. It had challenged the October 28, 2021 order passed by a single judge of the HC which refused to grant relief.

According to the plea, in September, 2017, Axis Financial lent a sum of Rs 130 crore to Orbit Ventures. As security, it received 12 unsold flats in a project called ‘Midcity Shikar Tower-1’, receivables from 54 flats to the tune of Rs 107 crore and a mortgage executed by Orbit for a land in Vile Parle east.

The builder then defaulted. The account was declared an NPA in December 2019, following which action was filed under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 (SARFAESI Act). A notice was issued on February 4, 2020, and the developers were restrained from alienating any of their securities.

Axis Financials approached the HC in January last year to protect its interest. Justice BP Colabawalla then recorded an undertaking of the developers’ advocates that no third-party interests would be created in respect of the nine unsold flats and that physical possession would be given.

However, only four of these flats were handed over.

Venkatesh Dhond, counsel for Axis Finance argued that the developer and others, from whom money was due, inducted third parties without consent or occupation certificates from the BMC.

The developer’s advocate, Dipesh Siroya, submitted details to the court receiver’s chartered accountant in December 2021.

However, the HC noted that the so-called details were “devoid of relevant particulars" and were nothing but an attempt by the developers to mislead the CA and the Court.

The HC has said that before it “issues suo moto (own its on) contempt against the developers”, it has directed the developers’ CA to provide all the necessary details to the court receiver’s CA.

“Without issuing a contempt notice at this stage, we are giving one more opportunity to Mr Rajen Dhruv and Mr. Hiren Dhruv (developers) to file a detailed affidavit setting out all their assets including the companies and partnerships in which they are shareholders/partners,” said HC.

The HC has also restrained the developers from obtaining any further loans against their assets (on which loans have already been taken) without prior permission of this court.

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Published on: Wednesday, January 05, 2022, 10:39 PM IST
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