Gurgaon’s Rs 700-crore plot: Punjab and Haryana HC sets aside order directing HSVP to deposit Rs 123.77 crore

Now, in an order dated November 12, copy of which was accessed by The Indian Express recently, Justice Virinder Aggarwal ruled that considering that the property worth more than Rs 700 crore already stands encumbered by conditions restraining alienation or transfer, the interests of the respondent–plaintiff could have been adequately protected by the creation of a charge over the suit property for an amount equivalent to 25 per cent of the bid amount, rather than by requiring the appellant to furnish separate security.

“Accordingly, the impugned order is modified to that extent. A charge shall stand created over the suit property, to the extent of 25 per cent of the bid amount, during the pendency of the appeal, and the condition requiring the appellant (HSVP) to furnish independent security for the said amount is hereby set aside. The petition is thus allowed to the aforesaid extent,” the court ordered.

The contentious land

HSVP issued a Letter of Interest (LoI) for Site No. 4 in Sector 43 at Urban Estate Gurgaon, measuring 3.53 acres, on May 19, 2022. Lekh Buildtech deposited Rs 123.77 crore with HSVP as part payment. Final sale consideration of the site was for Rs 495.11 crore (approximately). In May 2022, the company, however, found that the land’s size was 3.14 acres only.

A wine shop also existed on the land. That was the beginning of the dispute between the company and HSVP. While the company kept raising the issue of erroneous measurement of the land, seeking demarcation, physical possession of the site, allotment letter issued and possession handed over.

HSVP, on the other hand, insisted that the petitioner either deposit 75 per cent of the remaining payment within 120 days of issuance of the LoI or provide a bank guarantee to allow the company to submit the balance payment in six half-yearly instalments. The issue continues to be entangled in legal battle, while the plot is not being put to use for which the real estate company bid it.

Legal tangle

A cancelled LoI for a plot worth over Rs 700 crore (bid amount was Rs 495 crore), a forfeited amount of Rs 123.77 crore, and an allegedly wrongly-measured commercial plot in the heart of Gurgaon are what Lekh Buildtech wanted to get reversed from HSVP from November 2022. Before July 28, the company pursued the case in multiple courts over three years.

Eventually, Ramesh Chander, the then Civil Judge (Senior Division), Gurgaon, passed an order on July 28 that read, “It is hereby directed that cancellation of LoI dated May 19, 2022, and forfeiture of 25 per cent of bid amount by defendant (HSVP) is arbitrary, unilaterally not as per law, hence not binding upon plaintiff (real estate company).”

“Hence, defendant is directed to issue revised LoI as per reduced area i.e. 3.14 acres of suit land reducing the bid amount in proportion to reduced area within 30 days from the date of deposit of ad-valorem court fee and in the interest of equity and justice, give one fair opportunity to plaintiff to deposit the balance of 75 per cent of reduced bid amount as per 31 Clause of Policy dated March 28, 2022, and after making of 100 per cent payment, issue the necessary document(s) to the plaintiff namely, allotment letter and conveyance deed etc.”

HSVP, however, did not release the forfeited amount of Rs 123 crore and moved the First Appellate Authority on October 1, in appeal.

What did First Appellate Authority order?

“The appellant (HSVPP) shall file an undertaking before this court that it shall not alienate, transfer, part with possession of, or create any third-party rights or interest in respect of the suit property during the pendency of the appeal and that the appellant shall also maintain the status quo in relation to the nature, character, and use of the suit land during the pendency of the appeal…” the First Appellate Authority ordered.

“… the appellant shall submit an affidavit disclosing the current status of the suit property and any encumbrance, if any, within two weeks from passing of this order; and the appellant shall also furnish security within two weeks to the satisfaction of this court for an amount equivalent to 25% of the original bid amount, already deposited, to safeguard the respondent’s interests in the event of dismissal of the appeal,” it added.