Case: ASHISH SETH Vs. SUMIT MITTAL AND OTHERS

agreed between the parties and as prayed, the MoS dated 04.05.2015 became a part of the order and this Court directed the parties to adhere to the terms and conditions of the settlement and the undertakings given therein. This Court specifically further observed that every facet of it shall tantamount to an order of this Court and in case of failure the parties shall be at liberty to move this Court for an appropriate direction. Thus, as per the MoS and even as per the order passed by this Court dated 05.05.2015, all the parties to the MoS shall have to comply with and/or fulfill their respective obligations as mentioned in the MoS dated 04.05.2015. As observed hereinabove, the disputes were commercial disputes and therefore all the parties to the disputes agreed to resolve all their disputes, which culminated into the MoS and thereafter the order passed by this Court. 9. The entire object and purpose of entering into the settlement was to resolve all the disputes between the parties. Therefore, it is the duty of the Court that the settlement entered into between the parties and the consent order passed by this Court should be given effect to in its letter and spirit. All the parties to the consent terms are required to fully comply with the terms of settlement/consent terms and the consent order. One party cannot be permitted to say that that portion of the settlement which is in their favour be executed and/or complied with and not the other terms of the settlement/consent terms/consent order. 9.1 From the facts narrated hereinabove and even otherwise considering the relevant clauses of the MoS and the obligations to be fulfilled by the respective parties to the MoS, it appears that Seth Group have fully complied with their obligations, except deposit of the total amount of Rs.25.27 crores - payment to DTCP towards initial liability of Rs.59.05 crores of TFIPL. It appears that Seth Group have already paid Rs.9.40 crores against the total libaiility of Rs.25.27 crores towards EDC liability against the total liability of Rs.59.05 crores of TFIPL as per Clause 1.2. It appears that the balance amount is not deposited by the Seth Group as the Mittal Group have not fulfilled their obligations under the MoS. It is stated at the bar that the Seth Group is always ready and willing to fulfill their obligations in terms of the MoS, i.e. their liability as per Clause 1.2, subject to Mittal Group fulfill its obligations. From the material on record, it appears that the Mittal Group have not fulfilled their obligations as per Clause 1.2, Clause 5.3 and Clause 8. Neither the Mittal Group nor TFIPL have deposited the balance amount to be paid towards EDC liability of Rs.59.05 crores (deducting Rs.25.27 crores to be paid by the Seth Group as per Clause 1.2). It is the case on behalf of the Mittal Group that it is the liability of the TIDCO and not the Mittal Group and in the MoS there is no specific term and the obligation that the said amount is to be paid by the Mittal Group. It is required to be noted that all the terms and conditions/obligations of the Seth Group, Mittal Group and TFIPL are required to be read conjointly. The license Nos. 34, 35 and 36 of 2007 are required to be transferred in favour of Seth Group. It appears that TFIPL acquired some land at Sector 70 and some 48.03 acres of land at Sector 89, Faridabad. TFIPL also availed licenses Nos. 34, 35 and 36 from the competent authorities in the year 2007 in respect of land bearing at Sector 89 with an intent to develop the Sector 89 land. Subsequently, however , both the parties – Seth Group and Mittal Group agreed that it would be the best that the development of the said land be divided and carried out separately and thereupon the development rights in the Sector 89 land parcel of 48.03 acres of land belonging to TFIPL was sold in the manner mentioned as under: table The liability of Rs.59.05 crores was with respect to the entire land – 48.03 acres at Sector 89, Faridabad. Therefore, the liability of the Seth Group would be with respect to their share out of 48.03 acres which, as agreed between the parties, would come to Rs.25.27 crores and therefore the balance is naturally required to be paid by Mittal Group/TFIPL. Unless and until the entire amount is deposited with the DTCP towards EDC, the aforesaid licenses cannot be renewed and after renewal they are required to be bifurcated and transferred. As the Mittal Group has refused to deposit the balance amount of EDC (after deducting Rs.25.27 crores which is the liability of Seth Group as per Clause 1.2), the licenses are not being renewed thereafter. If the contention and the submission on behalf of the Mittal Group is accepted, in that case, the entire MoS would be unworkable and the purpose and object of the MoS to resolve all the disputes would be frustrated. As the Mittal Group has not fulfilled its obligations it appears that the Seth Group has not deposited the balance amount of EDC liability. At this stage, it is required to be noted that as per Clause 5.8 Mittal Group shall not resign from the Board of Directors of TFIPL and shall not transfer majority/controlling shareholding in TFIPL till renewal of licenses. As per the case of Seth Group, Mittal Group have retired from the Directorship of TFIPL and the balance sheet since then is being signed by the proxies. 9.2 As observed hereinabove, as per the MoS dated 04.05.2015 and even as per the order passed by this Court 05.05.2015, all the parties to the MoS are bound to fulfill their respective obligations. As observed hereinabove, Seth Group have fulfilled their obligations, except the payment of DTCP i.e. Rs.25.27 crores as per Clause 1.2 of the MoS (except Rs.9.49 crores which is paid).

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]8.1 At the outset, it is required to be noted that as such the present proceedings are filed by the respective parties to the MoS dated 04.05.2015, which subsequently was made the order passed by this Court dated 05.05.2015 to initiate appropriate proceedings against each other under the provisions of the Contempt of Courts Act. It is not in dispute that all were parties to the MoS/consent order9. The entire object and purpose of entering into the settlement was to resolve all the disputes between the parties. Therefore, it is the duty of the Court that the settlement entered into between the parties and the consent order passed by this Court should be given effect to in its letter and spirit. All the parties to the consent terms are required to fully comply with the terms of settlement/consent terms and the consent order. One party cannot be permitted to say that that portion of the settlement which is in their favour be executed and/or complied with and not the other terms of the settlement/consent terms/consent order9.1 From the facts narrated hereinabove and even otherwise considering the relevant clauses of the MoS and the obligations to be fulfilled by the respective parties to the MoS, it appears that Seth Group have fully complied with their obligations, except deposit of the total amount of Rs.25.27 crores - payment to DTCP towards initial liability of Rs.59.05 crores of TFIPL. It appears that Seth Group have already paid Rs.9.40 crores against the total libaiility of Rs.25.27 crores towards EDC liability against the total liability of Rs.59.05 crores of TFIPL as per Clause 1.2. It appears that the balance amount is not deposited by the Seth Group as the Mittal Group have not fulfilled their obligations under the MoS. It is stated at the bar that the Seth Group is always ready and willing to fulfill their obligations in terms of the MoS, i.e. their liability as per Clause 1.2, subject to Mittal Group fulfill its obligations. From the material on record, it appears that the Mittal Group have not fulfilled their obligations as per Clause 1.2, Clause 5.3 and Clause 8. Neither the Mittal Group nor TFIPL have deposited the balance amount to be paid towards EDC liability of Rs.59.05 crores (deducting Rs.25.27 crores to be paid by the Seth Group as per Clause 1.2). It is the case on behalf of the Mittal Group that it is the liability of the TIDCO and not the Mittal Group and in the MoS there is no specific term and the obligation that the said amount is to be paid by the Mittal Group. It is required to be noted that all the terms and conditions/obligations of the Seth Group, Mittal Group and TFIPL are required to be read conjointly. The license Nos. 34, 35 and 36 of 2007 are required to be transferred in favour of Seth Group. It appears that TFIPL acquired some land at Sector 70 and some 48.03 acres of land at Sector 89, Faridabad. TFIPL also availed licenses Nos. 34, 35 and 36 from the competent authorities in the year 2007 in respect of land bearing at Sector 89 with an intent to develop the Sector 89 land. Subsequently, however , both the parties – Seth Group and Mittal Group agreed that it would be the best that the development of the said land be divided and carried out separately and thereupon the development rights in the Sector 89 land parcel of 48.03 acres of land belonging to TFIPL was sold in the manner mentioned as under:The liability of Rs.59.05 crores was with respect to the entire land – 48.03 acres at Sector 89, Faridabad. Therefore, the liability of the Seth Group would be with respect to their share out of 48.03 acres which, as agreed between the parties, would come to Rs.25.27 crores and therefore the balance is naturally required to be paid by Mittal Group/TFIPL. Unless and until the entire amount is deposited with the DTCP towards EDC, the aforesaid licenses cannot be renewed and after renewal they are required to be bifurcated and transferred. As the Mittal Group has refused to deposit the balance amount of EDC (after deducting Rs.25.27 crores which is the liability of Seth Group as per Clause 1.2), the licenses are not being renewed thereafter. If the contention and the submission on behalf of the Mittal Group is accepted, in that case, the entire MoS would be unworkable and the purpose and object of the MoS to resolve all the disputes would be frustrated. As the Mittal Group has not fulfilled its obligations it appears that the Seth Group has not deposited the balance amount of EDC liability. At this stage, it is required to be noted that as per Clause 5.8 Mittal Group shall not resign from the Board of Directors of TFIPL and shall not transfer majority/controlling shareholding in TFIPL till renewal of licenses. As per the case of Seth Group, Mittal Group have retired from the Directorship of TFIPL and the balance sheet since then is being signed by the proxies9.2 As observed hereinabove, as per the MoS dated 04.05.2015 and even as per the order passed by this Court 05.05.2015, all the parties to the MoS are bound to fulfill their respective obligations. As observed hereinabove, Seth Group have fulfilled their obligations, except the payment of DTCP i.e. Rs.25.27 crores as per Clause 1.2 of the MoS (except Rs.9.49 crores which is paid).