Robust Hotels(P) Ltd.& Ors vs E.I.H Limited & Ors

2. These appeals along with connected appeals although emanates from two different suits filed by the same plaintiff, but the parties being common and sequence of facts being inter-related, we have heard the appeals together and they are being decided by this common judgment.

4. On 26.10.1988 EIH entered into 'Technical Services Agreement' (for short TSA) with one Balaji Construction (P.) Ltd. Predecessors-in-interest of the 3rd Respondent Balaji Hotels & Enterprises Ltd. (for short, BHEL). The agreement provided that EIH would provide its technical knowledge and skill required for operation of hotel, which was being constructed by BHEL. Another agreement on January 12, 2000 was entered between BHEL and EIH, where it was recorded that on the request of BHEL, EIH paid Rs. 9 Crores to the BHEL by way of financial accommodation which was used for construction of hotel. By supplemental agreement dated June 10, 2000, it was recorded that in total Rs. 15 Crores 12 Lacs have been received by BHEL, repayment of which is to be made within 24 months from the date of the principal agreement dated 12th June, 2000. It appears that amount could not be repaid hence another agreement was entered between EIH and BHEL on 4th February, 2002. The agreement recorded that, it has now been mutually agreed by the BHEL and EIH that EIH will no longer participate in the hotel operations hence the Technical Service Agreement will be terminated. EIH, further stipulated that No-Objection to BHEL shall be given for selling, leasing or otherwise transferring the hotel unit to any other company whether subsidiary or not, or to any other company or entity either directly or indirectly or otherwise. It was further agreed that BHEL shall refund the amount of Rs. 15.12 Crores alongwith interest.

6. On the same day, a Letter of Guarantee was issued by Balaji Industrial Corporation Ltd. the 4th Respondent in this appeal, unconditionally, absolutely and irrevocably guaranteeing the payment of Rs. 15.12 Crores, in the event, BHEL did not paid the subject amount of Rs. 15.12 Crores within 31st December 2002.

7. The BHEL had obtained financial assistance from IFCI, the 7th Respondent and and Tourism Finance Corporation of India Ltd., the 8th Respondent. EIH came to know that Tourism Finance Corporation India Ltd. (for short TFCI) had issued advertisement inviting offer for take over (joint venture) sale of hotel project of BHEL. The EIH wrote to TFCI on 8th September, 2002 informing about the agreements entered between EIH and BHEL and further stating that till sum of Rs. 15.12 Crores along with interest is not refunded EIH would have the exclusive right to operate the hotel. BHEL on 8th June, 2004 acknowledged and confirmed the principal sum of Rs. 15.12 Crores being outstanding as per books of accounts of March 31st, 2004 with interest. A suit in the High Court of Madras being C.S. No. 257 of 2005 was filed by EIH against BHEL and others praying for following reliefs:

10. Proceeding under Sarfaesi Act, 2002 proceeded and the hotel asset of BHEL was transferred in favour of one Robust Hotels (P.) Ltd.(the appellant in C.A.Nos.....of 2016 (arising out of SLP © No. 23410-11 of 2011). A transfer deed dated 5th July, 2007 was issued by IFCI and TFCI in favour of Robust Hotels (P) Ltd. (hereinafter referred to as Robust Hotels). All the land, together with erections, plant and machinery were transferred to Robust Hotels. EIH filed an application in November, 2009 for impleadment of Robust Hotels in C.S. No. 257 of 2005 although the impleadment was opposed but was allowed by learned Single Judge vide judgment dated 23rd March, 2010. The Appellant Nos.1 to 4 in SLP (C) No. 23410-11 of 2011 were impleaded as Defendant Nos. 8 – 11 in C.S. No. 251 of 2005. Letters Patent Appeal against the said judgment was also dismissed by Division Bench on 22nd October, 2010. The Robust Hotels unsuccessfully challenged the order of the Division Bench before this Court by filing an S.L.P., which was also dismissed on 7th January, 2011.

11. C.S. No. 257 of 2005 was renumbered as O.S.No. 12159 of 2010. An IA was filed by EIH being IA No. 22846 of 2010. By the aforesaid IA No. 22846 of 2010 the plaintiff prayed for an order, restraining Robust Hotels from having the construction of the hotel unit or from doing, acting or taking steps contrary to or in derogation of the rights of the plaintiff under the Technical Services Agreement and other agreements. The application was rejected by learned Single Judge vide judgment and order dated 9th March, 2011, challenging the aforesaid order 9th March, 2011, an appeal being C.M.A. No. 798 of 2011 was preferred. The Division Bench of this Court decided the appeal being C.M.A. NO. 798 of 2011 and M.P. No. 1 of 2011 and issued certain directions vide its judgment and order dated 26th July, 2011. C.A.Nos.......of 2016 (arising out of SLP(C) No.23410-11 of 2011) have been filed against aforesaid Division Bench judgment and order dated 26th July, 2011 by the Robust Hotels and other three defendants.

12. These appeals have been filed by EIH Ltd. and Oberoi Hotels against judgment and final order dated 13th March, 2012 passed by the High Court of Madras in O.S.A. No. 419 of 2011 and M.P. No. 1 of 2011. While noticing the facts in the appeals filed by Robust Hotels, we in the proceedings paragraphs have noted the facts which are also relevant for understanding the issues raised in present appeals. The appellants EIH and Oberoi Hotels filed a suit, being C.S. No. 164 of 2011 before the High Court of Madras praying for a declaration that Deed of Transfer dated 5th July, 2007 entered into between IFCI Ltd. and TFCI on one part and the Robust Hotels (P.) Ltd. on another part, and the certificate of sale of immovable property dated 6th July, 2007 are illegal and null & void and of no effect and not binding. A perpetual injunction was also prayed for, restraining the defendants whether by themselves, their servants, agents or otherwise howsoever from purporting to act, to give effect to or taking any steps in furtherance of the purported deed of transfer dated July 5, 2007 and the certificate of sale of movable and immovable property also dated July 5, 2007 or from enforcing the same in any manner whatsoever.

14. O.A. No. 233 of 2011 in C.S. No. 164 of 2011 filed by EIH and Oberoi Hotels praying for injunction was dismissed by learned Single Judge vide Order dated 8th August 2011. By the same order, learned Single Judge also dismissed the Contempt Petition (C)No. 647 of 2011 filed by EIH and Oberoi Hotels. Challenging the order passed by the learned Single Judge dated 8th August, 2011 Letters Patent Appeal was filed by EIH and Oberoi Hotels being O.S.A. No. 419 of 2011. The Division Bench by the Order dated 13th March, 2011 dismissed the appeal, challenging which order the C.A. Nos.....of 2016 (arising out of Special Leave Petition (C) Nos. 17742-43 of 2012) has been filed by EIH and Oberoi Hotels.

and ors. are dismissed.