Virtuous Retail Limited vs Kakade Construction Company Pvt & ...
2016 Latest Caselaw 3081 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                             Judgment reserved on: 1st March, 2016
                           Judgment pronounced on: 29th April, 2016

+                  O.M.P. 399/2013 & I.A. No.2868/2016

       VIRTUOUS RETAIL LIMITED                ..... Petitioner
                    Through   Mr.Sanjeev Puri, Sr. Adv. with
                              Mr.Kamal       Shanker          and
                              Ms.Priyamvade Shenoy, Advs.
                        versus
       KAKADE CONSTRUCTION COMPANY PVT & ORS
                                             ..... Respondents
                    Through Mr.Sandeep Sethi, Sr. Adv. with
                            Mr.Ameya Gokhale, Mr.Dushyant
                            Manocha, Ms.Tarunima Vijra and
                            Ms.Salonee Kulkarni, Advs.
       CORAM:
       HON'BLE MR.JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J.

1. By way of this order, I propose to decide the above mentioned application on behalf of the respondent Nos. 1 and 2 under Section 151 CPC for staying the order dated 18th December, 2014 in terms of undertaking given on 23rd November, 2014.

2. With a view to complying with the provisions of the FEMA, the Respondents have commissioned valuation reports from Jones Lang and LaSalle and MZSK & Associates, whose valuation reports indicate that the shares held by the Petitioner in KCMPL are valued at a maximum of approximately Rs. 43.9 crore and Rs. 35 crore, respectively. To comply with the FEMA Regulations, the Respondents ought not to make payments

to the Petitioner for purchase of the shares of KCMPL, in excess of these amounts. However, the Respondents are ready and willing to provide a requisite Bank Guarantee, in accordance with any directions of this Court, with a view to establishing their bonafides.

3. In support of contention, it is stated that the following norms have to be followed for any such transaction:

"(a) FEMA 20/2000-RB dated 3rd May 2000 [GSR 406(E), dated 3rd May 2000]

"Regulation 10: Permission of the Reserve Bank in certain cases for transfer of security

B. TRANSFER BY WAY OF SALE NOT COVERED BY REGULATION 9 BY A PERSON RESIDENT OUTSIDE INDIA ...

... (2) A person resident outside India, may transfer shares or convertible debentures or warrants of an Indian Company, without the prior permission of the Reserve Bank, by way of sale, to a person resident in India subject to adherence to pricing guidelines, documentation and reporting requirements for such transfers as may be specified by Reserve Bank from time to time."

(b) Master Circular No. 15/2015-16 dated pt July 2015

"Clause 5: Pricing Guidelines

• Acquisition I transfer of existing shares (private arrangement)

(b) negotiated price for shares of companies which are not listed on a recognized stock exchange in India which shall not be less than the fair value worked out as per any internationally accepted pricing methodology for valuation of shares on arm's length basis, duly certified by a Chartered

Accountant or a SEBI registered Merchant Banker. Further, transfer of existing shares by Non-resident (i.e. by incorporated non-resident entity, erstwhile OCB, foreign national, NRI, FI!) to Resident shall not be more than the minimum price at which the transfer of shares can be made from a resident to a non-resident as given above."

As per the aforesaid Regulation and Circular, the Petitioners could not have transferred its shares to the Respondent at an arbitrarily agreed price (including interest or Internal Rate of Return), but was required to do so, only on the basis of a fair market valuation carried out as per the provisions of FEMA.

4. In the application, respondents/applicants have referred the order of the Bombay High Court, in the case of IDBI Trusteeship Services Limited v. Hubtown Ltd (order dated 8th May 2013 in Company Petition No. 644 of2013) ("Hubtown case"), wherein it has observed that:

".. .In any event, inasmuch as the transaction (based on return of the FDI/principal amount invested along with a fixed rate of return thereon) is not permissible/prohibited under the FD! Policy and the FEMA Regulations, neither IDBI nor FMO can seek the assistance of the Court to effectuate/implement/ enforce such a prohibited/illegal transaction."

It is hence stated that at the time that the Settlement Agreement and the Undertaking were entered into, no valuation of the shares ofKCMPL in accordance with applicable law was carried out.

5. It is alleged that pursuant to the Undertaking, Respondent No. 1 made remittances to the Petitioner, on the basis of a purported valuation report of shares prepared by one CA Manish Joshi dated 20th January, 2015, on behalf of the Petitioner to the Respondents. This report valued

the shares of KCMPL at Rs. 6263 per share, which was a gross and apparent over valuation of the shares of KCMPL. As indicated hereinabove, the Respondents have obtained two independent reports of the valuation of shares of KCMPL, which value the said shares at Rs. 2641.602 per share and Rs. 3261.72 per share respectively. It is thus apparent that the Petitioner has caused the Respondents to make remittances to the Petitioner, in violation of the applicable regulations and circulars.

The Undertaking was made in November, 2014, and the valuation report of CA Manish Joshi was obtained by the Petitioner post facto (on 20th January, 2015), apparently to match the earlier Undertaking. This purported valuation report, ought not to be relied on, inter alia on account of the following:

"•CA Manish Joshi's report is on the basis that approximately 8 acres of land is available for construction of the project. In fact, to the knowledge of the Petitioner, only approximately 6 acres of land had been transferred to KCMPL for the purposes of the project. This is correctly identified as 2,63,886 square feet in the report of MZSK & Associates and 27, 150 square metres in the report of Jones LaSalle and Lang.

• Neither the Petitioner, nor CA Manish Joshi sought any detailed information from the Respondents, such as details of land available, construction plans, etc., to provide any basis for the purported valuation. In contrast to the two other reports annexed to the IA, the report of CA Manish Joshi has minimal information for the basis of analysis.

• It is apparent that the purported valuation in the report of CA Manish Joshi, is inflated to reflect a value per share, which if multiplied by the number of shares, would reach

the amount of approximately Rs. 70 crores plus the interest at the rate of 30% per annum till March, 2016. Hence, it is clear that this report is based on a degree of reverse engineering to ensure that the value of the shares transferred matches the pre-agreed amount, in terms of the Undertaking.

• The said report of CA Manish Joshi indicates "However, we do not undertake tenability of our views in court of law" ."

6. It is stated that on or about 18th February 2016, Respondent No. 1 has received an Order from the Directorate of Enforcement, Department of Revenue, Government of India dated 18th February, 2016 under Section 37 of the FEMA inquiring into the foreign exchange transactions that Respondent No.1 has engaged in since 2005. Respondent No. 2 was informed that this inquiry only pertains to the transactions between the Respondents and the Petitioner.

Thus, it is clear that the Settlement Agreement and the Undertaking are in violation of the FEMA and the applicable Regulations, and any continued compliance with the same may potentially expose the Respondents to a penalty amounting to up to 3 times of the ascertainable amount in terms of Section 13 of the FEMA.

7. Let met first mention admitted facts in the matter.

8. Admittedly, the undertaking given on 23rd November, 2014 reads as under:-

"Irrevocable and Unconditional Undertaking of the Respondents No. 1 to 3 ("Undertaking") to this Hon'ble Court We, Mr. Sanjay Kakade, son of Shri Dattatraya Kakade resident of Kakade Paradise, Ashok Path, Erandawane, Pune (hereinafter referred to as the "Kakade Promoter"), AND

Kakade Construction Company Private Limited (hereinafter referred to as ''KCCPL"), a company promoted by Kakade Promoters, having its registered office at 1205, Kakade Capital, Shirole Road, Shivaji Nagar, Pune 411005 ("Kakade Promoter" and "KCCPL" shall be collectively referred to as the Kakade Group, which expression shall, unless repugnant to the context or meaning thereof, include their respective heirs, successors, executors and permitted assigns), the respondents No.1 to 3 herein hereby undertake and agree before this Hon'ble Court, as under:

1. That the Arbitral Award dated May 12, 2012 passed by Arbitral Tribunal comprising of Hon'ble Justices A.M.Ahmadi, Justice A.S.Anand and Justice R.C.Lahoti under the Arbitration and Conciliation Act, 1996 ("Arbitral Award''); a copy of which is attached herewith as Annexure B is valid and binding on each of us, the Kakade Group and is executable against the Kakade Group jointly and severally as a decree passed by a competent Civil Court.

The Kakade Group admits and acknowledges that all amounts payable by us under the Arbitral Award shall remain payable to Virtuous Retail Limited (formerly known as Xander Investment Holding VII Limited), a company incorporated under the laws of Mauritius, having its registered office at 3rd Floor, Roger House, 5 President John Kennedy Street, Port Louis, Mauritius ('VRL').

2. We, the Kakade Group admit that we have defaulted in making all payments as per the Arbitral Award except for an initial amount of Rs.51,00,000/- (Rupees Fifty One Lakhs) which we have paid to the counsel of VRL.

3. The Kakade Group hereby agrees and undertakes to this Hon'ble Court, that it shall make the payment of amounts under the Arbitral Award to VRL in the following manner:

i.) The Kakade Group undertakes to this Hon'ble Court that they the Kakade Group shall pay a total amount of Rs.70,00,00,000/- (Rupees Seventy Crores Only) to VRL along with interest at the rate of 18% (Eighteen Percent) p.a.

compounded quarterly with effect from date of execution of this Undertaking until the payment of entire amount along with a such interest (" Decretal Amount) through bank draft/pay order in favour of VRL of to the bank account of VRL details of which have been set out in the Arbitral Award.

ii.) The Kakade Group agrees and undertakes to this Hon'ble Court to pay to VRL the Decretal Amount in the manner set out below:

a) Rs.5,00,00,000/- (Rupees Five Crores Only) by Cheque No.177740, dtd.05.12.2014 drawn on HDFC Bank Ltd., Mayur Colony, Kothrud, Pune;

b) Rs.5,00,00,000/- (Rupees Five Crores only) by Cheque No. 177741, dtd.25.12.2014 drawn on HDFC Bank Ltd. Mayur Colony, Kothrud, Pune;

c) Rs.5,00,00,000/- (Rupees Five Crores Only) by cheque No.177742, dtd 10/01.2015 drawn on HDFC Bank Ltd. Mayur Colony, Kothrud, Pune;

d) Rs. 15,00,00,000/- (Rupees Fifteen Crores) shall be paid on or before March 15, 2015;

e) Rs.20,00,00,000/- (Rupees Twenty Crores) shall be paid on or before September 15, 2015;

f) Rs. 20,00,00,000/- (Rupees Twenty Crores) along with all interest shall be paid on or before March 15, 2016.

iii.) The Kakade Group agrees and undertakes that the time is the essence of the contract; and that all amounts payable to VRL under this Section 3 shall be made in a timely manner on or before the dates mentioned above without any defaults, delays or demur.

4. The Kakade Group agrees and undertakes that in the event the Decretal Amount is received in full by VRL in the manner agreed under Section 3 above, VRL shall record full satisfaction of the Arbitral Award/ Decree and the Arbitral Award/ Decree shall stand fully satisfied. The Kakade

Group further agree and acknowledge that VRL has agreed to receive amounts lesser than the amounts payable under the Arbitral Award at our specific request and undertaking that we shall make all payments now onwards on due date and in timely fashion. Therefore, in the event the Kakade Group fails to pay or if there is any delay in making payments of any of the amounts set out Section 3 above; within the timeless stipulated therein, for any reasons whatsoever, the Kakade Group agrees and undertakes to pay an interest of 30% (thirty percent) p.a on the amounts payable and outstanding from the expiry of the date stipulated for the payment in Section 3 above and until the date of actual payment by Kakade Group to VRL.

5. We, the Kakade Group agree, acknowledge and undertake that the KCMPL Land (as more particularly defined and described in Annexure A below) shall continue to vest with Kakade City Mall Private Limited ("KCMPL"), the Respondent No.4 herein. We, the Kakade Group further agree and undertake to this Hon'ble Court that after the execution· of this Undertaking and until the receipt by VRL of the Decretal Amount or the amounts payable under the Arbitral Award as the case may be, we, the Kakade Group agree and undertake that we shall not sell, transfer,: mortgage and, or, alienate the KCMPL Land, in any manner whatsoever. However, we understand and agree that VRL has permitted KCMPL / Kakade Group to commence and carry out construction activities only for the purposes of construction of a residential group housing or other purposes as permitted by VRL and only on such part and portions of the KCMPL Land as permitted by VRL in writing. We agree, acknowledge and undertake, that KCML may allow sell/ lease/leave & license such constructed built- up areas or mortgage such built-up areas constructed on the part of the KCMPL Land as separately permitted by VRL in writing. We, the Kakad Group agree and undertake that the above rights and entitlements to construct on the part of the KCMPL Land and has been granted by VRL to the Kakade Group on the condition that all sales /other proceeds from the

sale of such constructed area shall be received by KCMPL and shall be retained in an escrow bank account of KCMPL and shall only be utilized by KCMPL strictly for the purposes of construction (35%) payment to VRL (45%) and the remaining amount (20%) to the joint developer as appointed by KCMPL. We, the Kakade Group agree and undertake that an authorized representative of VRL shall be the authorized signatory for any bank account where the said 45% amounts for payments to VRL shall be deposited/retained. We also agree and undertake that the amounts owed to VRL and our obligation to pay VRL within the timelines stipulated in Section 3 above is not subject to or dependent in any manner whatsoever on the sale of the units/flats and on the payments received by KCMPL and, or, the aforesaid 45% amounts being received in the bank account, from the sale of units/flats/spaces in the project proposed to be undertaken on the part of the KCMPL Land as set out above.

6. Notwithstanding anything contained in 4 above, we, the Kakade Group agree that if we fail to pay the Decretal Amount in the manner agreed and within the timelines set out in Section 3 above, then no new allotments/bookings/sales/leases of the flats/units/spaces in the proposed project shall be made. We shall remain solely responsible and liable for any claims that may be raised by the flat buyers/allottees of flats/units/spaces without any recourse to KCMPL or VRL.

7. We agree that notwithstanding anything contained herein, until the Decretal Amount and of all the amounts payable under the Arbitral Award is received by VRL from us, VRL shall continue to enjoy all rights and entitlements in its entirety as set out in the Transaction Agreements and the Articles of Association of KCMPL, without any kind of dilution under the Transaction Agreements and the Articles of Association of KCMPL. We, the Kakade Group agree and undertake to this Hon'ble Court that we shall not commit any acts or omissions whereby the rights and entitlements of VRL are violated, hindered, jeopardized or conflicted in any manner whatsoever. We, the Kakade Group agree, acknowledge and undertake that the Transaction Agreements and the Articles of Association of KCMPL shall remain valid and binding on us, the Kakade Group. The Kakade Group shall comply with, and shall ensure

due compliance by KCMPL with each of the Transaction Agreements and the Articles of Association of KCMPL.

8. We agree and undertake to irrevocably and unconditionally agree to indemnify and hold VRL (and their respective directors/employees/agents/advisors/affiliates and nominee directors of VRL in KCMPL) harmless from and against any and all liabilities, losses, damages, costs, claims, actions, proceedings, judgments, settlements or expenses which may be suffered or incurred by them for all debt, liabilities or obligations of KCMPL or any operations/management and other activities of KCMPL or any non compliances by KCMPL.

9. Only upon receipt of the Decretal Amount by VRL, we, the Kakade Group shall approach the Hon'ble Delhi High Court by way of an application, with an advance notice of such application to VRL and the advocate on record of VRL, to seek appropriate order in the OMP.No. 600/2009 and OMP.No. 399 of 2013 filed by VRL before the Hon'ble Delhi High Court on the basis of this Undertaking and the Arbitral Award. We, the Kakade Group agree and acknowledge that the interim order dated October 13, 2009 passed in OMP No.600 of 2009 shall remain in force and binding on the Kakade Group until the Kakade Group has paid to VRL the Decretal Amount. Further, we, the Kakade Group agree and acknowledge that the interim order dated April 30, 2013 passed in OMP.No.399 of 2013 to maintain status quo with respect to the movable and immovable properties mentioned/specified therein shall not be applicable with respect to the sale of the shares/securities of the companies mentioned/specified therein for so long as there is no default of the Undertaking on the part of the Kakade Group. It is thus clarified here that in the event there is any default on the part of the Kakade Group of this Undertaking, the status quo shall be applicable with respect to any further/new sale, transfer etc. of the shares/securities of the companies specified/mentioned in the order dated April 30,2013 passed in OMP No. 399 of 2013. It is further clarified that the interim order dated April 30,2013 passed in OMP No.399 of 2013 to maintain status quo with respect to the movable and immovable properties mentioned/specified therein shall continue to be applicable to all other properties specified/mentioned therein. The only other modification to the above interim orders granted by the Hon'ble

High Court in favour of VRL shall be to undertake such construction activities and on such portions of the KCMPL Land, as permitted by VRL in writing. We, the Kakade Group agree and undertake to this Hon'ble Court that we shall not sell, transfer, mortgage and, or alienate any remaining portion of the KCMPL Land in any manner whatsoever or carry out any development or construction on such remaining part of the KCMPL Land until the payment of the Decretal Amount and all amounts payable under the Arbitral Award by the Kakade Group jointly and severally to VRL and receipt of the same by VRL.

10. We agree and undertake that nothing in this Undertaking shall amount to withdrawal of any of the cases, suits, proceedings, litigation or any of the orders, directions, awards passed in these suits, litigations etc. as being vacated including without limitation, the OMP No.600 of 2009 before the Delhi High Court, OMP No. 399 of 2013 before the Delhi High Court; the CP No. 17 of 2012 filed before the Company Law Board, Mumbai; the Arbitral Award etc.

11. We hereby represent warrant and undertake that: Each of us have the full power and authority to enter into, execute and deliver this Undertaking and any other deeds, documents or agreements and KCCPL has authorized Mr. Sanjay Kakade to sign the present Undertaking on behalf of all parties. The execution and delivery of this Undertaking and the performance of the transactions contemplated herein have been duly authorized by all necessary corporate or other actions. A copy of such resolution of KCCPL is also attached herewith; and Any breach or default of this undertaking by any on the Kakade Group shall be contempt of this Hon'ble Court. Unless otherwise defined herein all defined terms shall have the meaning given to such terms in the Arbitral Award."

9. The order passed on 18th December, 2014 reads as under:-

"I.A. 25650/2014 (seeking discharge) in OMP 399/2013 This is an application filed by Mr. Shailesh Madiyal, the learned counsel for the respondents seeking discharge, of his obligation, to appear on behalf of the respondents.

Since Mr. Shariq has entered appearance on behalf of the respondents, the captioned application is allowed. I.A. 25463/2014 (Exemption) in OMP 399/2013 Allowed subject to just exceptions.

I.A. 23041/2014 (u/s 151 CPC) in OMP 399/2013 The learned counsel for the petitioner seeks leave to withdraw the captioned application.

The captioned application is dismissed as withdrawn. I.A. 25462/2014 (u/s 151 CPC) in OMP 399/2013 This is an application filed on behalf of the respondents seeking directions from this court for passing appropriate orders in terms of the irrevocable and unconditional undertaking dated 23.11.2014 given by them to the petitioner herein. The irrevocable and unconditional undertaking dated 23.11.2014 is appended as Annexure A-1 to the captioned application.

The fact that a settlement had been arrived at between the parties was conveyed by Mr. Puri, the learned senior counsel for the petitioner, at the hearing held on 19.11.2014. As a matter of fact, a photocopy of the irrevocable and unconditional undertaking dated 18.11.2014 was placed on record.

I am informed that the said undertaking has undergone changes in the payment schedule, therefore, a fresh irrevocable and unconditional undertaking was filed, which as indicated above, bears a different date, that is, 23.11.2014. I have perused the irrevocable and unconditional undertaking, dated 23.11.2014. The same is lawful. Therefore, the captioned petitions and the application are disposed of in terms of the irrevocable and unconditional undertaking dated 23.11.2014. Parties will abide by the terms contained therein. OMP 399/2013 No further orders are called for in the captioned petition, in view of the orders passed in I.A.No.25462/2014.

Interim order granted on 30.04.2013, shall stand vacated. The petition be consigned to record.

I.A. No. 25644/2014 (seeking discharge) in OMP 600/2009 This is an application filed by Mr. Shailesh Madiyal, the learned counsel for the respondents seeking discharge, of his obligations, to appear on behalf of the respondents. Since Mr. Shariq has entered appearance on behalf of the respondents, the captioned application is allowed. OMP 600/2009 No further orders are called for in the captioned petition, in view of the orders passed in I.A. No. 25462/2014 in OMP 399/2013.

Interim order granted on 13th October, 2009, shall stand vacated.

The petition be consigned to record.

I.A. 3773/2010 (u/O.39 R.4 r/w S.151 CPC) in OMP 600/2009 In view of the order passed in I.A.No. 25462/2014 in OMP 399/2013, the captioned application has been rendered infructuous. The same is accordingly disposed of."

10. It is apparent that the undertaking dated 23rd November, 2014 and the order dated 18th December, 2014 passed by this Court in terms of undertaking is irrevocable and unconditional.

11. By the above said undertaking, respondent Nos. 1 to 3 undertook to make payments to the petitioner in discharge of their obligations under a Consent Award dated 14th May, 2012 passed by an Arbitral Tribunal consisting of three Former Chief Justices of India viz. Justice R.C.Lahoti, Justice A.M.Ahmadi and Justice A.S.Anand.

12. In terms of the Consent Award, the Tribunal directed the petitioner to transfer the shares of the respondent No.4 which were allotted to the

petitioner in lieu of their investment in respondent No.4 joint venture Company against the payment by the respondents of the amounts agreed to in the Consent Award.

13. The parties had agreed on the mechanism to pay the awarded amount in the Consent Award itself, which was through the sale of above shares/securities by the petitioner held by it in the respondent No.4 Company, to the respondent in accordance with the law.

14. The Consent Award became final and binding on the parties since no challenge under Section 34 of the Arbitration and Conciliation Act, 1996 was made by any party.

15. The respondents No. 1 to 3failed to make payment of the agreed amounts under the Consent Award despite the expiry of the time for payment stipulated therein.

16. It is evident that despite of Consent Award, for the last more about 3 years and 10 months is being deprived of its dues which were granted by the Arbitral Tribunal pursuant to arbitration proceedings. The said respondents furnished the aforesaid undertaking for payment of the agreed decretal amounts which amounts were lesser than the amounts agreed in the Consent Award.

17. The dispute arose between the parties sometimes in 2008 and since then the petitioner is not getting the amount against the defaults of the respondents.

18. It is also admitted position that in view of the undertaking, the respondents handed over 3 (three) post dated cheques of Rs.5 crore each dated 5th December,2014, 25th December, 2014 and 10th January, 2015 to the petitioner in this Court.

19. Two out of three post dated cheques issued by the respondents were dishonoured and returned unpaid vide Return Memo dated 24th January, 2015. The said fraudulent conduct of the respondents would show that undertaking given to this has been violated. The cheques with no intention to pay since the cheques bounced. It is evident that even after filing of the undertaking on 23rd November, 2014, the respondents dishonoured their commitments and paid a sum of only Rs.5 crores whereas the total amount due at that time was Rs.15 crores, as a consequence of which the petitioner was constrained to initiate contempt proceedings against the said respondents.

20. Pursuant to the initiation of the Contempt Proceedings in February, 2015, the respondents paid another sum of Rs.5 crores, that too, after consistent follow-up. Thereafter, on 21st December, 2015, the respondents made another payment of Rs.10 crores, which has not been remitted to the petitioner since the respondent No.1 has refused to sign requisite documents for its remittance.

21. The respondent paid further amount of Rs.10 crores on 29 th February, 2016 in terms of orders of this Court dated 21 st December, 2015 in the Contempt Proceedings and no documents for remittance of the same are executed. The respondents had assured this Court that they would pay the entire balance amount (of Rs.40 crores) along with up to date interest which at present amount to Rs.16.86 crores. Thus, a total amount of Rs.56.86 crores as on March, 2016 is still due and payable by the respondents as per the undertaking read with the Consent Award.

22. Counsel for the petitioner submits that the by way of this frivolous application, the attempt of the respondents is to escape the consequences

of contempt committed by them of the Undertaking furnished to this Court.

23. It is also stated by him that in the garb of the present application, the alleged FEMA violations, the respondent Nos.1 to 3 are attempting to do indirectly what they cannot do directly. It is submitted that through the present application, the respondent No.1 to 3 are attempting to (i) get over the Consent Arbitral Award; (ii) unilaterally resile from the irrevocable and unconditional undertaking furnished to this Court, under which the respondent Nos. 1 to 3 have received substantial concessions in their payment obligations; and (iii) overreach the order dated 18 th December, 2014 passed by this Court, disposing of the petitioner's petition for interim protection in terms of the undertaking.

24. The undertaking requires the respondents to pay a certain sum of money to the petitioner within the timeline stipulated therein (clause 3) and does not provide for any mechanism or mode for remittance of such payments to the offshore account of the petitioner. Once the respondent Nos 1 to 3 have made payments in terms of the undertaking and the Consent Order, remittance of the amount to the bank account of the petitioner will be as per the applicable law and FEMA Regulations.

25. Counsel for the petitioner has submitted that there is no provision in law for challenging or revisiting a consent arbitral award, much less after 4 years of its operation, even otherwise the said Consent Award is in compliance with the extent FEMA Regulations. As per paragraph 2.3 read with paragraph 2.2.(b) of the Annex-2 to Consolidated FDI policy effective from 12th May, 2015 issued by the Department of Industrial Policy and Promotion ("FDI Policy"), the pricing for the sale/transfer of

shares/securities by a non-resident investor (petition in the instant case) to a resident "shall not be more than the fair value to be determined by a SEBI registered Merchant Banker or a Chartered Accountant as per any internationally accepted pricing methodology on arm's length basis" and the same is being complied with by the petitioner.

26. Furthermore, based on the undertaking, in the past, between January, 2015 and March, 2015, on two separate occasions, the respondent Nos. 1 to 3have remitted a sum of Rs.10 crores to the account of the petitioner based on the same set of information and documents, including the valuation report, to which they are now raising objections as an afterthought. The said remittances were made through transfer/sale of certain equity shares of respondent No.4 held by the petitioner to the respondent No.1 and as required under the applicable FEMA Regulations, the same were based on the certificate dated 20 th January, 2015 provided by a Chartered Accountant, certifying that the fair value was arrived at as per internationally accepted pricing methodology on arm's length basis.

27. The amount undertaken to be paid by the respondents as per Clause 3 of the undertaking is in fact less than the fair value as certified by the Chartered Accountant as above and is thus in compliance with the very FEMA Regulations that the respondents are relying upon. This is what is required by the FDI Policy, which provides that the sale of the shares by non-resident to a resident shall be 'at a price not more than fair value to be determined by SEBI registered Merchant Banker or a Chartered Accountant as per any internationally accepted pricing methodology on arm's length basis.

28. In view of above, I am of the view that the respondents have not been able to satisfy the Court as to why they are not ready to comply the undertaking given to the Court and orders passed thereon. Now all the contentions are afterthought and no such relief as sought in the application can be granted in the facts and circumstances of the present case with regard to objection raised by the respondents. Thus, let the balance amount payable by the respondents, as per the undertaking, be deposited with the Registrar General of this Court for which the petitioner at this stage has no objection. The directions are passed accordingly. The amount would be released to the petitioner after all the requirements are satisfied by the petitioner.

29. The said balance amount be deposited within four weeks from today. In failure to do, an appropriate order be passed against the respondent for breach of undertaking on the next date, under these circumstances, all the Directors shall remain present in Court in person.

30. The present application is dismissed with cost of Rs.20,000/- which shall be paid by the applicant to the non-applicant before the next date.

31. List this matter on 23rd May, 2016.

32. Dasti under the signatures of the Private Secretary.

(MANMOHAN SINGH) JUDGE APRIL 29, 2016