Canadian bizman Jamal drags Shobhit Rajan to SC in prime Real Estate case

Apex Court admits the petition on the same day and allows wealthy Canadian businessman Alnoor Jamal to be on JV Board

NEW DELHI, January 19, 2015: In a new turn to the ten-year-old dispute over erstwhile Parke Davis’ prime commercial real estate stretching into 13 acres at Saki Naka in Mumbai, the Supreme Court today has directly admitted a Special Leave Petition (SLP) challenging Bombay High Court and Company Law Board orders that had asked a wealthy Canadian businessman to exit the joint venture company that was formed to develop the property.

The Canadian businessman Alnoor H Jamal, based out of Africa, through his fully owned Akkadian Housing Infrastructural Pvt. Ltd entered into a 50:50 JV partnership with Mumbai-based Shobhit Rajan to a float company called Pantheon Infrastructure Pvt. Ltd for developing the property after acquiring the land from Parke Davis way back in 1999.

In March 2001, Pantheon Infrastructure completed the acquisition of the property after paying full consideration, which also included funds arranged through banks and financial institutionsand proceeded to develop the three phases in the name of Raiaskaran Tech Park (Logitech Park).

Disputes arose subsequently as Rajan allegedly coaxed Jamal to dilute his equity share from time to time on the pretext of bringing in independent persons to develop the property. Jamal’s complaint is that his company share was illegally diluted to 28.33% and he was unceremoniously thrown out of the Pantheon Board of Directors in November 2004 after he complained of several acts of financial mismanagement.

Challenging this, Jamal and his Akkadian Housing, filed a Petition before the Company Law Board (CLB). The CLBin its final judgment and order dated January 8, 2009 returned its own findings on oppression and mismanagement and granted a ‘no fault’ relief. CLB also ordered a compensation of 4.35% of the profits arising out of the value of the land, and not the developed property, as a “just and reasonable return on the investment” made by Jamal. Later, the CLB increased the compensation to 6.6% of the profit on land value on account of the fact that the petition was pending for three years.

Being aggrieved and dissatisfied by the CLB ruling, the Petitioners moved Bombay High Court. The High Courttoo by its final order of October 21 last year dismissed Jamal’s appeal and affirmed the ‘no fault’ relief granted by the CLB.

The petitioners thus filed a SLP in the Supreme Court against Bombay High Court’s judgment naming Rajan and 14 others as respondents.

The SLP said that the High Court Judgment is antithetical to the laws settled by the Supreme Court and is incompatible with the existing corporate law jurisprudence.“The perpetuation of the Impugned Judgment would have far reaching consequences as it alters certain inviolable principles of corporate law and also the fundamental rights relating to ownership of property and law relating to its deprivation,” it said.

“The decision in this case would have a direct impact on the fate of almost all corporate disputes between promoters and private equity and especially venture capital funds in India”, said Jamal’s lawyer in the Supreme Court,Sajid Mohamed, Managing Partner of Mumbai-based strategy law firm Agrud Partners (formerly, PDS & Associates).

In its order yesterday, the top court’s three-judge bench of Justice Anil R. Dave, Justice Shiva Kirti Singh and Justice Adarsh Kumar Goel also allowed Jamal to be invited to the Board of Pantheon.

Senior Advocates Gopal Subramaniam and Dr Abhishek Manu Singhvi appeared along with Sajid Mohamed and Aman Vachher for Jamal.

 

About the Author

Sachin Murdeshwar
Sachin Murdeshwar is a Sr.Journalist and Columnist in several Mainline Newspapers and Portals.He is an ardent traveller and likes to explore destinations to the core.