Sunteck Realty Ltd is set to acquire BSE-listed troubled developer Orbit Corp. Ltd’s property Baug-E-Sara situated in the Malabar Hills area for around Rs34.20 crore.
On Tuesday, Mumbai-based Sunteck Realty deposited 10% or Rs3.42 crore in the Bombay high court for the entirety of right, title and interest of Orbit Dwelling Pvt. Ltd, a subsidiary of Pujit Aggarwal controlled-Orbit Corp.
Justice G.S. Patel, while delivering an order on 8 February, also directed Sunteck Realty to deposit the remaining amount within eight weeks or by 9 April.
This is a major relief for the promoters of beleaguered Orbit Corp., who were facing attachment of properties and a travel ban by the Bombay high court after another Mumbai-based real-estate company Vardhman Developers Ltd had approached the Bombay high court to recover around Rs118 crore from the company.
On 8 February, the lawyers representing Orbit Corp. informed the court that Sunteck Realty for the entirety of the right, title and interest of Orbit Dwelling for Rs34.20 crore.
“Orbit owes over Rs160 crore including interests. With this development, some amount will come to the company but we are still pursuing the case since a major chunk is yet to recover,” said Dipesh Vardhan, director of Vardhman Developers. “We can’t divulge further details since the matter is still subjudice,” he added.
As per the company’s August 2011 annual report, Orbit Corp. had spent around Rs80 crore to acquire Baug-E-Sara building situated at the Napeansea Road in Malabar Hills area of South Mumbai.
In October last, Vardhman Developers, had approached the court to recover its dues from Orbit and at that time the court had directed Orbit Corp. not to sell any moveable or immoveable properties, except in the ordinary course of business.
Email queries to Orbit Corp. as well as Sunteck Realty remain unanswered till the time of writing the story.
The genesis of the dispute between the two developers lies in the agreement of 2007. Under the agreement, Vardhman had transferred its rights over a land parcel of over 4,700 square metres in Lower Parel, in central Mumbai, to Orbit to construct a building. In lieu of this, Vardhman was supposed to get 21,676 sq.ft carpet area,along with 2,142 sq.ft terrace, between the 47th and 57th floors in the building along with parking space for 30 cars.
But trouble started between the parties after Orbit delayed compliance of its obligations and authorities gave it permission to build the structure to 25 floors only. According to the petition filed by Vardhman, both the parties agreed through consent terms in May 2015 that Pujit Aggarwal-promoted Orbit would seek permission from the Municipal Corporation of Greater Mumbai to build 58 floors and will hand over the promised area to Vardhman within six months.
As per the agreement, this period could be extended for six months, but in the case of failure, Vardhman was to get 18% interest along with Rs118 crore liquidation damages. Under the agreement, if Orbit failed to get the necessary approvals within a year and the extended six months, it had to pay Rs40 crore by May 2016 and Rs39 crore by the end of each quarter.
According to the plea filed by Vardhman, Orbit gave post-dated cheques to it but when it initiated the process to cash in the cheque after the deadline, the bank accounts of Orbit were blocked.
Source: Mint