SUNAIR HOTEL LTD. Vs. VLS FINANCE LTD.

JUDGEMENT

(1.) The present order proposes to deal with the preliminary objections raised by the Respondent in these two petitions - OMP (Comm.) Nos. 16 and 17 of 2016 - that being fundamentally defective and time-barred, they ought to be dismissed in limine.

(2.) These two petitions, under section 34 of the Arbitration and Conciliation Act 1996 ('Act'), challenge the impugned Award dated 18th July, 2015 passed by the Sole Arbitrator. OMP (Comm.) No. 16/2016 has been filed by Sunair Hotel Ltd. ('SHL') whereas OMP (Comm.) No. 17/2016 has been filed by Mr S.P. Gupta (Petitioner No.1) and his two sons Mr Kaveen Gupta and Mr Vipul Gupta (Petitioner Nos. 2 and 3 respectively) (hereafter collectively referred to, where the context requires, as 'Guptas'). The Respondent in both these petitions is VLS Finance Ltd. ('VLS'). Background facts

(3.) The background facts (according to SHL) are that SHL was allotted land by NDMC in 1982 for the construction of a hotel. A supplemental licence deed was executed between SHL and NDMC in 1988. On 10th July 1990 NDMC cancelled the licence. SHL filed a writ petition challenging the cancellation. By an interim order dated 30th March 1992 in the said petition, possession of the land was restored to SHL. Meanwhile in 1993 Aeroflot approached 'SHL' to develop the Hotel, through a joint-venture company and for which a 100% subsidiary company i.e. Sunaero Ltd. (hereafter 'Sunaero') was incorporated. A Memorandum of Understanding (MoU) dated 17th June 1993 was executed by SHL and Aeroflot. As per the said MOU, Aeroflot was to arrange entire finance for the hotel project. The contribution by SHL and its promoters, the Guptas, was the land i.e. equity against land. Equity shared would be in the ratio 51:49.