Holding

The Court held that the Mittal Group and TFIPL are in contempt for willful non‑compliance of the MoS obligations and ordered them to comply within two months, while dismissing the contempt petitions against the Seth Group.

Summary

The dispute arose between the Seth Group and the Mittal Group, partners in a joint venture (TFIPL) that owned land in Sector 89, Faridabad. The parties executed a Memorandum of Settlement (MoS) on 4 May 2015, allocating the External Development Charges (EDC) liability of Rs.59.05 crore between them, with the Seth Group responsible for Rs.25.27 crore and the Mittal Group for the balance, and imposing obligations such as license renewal, issuance of a General Power of Attorney, board resolutions and bifurcation of licences. The Seth Group alleged that the Mittal Group deliberately failed to fulfil these obligations, constituting contempt of the Supreme Court’s order incorporating the MoS; the Mittal Group counter‑claimed that the Seth Group had not paid its share of EDC and also sought contempt relief. The Court examined the terms of the MoS, the parties’ compliance, and the effect of a later RERA order, concluding that the Mittal Group and TFIPL were in contempt for wilful non‑compliance, while the Seth Group’s contempt petition was unsubstantiated. The Court therefore listed Contempt Petition No. 34/2016, dismissed the other contempt petitions, and granted the Mittal Group two months to fulfil its obligations, failing which further contempt proceedings would follow.

Issues considered

The extent to which the Mittal Group and TFIPL have wilfully failed to comply with the obligations under the MoS and the Supreme Court’s order, attracting contempt under the Contempt of Courts Act.
Whether the Seth Group is in contempt for alleged non‑payment of its EDC liability as stipulated in the MoS.
The impact of the subsequent RERA order on the pending contempt petitions.
The precise obligations of the parties under the MoS concerning EDC payment, licence renewal, issuance of GPA, board resolutions and bifurcation of licences.
The appropriate relief, including dismissal of certain contempt petitions and direction to comply, that the Court should grant.

Legislation cited

Code of Criminal Procedure, 1973s. Section 482
Constitution of Indias. Article 32
Contempt of Courts Act
HUDA Act
Real Estate (Regulation and Development) Act

Subjects

Contempt of CourtMemorandum of SettlementExternal Development ChargesJoint Venture disputeLicense renewalLand developmentSupreme CourtArticle 32RERAHUDA

Judgment

412 [2020]REPORTS
SUPREME COURT 9 S.C.R. 412 [2020] 9 S.C.R.

A ASHISH SETH
v.
SUMIT MITTAL AND OTHERS
(Contempt Petition (C) No. 34/2016)
B IN
(Writ Petition (Criminal) No.5/2015)
APRIL 24, 2020
[ASHOK BHUSHAN AND M. R. SHAH, JJ.]
C
Contempt of Court – Dispute in the instant case was between
the two groups of a Joint Venture (JV) Company – Seth Group and
Mittal Group – The JV Company had acquired some land including
Sector 89, Faridabad and also availed licences from competent
authorities with an intent to develop Sector 89 land – Subsequently,
D both the groups agreed that development in the said land be divided
and carried out separately and thereupon the development rights
in Sector 89 were sold – Dispute arose between both the groups in
respect of payment of liabilities out of the JV Company which gave
rise to various litigations including Writ Petition 5/2015 and 11/
2015 – Dispute was referred to arbitration – Memorandum of
E Settlement (MoS) dated 04.05.2015 was executed between the Seth
Group, Mittal Group and JV Company whereunder both the groups
were to fulfill the reciprocal obligations – Writ Petition 5/2015 was
disposed of in terms of MoS dated 04.05.2015 – In the Contempt
Petitions filed by Seth Group, the grievance of Seth Group was that
F Mittal Group failed to comply with the obligations under the MoS
and the order passed by the Court and the non-compliance was
wilful and intentional – Held: In view of the relevant clauses of the
MoS and the obligations to be fulfilled by the respective parties to
the MoS, Seth Group fully complied with their obligations, except
deposit of the total amount of Rs.25.27 crores - payment to DTCP
G towards initial liability of Rs.59.05 crores of JV Company – Seth
Group already paid Rs.9.40 crores against the liability of Rs.25.27
crores towards EDC liability against the total liability of Rs.59.05
crores of JV Company as per Clause 1.2 – The balance amount was
not deposited by the Seth Group as the Mittal Group had not fulfilled
H
412
ASHISH SETH v. SUMIT MITTAL AND OTHERS 413

their obligations under the MoS – The material on record showed A
that the Mittal Group did not fulfill their obligations as per Clause
1.2, Clause 5.3 and Clause 8 – Neither the Mittal Group nor JV
Company deposit the balance amount to be paid towards EDC
liability of Rs.59.05 crores (deducting Rs.25.27 crores to be paid
by the Seth Group) – Mittal Group in Contempt Petition No. 34 of
B
2016 deliberately and willfully did not fulfill their obligations under
the MoS dated 04.05.2015 and as such they rendered themselves
liable for action under the Contempt of Courts Act – However,
further two months’ time is given to the respondents to fulfill their
part of obligations under the MoS dated 04.05.2015 failing which,
proceedings under the Contempt of Courts Act would be initiated. C
Listing Contempt Petition (C) No.34/2016 in Writ Petition
(Crl.) No. 5 of 2015 after three months while dismissing Contempt
Petition (C) Nos. 257 of 2016 and No. 889 of 2017, the Court
HELD: 1. The relevant clauses of the MoS and the
obligations to be fulfilled by the respective parties to the MoS D
showed that Seth Group have fully complied with their obligations,
except deposit of the total amount of Rs.25.27 crores - payment
to DTCP towards initial liability of Rs.59.05 crores of TFIPL.
Seth Group have already paid Rs.9.40 crores against the total
liability of Rs.25.27 crores towards EDC liability against the total E
liability of Rs.59.05 crores of JV Company. The balance amount
is not deposited by the Seth Group as the Mittal Group have not
fulfilled their obligations under the MoS. It is stated at the bar
that the Seth Group is always ready and willing to fulfill their
obligations in terms of the MoS, i.e. their liability as per Clause
1.2, subject to Mittal Group fulfill its obligations. The material F
on record showed that the Mittal Group have not fulfilled their
obligations as per Clause 1.2, Clause 5.3 and Clause 8. Neither
the Mittal Group nor TFIPL have deposited the balance amount
to be paid towards EDC liability of Rs.59.05 crores (deducting
Rs.25.27 crores to be paid by the Seth Group as per Clause 1.2). G
It is the case on behalf of the Mittal Group that in the MoS there
is no specific term and the obligation that the said amount is to
be paid by the Mittal Group. [Para 9.1][438-G-H; 439-A-C]
2. The liability of Rs.59.05 crores was with respect to the
entire land – 48.03 acres at Sector 89, Faridabad. Therefore, the H
414 SUPREME COURT REPORTS [2020] 9 S.C.R.

A liability of the Seth Group would be with respect to their share
out of 48.03 acres which, as agreed between the parties, would
come to Rs.25.27 crores and therefore the balance was required
to be paid by Mittal Group/JV Company. Unless and until the
entire amount is deposited with the DTCP towards EDC, the
aforesaid licenses cannot be renewed and after renewal they are
B
required to be bifurcated and transferred. As the Mittal Group
has refused to deposit the balance amount of EDC (after deducting
Rs.25.27 crores which is the liability of Seth Group as per Clause
1.2), the licenses are not being renewed thereafter. If the
contention and the submission on behalf of the Mittal Group is
C accepted, in that case, the entire MoS would be unworkable and
the purpose and object of the MoS to resolve all the disputes
would be frustrated. As the Mittal Group has not fulfilled its
obligations it appears that the Seth Group has not deposited the
balance amount of EDC liability. At this stage, it is required to be
noted that as per Clause 5.8 Mittal Group shall not resign from
D
the Board of Directors of JV Company and shall not transfer
majority/controlling shareholding in TFIPL till renewal of licenses.
As per the case of Seth Group, Mittal Group have retired from
the Directorship of TFIPL and the balance sheet since then is
being signed by the proxies. [Para 9.2][439-G-H; 440-A-D]
E 3. As per MoS dated 04.05.2015 and even as per the order
passed by this Court 05.05.2015, all the parties to the MoS are
bound to fulfill their respective obligations. Seth Group have
fulfilled their obligations, except the payment of DTCP i.e.
Rs.25.27 crores as per Clause 1.2 of the MoS (except Rs.9.49
F crores which is paid). The respondent Mittal Group in Contempt
Petition No. 34 of 2016 have deliberately and willfully not fulfilled
their obligations which they are required to fulfill under the MoS
dated 04.05.2015 and as such they have rendered themselves
liable for the action under the Contempt of Courts Act. However,
before taking any action, further two months’ time is given to the
G respondents to fulfill their part of obligations under the MoS dated
04.05.2015, more particularly, (i) To pay the entire EDC liability
of TFIPL with interest in relation to license Nos. 34, 35 and 36
other than the share of the EDC liability which the Seth Group
has undertaken to pay as per Clause 1.2 of the MoS; (ii) As per
H Clause 1.2, EDC liability of the Seth Group is to the extent of
ASHISH SETH v. SUMIT MITTAL AND OTHERS 415

Rs.25.27 crores, out of the total EDC liability of TFIPL in relation A
License Nos. 34, 35 and 36 as on 24.03.2015 together with
interest accrued thereon from 24.03.2015. Therefore, the Seth
Group shall make the entire payment of Rs.25.27 crores towards
their EDC liability in respect of License Nos. 34, 35 and 36 of
2007; (iii) The Mittal Group is further directed to renew the
B
license Nos. 34, 35 and 36 of 2007; to execute GPA by JV
Company (as per Clause 5.3), Board Resolution by TFIPL for
availing benefit under EDC Relief Policy (as per Clause 1.2.1),
NOC without any conditions (as per Clause 8) to the Seth Group.
(iv) Thereafter, the DTCP to bifurcate the Seth Group’s portion
of the land in accordance with law and as per the policy and/or the C
rules and regulations, if any. It will be open to the respective
parties to avail the benefit of the applicable EDC Relief Policy,
which may be considered by the DTCP in accordance with the
applicable EDC Relief Policy, if any. The aforesaid entire exercise
shall be completed within a period of two months from the date of
D
lifting of lockdown in the concerned area, failing which, this Court
shall proceed to pass appropriate further order/orders under the
Contempt of Courts Act for non-fulfillment of the obligations by
the respondents. [Paras 9.2, 10, 10.1][440-E-H; 441-A-E]
INHERENT JURISDICTION: Contempt Petition (C) No. 34 of
2016 in Writ Petition (Crl.) No. 5 of 2015. E

Under Article 32 of the Constitution of India
With
Contempt Petition (C) No.257/2016 In Writ Petition (Crl.) No.5/
2015 F
Contempt Petition (C) No.889/2017 In Writ Petition (Crl.) No.5/
2015
Anil Grover, AAG, Ms. Meenakshi Arora, Ms. Vibha Datta
Makhija, Sr. Advs., Abhimanyu Bhandari, Ms. Nattasha Garg, Ram G
Kaushik, Kaushlendra Singh, Ms. Namitha Mathews, Rajnish Singh,
Ms. Aashima Singhal, Piyush Kant Roy, Pulkit Malhotra, Mrs. Priya
Puri, Akshay Girish Ringe, Sanjay S. Chhabra, Deepak Agarwal, Ms.
Vijay Laxmi, Ms. Swati Tiwari, Ms. Garima Prashad, T.A. Khan, Praveen
Gaur, Ms. Priyanshi Agarwal, B.V. Balram Das, Ms. Noopur Singhal,
Satish Kumar, Sanjay Kumar Visen, Abhishek, Govind Goel, Ankit Goel, H
416 SUPREME COURT REPORTS [2020] 9 S.C.R.

A R.K. Gupta, Ayush Sharma, Akhilesh Kumar Pandey, P. N. Gupta, Gaurav
Goel, Rahul Sharma, Ashish Gautam, Snehal Sandil, Bankey Bihari,
Birendra Bikram, Sachin Mittal, Advs. for the appearing parties.
The Judgment of the Court was delivered by

B M. R. SHAH, J.
1. All these Contempt Petitions being Contempt Petition(C) No.
34/2016, Contempt Petition (C) No. 257/2016 and Contempt Petition
(C) No. 889/2017 are preferred by the respective applicants who as
such were parties to Writ Petition (Criminal) No. 5 of 2015 and also
C parties to the Memorandum of Settlement dated 4.5.2015 which
ultimately was made a part of the order passed by this Court dated
5.5.2015 disposing of Writ Petition (Criminal) No. 5/2015 and Writ Petition
(Criminal) No.11/2015, to initiate the contempt proceedings against
concerned respective respondents for non-compliance of the order passed
by this Court in the aforesaid writ petition.
D
2. The facts leading to the present contempt petitions in nutshell
are as under:
That one Triveni Ferrous Infrastructure Private Limited
(hereinafter referred to as ‘TFIPL’) was a joint venture company
E constituted of two groups – one being the Seth Group [consisting of Mr.
Surrender Seth, Mr. Ashish Seth, M/s Ferrous Forging Ltd., M/s Ferrous
Alloys Forging Pvt. Ltd. (FAFPL), M/s Ferrous Township Pvt. Ltd.
(FTPL) and M/s Ferrous Infrastructure Pvt. Ltd. (FIPL)] and the second
being the Mittal Group [consisting of Mr. Sumit Mittal and Mr. Madhur
F Mittal].
2.1 That TIFPL acquired some land at Sector 70 and some 48.05
acres of land at Sector 89, Faridabad. The said TIFPL also availed licences
Nos. 34, 35 and 36 from competent authorities in the year 2007 in respect
of the land bearing Sector 89 with an intent to develop the said Sector 89
G land. Subsequently both the parties being Seth Group and Mittal Group
agreed that the development in the said land be divided and carried out
separately and thereupon the development rights in Sector 89 land, parcel
of 48.03 acres of land belonging to TIFPL, was sold in the following
manner:

H
ASHISH SETH v. SUMIT MITTAL AND OTHERS 417
[M. R. SHAH, J.]

TFIPL A
48.03 acres

TIDCO ORS FIPL Heritage Pal
(in liquidation) Limited 14.80 acres 2.8 acres Infrastructure B
14.80 acres 5.5 acres (Seth Group) (third 10.48 acres
(Mittal Group) (third party) Ferrous City party) (third party)
Project

2.2 That certain disputes arose between both the groups in respect
of the payment of liabilities out of TFIPL which gave rise to various C
litigations including Writ Petition (Criminal) No. 5/2015 and Writ Petition
(Criminal) No. 11/2015. The disputes were referred to mediation. A
Memorandum of Settlement dated 4.5.2015 (hereinafter referred to as
‘MOS’) was executed between the Seth Group, Mittal Group and TFIPL.
The said MOS was produced before this Court in Writ Petition (Criminal)
No.5/2015 and this Court disposed of the aforesaid writ petition in terms D
of the MOS. Under the MOS and the order passed by this Court in the
aforesaid writ petition which was disposed of in terms of MOS dated
4.5.2015 reciprocal obligations were to be fulfilled by both the Seth Group
and the Mittal Group. The obligations of the Seth Group were as
mentioned in paragraph 1 to 4 of the Contempt Petition No. 34/2016 and E
the obligations of the Mittal Group and TFIPL were as per Clauses 5.1
to 5.9 of the contempt petition. Broadly speaking the obligations of the
Seth Group and the obligations of the Mittal Group under the MOS and
the order passed by this Court were as under:
OBLIGATIONS OF THE SETH GROUP
F
Sr. No. Particulars Amount in Rs. (Crores) MoS Clause No.
1. Payment to TFIPL/Mittal group towards 10 1.1
settlement of disputes (court deposit)

28.50 (by four cheques

38.50 1.1.2 G
2. License Renewal fee to DGTCP on 1.47 1.3
behalf of TFIPL/Mittal group
3. Bank Guarantee to secure EDC 6.65 1.2.1

4. Bank Guarantee to secure IDW 3.55 1.4
performance

H
418 SUPREME COURT REPORTS [2020] 9 S.C.R.

A 5. One time consultancy charges for 0.25 19
renewal of license
6. Transfer 50% shareholding of Seth group 50.00 1.5
in TFIPL at a price of Rs.50,000/-
7. Total Financial commitment under the 100.42
MOS and complied by the Seth Group
8. Payment of DTCP on behalf of TFIPL 25.27 1.2
towards EDC liability of Rs.59.05 Cr of On deferred payment
TFIPL. basis
B
Seth Group has and is and shall a lways
be willing to fulfill their obligations in
terms of the MoS subject to the Mittal
Group fulfilling its obligations.

OBLIGATIONS OF MITTAL GROUP
SR. NO. PARTICULARS MOS CLAUSE NO.
C 1. Board Resolution to be issued by TFIPL 1.2.1 Board Resolution
authorizing Seth Group to avail the benefits under
EDC relief policy of 12.04.2012 or any other
future EDC relief policy announced by the DTCP
2. General Power of Attorney to be issued by TFIPL 53 (GPA
in favour of FIPL (Seth Group) by 20.05.2015 i.e. Annexure 13)
within 15 days of execution of MoS to enable
D application for Occupancy Certificate and
Completion.
3. Bifurcation of license- TFIPL is the license holder 8
in respect of 48.03 acres Sector 89 Land and has
sold development rights of 14.8 acres to Seth
Group –

Application was to be made within 30 days for
E renewal for bifurcation/recording of beneficia l
interest. Mittal Group/TFIPL along with the Seth
Group was to submit the same latest by
30.10.2015

Seth Group has already applied in terms of the
renewal letter dated 01.10.2015 on 30.10.2015
and have already made the payment towards
F administrative charges to the DGTCP.
4. Renew the license till 2017 and as per undertaking Clause 17 and Court
on 26.10.2015 to renew till 2018. order dated 26.10.2015

2.3 It is the case on behalf of the Seth Group – the petitioner in
Contempt Petition (Civil) No. 34/2016 that the Seth Group has duly
complied with/fulfilled its obligations under the said MOS and the order
G passed by this Court, however, the Mittal Group has failed to comply
with the same. It is the case on behalf of the Seth Group that non-
compliance of the MOS by the Mittal Group has been wilful and
intentional. It is the case on behalf of the Seth Group that the Mittal
Group has failed to comply with/fulfill the following obligations which
they were required to be complied with/fulfilled as per MOS dated
H 4.5.2015:
ASHISH SETH v. SUMIT MITTAL AND OTHERS 419
[M. R. SHAH, J.]

SR. NO. PARTICULARS A
1. Board Resolution to be issued by TFIPL authorizing
Seth Group to avail the benefits under EDC relief
policy of 12.04.2012 or any other future EDC relief
policy announced by the DTCP
2. General Power of Attorney to be issued by TFIPL in
favour of FIPL (Seth Group) by 20.05.2015 i.e. within B
15 days of execution of MoS to enable application for
Occupancy Certificate and Completion.
3. Bifurcation of license- TFIPL is the license holder in
respect of 48.03 acres Sector 89 Land and has sold
development rights of 14.8 acres to Seth Group –
C
Application was to be made within 30 days for
renewal for bifurcation/recording of beneficial
interest. Mittal Group/TFIPL along with the Seth
Group was to submit the same latest by 30.10.2015

Seth Group has already applied in terms of the D
renewal letter dated 01.10.2015 on 30.10.2015 and
have already made the payment towards
administrative charges to the DGTCP.
4. Renew the license till 2017 and as per undertaking on
26.10.2015 to renew till 2018.
2.4 It is the case on behalf of the Seth Group that as agreed and E
as per clause 1.2.1 of the MOS, Board resolutions were to be passed by
TFIPL authorizing the Seth Group to avail the benefits under EDC relief
policy of 12.04.2012 or any other future EDC relief policy announced by
the DTCP, which resolution is not passed. It is the case on behalf of the
Seth Group that as per clause 5.3 of the MOS, TFIPL was required to F
issue General Power of Attorney in favour of FIPL (Seth Group) by
20.05.2015, i.e., within 15 days of execution of the MOS to enable
applicants for occupation and completion certificate. It is submitted that
no such General Power of Attorney has been executed. It is also the
case on behalf of the Seth Group that as per clause 8 of the MOS, the
licencees were required to be bifurcated in respect of 48.03 acres Sector G
89 land to the extent of 14.8 acres for which the development rights
were sold to the Seth Group. It is the case on behalf of the Seth Group
that under clause 8 of the MOS, TFIPL was required to take steps for
recording of change of beneficial interest to delineate the share of the
Seth Group in the 48.03 acres land. According to the Seth Group, policy
H
420 SUPREME COURT REPORTS [2020] 9 S.C.R.

A dated 08.02.2015 required that an NOC be given by TFIPL/Mittal Group
which should have been given within 30 days of renewal of licence. It is
the case on behalf of the Seth Group that TFIPL/Mittal Group instead
issued a conditional NOC dated 19.04.2016 with 22 frivolous conditions,
which conditions were contrary to the MOS and/or as per the requisite
format as required by the DGTCP. It is submitted that consequently the
B
said NOC was rejected by the DGTCP. It is submitted therefore that in
effect, there has been no substantial compliance of the MOS regarding
issuance of NOC by TFIPL/Mittal Group till date.
2.5 It is further the case on behalf of the Seth Group that under
clause 17 of the MOS, it was the responsibility of the Mittal Group to
C obtain renewal of licence granted by DTCP in respect of the entire
48.03 acres of Sector 89 land. It is the case on behalf of the Seth Group
that without any intention to actually renew the licence and to only comply
with the order on paper, the Mittal Group applied for renewal of licence
vide application dated 7.1.2016 without complying with any of the
D conditions of renewal. It is submitted that one of the conditions by the
DTCP was the payment of EDC charges in terms of the EDC relief
policy dated 12.04.2012. It is submitted that the said EDC charges were
payable for the entire license land by TFIPL and as on that date amounted
to Rs.59.05 crores. It is submitted that the Seth Group undertook to pay
Rs.25.27 crores out of the total liability of Rs.59.05 crores on behalf of
E TFIPL of which Rs. 9.4 crores was already paid by the Seth Group.
However, the Mittal Group failed to make payment of a single penny to
the DTCP towards EDC either of the entire 59.05 crores or of the balance
share payable after providing for 25.27 crores offered to be paid by the
Seth Group on behalf of the Mittal Group 59.05 crores. It is submitted
F that as a consequence of the action/in-action of the Mittal Group, the
application for renewal of licence was rejected by the DTCP.
2.6 It is the case on behalf of the Seth Group that the Mittal
Group and TFIPL have deliberately and willfully not complied with/fulfilled
their obligations under the MOS dated 4.5.2015 and therefore they have
G rendered themselves liable for the action under the provisions of the
Contempt of Courts Act. It is submitted that non-compliance is deliberate
and wilful.
2.7 It appears that Director of M/s Maximal Infrastructure Private
Limited has also filed two separate contempt petitions being Contempt
H Petition No. 257/2016 and Contempt Petition No. 889/2017 against the
ASHISH SETH v. SUMIT MITTAL AND OTHERS 421
[M. R. SHAH, J.]

Seth Group alleging non-compliance of the relevant terms/clauses of the A
MOS.
3. It is submitted by the learned counsel appearing on behalf of
the petitioner Seth Group that Clauses 1.2.1, 12 and 3.2 of the MoS
clearly contemplate that the Seth Group’s liability as far as EDC liability
of TFIPL would be limited to an amount of Rs.25,27,92,000/- out of the B
total liability payable by TFIPL to DTCP towards EDC being Rs.59.05
crores. It is submitted that immediately after entering into the MoS, Seth
Group has undisputedly paid Rs.9.40 crores against its assumed liability
of Rs.25,27,92.000/- in favour of the Chief Administrator, DTCP. Seth
Group in addition has also given a bank guarantee of Rs.6.65 crores to
DTCP towards its EDC liability. It is submitted that after paying such C
huge amounts by Seth Group, the Mittal Group has not paid a single
penny towards their part of the EDC liability and did not renew the
license nor did it provide GPA, Board Resolution and/or unconditional
NOC, as was required under the MoS, which was to be given to the
Seth Group. This prevented Seth Group from getting DTCP to avail the D
benefit of the EDC Relief Policy and work out the payment schedule in
order to clear its share of the EDC liability. It is submitted that as on the
date of MoS, an EDC Relief Policy was in existence which allowed
payment of EDC over various installments. The bank guarantee was
specifically given by the Seth Group so that they could avail the benefits
of the then existing EDC Relief Policy as specifically contemplated under E
Clause 1.2.1 of the MoS. The Seth Group has been prevented from
availing the entitlement under the relief policy by the Mittal Group as the
Mittal Group had and till date has no intention to repay its own EDC
liability and /or to resolve the entire issue of bifurcation of Seth Group’s
portion of land, which was clearly contemplated in the MoS. F
3.1 It is further submitted that violations on the part of the Mittal
Group, namely, non-renewal of license bearing nos. 34, 35 and 36 of
2007; no steps are taken by the TFIPL to bifurcate the license; and non-
issuance of GPA/NOC are deliberate and willful and contrary to the
MoS and the basic intent and purpose of entering into the MoS which G
was to provide for complete severance of between the Seth Group and
the Mittal Group from TFIPL and from the development of the 48.03
acres of land. It is due to the non-compliance of the obligations by the
Mittal Group on the Seth Group and other stakeholders, the basic intent
under the MoS has not been achieved.
H
422 SUPREME COURT REPORTS [2020] 9 S.C.R.

A 3.2 It is submitted on behalf of the Seth Group that the effect of
the non-compliance of the obligations by the Mittal Group on the Seth
Group and other stakeholders is as under:
I. The basic intent under the MoS was to provide for complete
severance of between the Seth Group and the Mittal Group
B from TFIPL and from the development of the 48.03 acres of
land, which has not been achieved due to the defaults by the
Mittal Group.
II. The severance cannot take place without recording of change
of beneficial interest in the land, which in turn cannot be done
C without renewal of the License and without complying with
the conditions stipulated by the DGTCP.
III. One of the conditions laid down by the DTCP for renewing
the license was issuance of an NOC as per the requisite
format. Since the NOC was conditional and not as per format,
D the renewal of license too has been rejected and the change
in beneficial interest not being recording. This has rendered
the entire settlement under the MoS as otiose and has led to
parting of huge sums of money by the Seth Group without
having the desired effect at all.

E IV. The most important consequence of all this is that because of
non-renewal of license coupled with non-bifurcation of the
license, the Seth Group has been unable to handover the
possession to 700 flat owners of its Project ‘Ferrous City’ on
the 14.80 acres of land falling in its share. It has further been
unable to sell and/or utilize the unsold stock of 126 flats which
F can be utilized to generate funds to pay the only remaining
outstanding liabilities of the Seth Group under the MoS.
3.3 It is submitted that in terms of Clause 5.8 of the MoS, the
Mittal Group agreed not to resign from the board of directors of TFIPL
and not to transfer majority/controlling shareholding of TFIPL till renewal
G of licenses. However, perusal of the recent Balance Sheets of TFIPL
shows that the said Balance Sheets have not been signed by the Mittal
brothers namely Mr. Sumit Mittal (Contemnor No. 1) and Mr. Madhur
Mittal (Contemnor No. 2), but has been signed by proxies of the
contemnors. This has been done in order to avoid sanctions from this
Court or any other Court.
H
ASHISH SETH v. SUMIT MITTAL AND OTHERS 423
[M. R. SHAH, J.]

3.4 Making the above submissions, it is prayed to issue the following A
directions:
(a) Direct Mr. Sumit Mittal (Contemnor No. 1) and Mr. Mathur
Mattal (Contemnor No. 2) and TFIPL to pay the entire EDC
liability of TFIPL in relation to License No. 34, 35 and 36
other than the share of the EDC liability which the Seth Group B
has undertaken to pay.
(b) Declare that Seth Group’s EDC liability was only up to an
amount of Rs.25,27,92,000/- out of the total EDC liability of
TFIPL, in relation to License No. 34, 35 and 36 as on 24.3.2015
together with interest accrued thereon from 24.03.2015. Out C
of this, Seth Group has already paid Rs.9.40 crores vide DD
No. 501599 dated 01.08.2016 and has also given a bank
guarantee of Rs.6.65 Crores to DTCP towards its EDC
liability. Seth Group is not liable to any other EDC payment in
respect of License No. 34, 35 and 36.
D
(c) Direct DTCP to bifurcate the Seth Group’s portion of the
land.
(d) Direct DTCP to raise a fresh demand on TFIPL for the entire
outstanding liability of TFIPL and set out the payment schedule
as per their applicable EDC relief policy. E
(e) Direct Mittal Group to renew the licenses as per their
obligations set out under Clause 17, provide General Power
of Attorney by TFIPL (as per clause 5.3) Board Resolution
by TFIPL for availing benefit under EDC Relief Policy (as
per Clause 1.2.1), NOC without any conditions (as per Clause F
8) to the Seth Group.
(f) Direct Mr. Sumit Mittal (Contemnor No. 1) and Mr. Mathur
Mittal (Contemnor No. 2) to deposit their passports in Court
and list the matter after a few weeks to determine if the
Mittal Group has complied with the orders passed by this
G
Court.
It is submitted that the above prayers will not only resolve the
various issues between the Mittal Group and Seth Group but will also
resolve the plight of various homebuyers who are suffering because of
the fraud played by the Mittal Group who are not complying with any of
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424 SUPREME COURT REPORTS [2020] 9 S.C.R.

A their obligations under the MoS and are conveniently resigning from the
companies which are owned and controlled by them after siphoning off
moneys paid by the Seth Group to them so that they can evade any
liability.
4. Miss Meenakshi Arora, learned senior advocate appearing on
B behalf of the respondent Mittal Group has submitted as under:
(i) Mittal Group/TFIPL/Maximal have not committed any breach
or disobedience of the terms and conditions of the MoS dated 04.05.2015;
(ii) The contempt petition filed by the Seth Group is a farce,
motivated and a ruse/ploy so as to create artificial/imaginary
C circumstances to cover up their willful and intentional acts of omission
and commission of having failed to fulfill their obligations qua their
allottees, who have invested in the project of the Seth Group, part of
which is incomplete and the remaining unsafe for habitation as per the
report of the Commission appointed by the RERA;
D (iii) In view of the order dated 01.10.2019 passed by RERA in
Complaint No. 826/2018 – “Ferrous vs. Maximal” and Complaint No.
1402 of 2018 – “Maximal vs. Maximal”, the present contempt petition
is rendered infructuous. The alleged issues/acts of disobedience raised
by Seth Group have been delineated and put to rest by the competent
E authority – RERA, Haryana. RERA, Haryana has put to rest the
following issues:
i) No objection to LC report filed;
ii) Major violation in Zone A;
iii) Grant of Occupation Certificate to the Developer in 48.038
F
acres of land under license No. 34-36/2007;
iv) Quantification of EDC liability and Mode and manner of
payment of EDC liability qua respective developers including
that of FERROUS project (developed by Seth Group);
G v) Renewal of License qua each of developers;
vi) Condition of obtaining NOC for bifurcation of License from
Licences i.e. MAXIMAL is no longer applicable;

H
ASHISH SETH v. SUMIT MITTAL AND OTHERS 425
[M. R. SHAH, J.]

vii) Direction to DTCP, Haryana to deal with flagrant deviations A
and violation in the construction at the project site;
viii) Prohibited from offering possession.
5. With respect to the obligations of the Seth Group, it is submitted
as under:
B
S. No. Particulars Amount Reply of contemnors
(Rs. In
Crores)
1. Payment to 38.50 Seth Group defaulted in payment of
Maximal the last instalment compe lling the
contemnors to file a Contempt Petition
before this Court bearing No. C
714/2015. It is on filing of the
Contempt Petition that Seth Group in
obedience of MOS paid the last
instalment of Rs.6 Crore.
2. License fee to 1.47 It is falsely stated that Rs.1.47 crores
DTCP, was paid by Seth Group. Seth Group
Haryana in paid Rs.93.50 lakhs approximately, D
terms of proportionate to their share of land out
.clause 1.3 of 48.038 acres situated in Sector-89,
Faridabad. Clause 1.3 relied upon is to
be read in conjunction with c lause 2 of
the MOS.
3. Bank 6.65 Seth Group in discharge of his
guarantee to obligation to pay furnished this BG, E
secure which is returnable to Seth Group.
payment of This condition is no longer applicable
EBC (External in view of the order dated 01.10.2019
Development (RERA).
Charges)
4. Bank 3.55 Seth Group in discharge of his
guarantee to obligation to construct the project in F
secure IDW accordance with law furnished this
(Internal BG, which is returnable to Seth Group.
Development
Work)
5. Consultancy 0.25 The license was expired since the year
fee 2009. There were enumerable
formalities to be completed for G
renewal of license w.e.f. the date of its
expiry. It was unanimously agreed to
engage the services of a third party for
the renewal of the license.

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426 SUPREME COURT REPORTS [2020] 9 S.C.R.

A 6. Transfer of 50.00 It is falsely stated that Rs.50 Crores
shareholding was paid by Seth Group to Maximal.

Seth Group held 500 shares in
Maximal. Seth Group opted to divert
their shareholding to exit from the
Company. Mittal Group agreed to
B acquire the shares and paid
consideration to Seth Group.

It is therefore misleading and
outrageous to mention that the
transferor of shares viz., Seth Group
paid any amount to the transferee
C (Mittal Group).
7. Total financial 100.42 That the amount mentioned is
commitment misleading and blatantly false.

The Seth Group in lieu of land
admeasuring 66.77 acres situated in
Sector-70, Faridabad, which was
D
fraudulently transferred have paid only
Rs.38.50 crores to former owner i.e.
Maximal against then market value of
the said land which is approximately
Rs.300 crores.
8. Payment to 25.27 In terms of clause 1.2 of the MOS,
E DTCP, Additional Document filed on
Haryana 21.12.2029 (IA 197372), Seth Group
undertook to pay Rs.25.27 crores
together with interest to DTCP,
Haryana on behalf of Maximal. In
view of the order dated 01.10.2019
(RERA) this condition is no longer
F applicable.

5.1 Now, so far as the obligations of the Mittal Group, it is submitted
on behalf of Mittal Group as under:

S. No. Particulars MOS Clause Reply of contemnors
1. Board Resolution 1.2.1 A copy of the Board Resolution dated
G 29.05.2015 was forwarded to Seth Group.
Seth Group while acknowledging the receipt
approved the contents and sought cooperation,
if any, issue arises in the absence of original
resolution.

The original resolution is part of the minute
book and the extract thereof was shared with
Seth Group on 29.05.2015.
H
ASHISH SETH v. SUMIT MITTAL AND OTHERS 427
[M. R. SHAH, J.]

2. GPA to be issued by 5.3 Under Clause 5.3 Additional Document filed A
TFIPL in favour of on 21.12.2019 (IA 197372), it was agreed that
FIPL TFIPL would execute a registered GPA in
favour of FIPL. Till 29.05.2015 no one came
from FIPL to get the GPA registered.

An email was issued dated 29.05.2015
requiring Seth Group to furnish a Stamp Paper
for GPA and also make themselves available
before the office of Sub-Registrar.
B
In response to the said mail Seth Group vide
email dated 23.06.2015 informed that they do
not want to register the GPA. This was in
contravention to the agreed terms of MoS.

As an abundant caution the Mittal Group on
their own took the initiative of seeking
approval of DTCP, Haryana to execute a
registered GPA in favour of Seth Group to
enable them to deal with their project without
C
any impediment.

Since the Seth Group did not come forward
for collection of the GPA and its registration
the Mittal Group through their attorney
provided Seth Group duly executed GPA by
the executants vide letter dated 04.07.2016.
3. Bifurcation of license & 8 NOC was provided by the contemnors and
Non grant of NOC by filed with DTCP, Haryana on 19.04.2016. D
Maximal
NOC is acknowledged DTCP, Haryana and
found in order vide note sheet dated
13.05.2016.

As per “Clause-8”, parties agreed to jointly
apply for change of developer i.e. from
TFIPL, to FIPL in terms of the agreement
dated 15.06.2007 and in terms of policy of
DTCP, Haryana dated 18.02.2015. E
As per email dated 27.10.2015 the
contemnors reiterated that filing of application
is a joint obligation and all documents to be
submitted in that regard with DTCP, Haryana
are ready, however, as per conditions of
policy the new entity was also required to
submit various information, which the
contemnors were not aware much less being
shared with the said information.
F
Seth Group in contravention to the joint
obligation unilaterally applied for bifurcation
of license. The application got rejected on
13.10.2016 for various reasons including lack
of technica l and financial capacity of the Seth
Group. The rejection order since not assailed,
attained finality.
G
Before RERA, Maximal not only agreed to
offer their cooperation for bifurcation of
license but submitted that all forma lities on
the part of the land owner/licensee be
dispensed with to expedite the same. This
contention is accepted by RERA vide order
dated 01.10.2019.

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428 SUPREME COURT REPORTS [2020] 9 S.C.R.

A 4. Renewal of license 17 Maximal in terms of order dated 26.10.2015
agreed to apply for renewal of license on its
expiry.

Maximal applied for renewal of license on
07.01.2016 as license was expiring on
22.01.2016.

Since there was inaction on the part of the
B department, Maximal filed a writ petition
before Chandigarh High Court for direction
against the department. While directing the
department the Writ Petition was posted for
hearing on 05.07.2016.

DTCP, Haryana vide order dated 04.07.2016
declined to renew the license for non-
compliance of the conditions mentioned in
C “Para 3 and 4” of the order.

The conditions mentioned in “Para 3” were
fully complied with as recorded in the office
note dated 25.01.2016.

However, Maximal was prevented from filing
any appeal/challenge against the said order
dated 04.07.2016, as the Seth Group declined
D to pay EDC, which was a pre-requisite
condition and a ground of rejection as
mentioned in “Para-4” of the order dated
04.07.2016.
5. Responsibility to defend 20 of MOS The Mittal Group and Seth Group were
138 proceedings acquitted and an appeal filed by the
complainant is pending adjudication .

E The renewal of the license is as per the HUDA Act, Rules and
Regulations and not as per the requirement of the licensee. The license
was initially granted on 23.01.2007 and valid up to 22.01.2009. As per
then HUDA Rules, the license was renewable for a period of one year.
That as per subsequent amendment, the license was renewable for a
period of two years. In the present case, the license in question was
F applied for renewal pursuant to settlement in the month of June 2015
and it got renewed by the department against payment of charges for
each renewal period. Mittal Group applied for renewal of license on
07.01.2016 for a period of two years in compliance of order dated
26.10.2015. However, the license could not be renewed for the reasons
G set out in tabular form Serial No. 4 hereinabove.
That as per the letter dated 27.03.2015, EDC liability was divided
into two parts:
i. Payable against 33.238 acres which includes project of 4
developers and;
H
ASHISH SETH v. SUMIT MITTAL AND OTHERS 429
[M. R. SHAH, J.]

ii. Payable against 14.80 acres payable by TIDCO (Company A
under Liquidation) through auction purchaser. This bifurcation
and quantification of EDC liability was accepted by OL.
Seth Group in willful defiance of the settlement did not pay the
EDC. The Seth Group influenced DTCP, Haryana to withdraw the order
dated 27.03.2015 to wriggle out of the settlement. DTCP, Haryana B
arbitrarily without any basis, vide letter dated 10.01.2017 withdrew the
letter dated 27.03.2015. That the appellant authority has stayed the effect
of the letter dated 10.01.2017 and the division of liability vide letter dated
27.03.2015 is still in force and is now for all intents and purposes confirmed
by RERA vide order dated 01.10.2019. That the liability of developer
including that of the Seth Group will be determined by DTCP, Haryana C
and paid to the department without the involvement of Mittal Group/
Contemnors.
5.3 That as per order dated 01.10.2019 passed by RERA, the
following has been ordered:
D
(a) Bifurcation/Division of licence of all the developers of 48.038
acres of land situated at Sector-89, Faridabad including that
of Petitioner i.e. their entity FIPL.
(b) Renewal of license for each of the developers by DTCP,
Haryana on bifurcation. E
(c) Separate quantification of EDC and other statutory liabilities
of each of the developers proportionate to their share of land.
(d) Grant of occupation certificate, possession etc., as per law
on removal of all unauthorized and illegal construction to be
determined by DTCP, Haryana. F
(e) All or any formality requiring involvement of Maximal has
been dispensed with.
In light of the subsequent development and order dated 01.10.2019
passed by RERA, as such, the contempt petition is liable to be dismissed.
G
6. Now, so far as submission on behalf of the Seth Group as
regards non-payment of EDC to DTCP by Maximal, it is submitted that
under the MoS dated 04.05.2015 there is no such condition and/or
obligation on the part of the Maximal to pay any EDC to DTCP. It is
submitted that as such the same was not even the case so prayed in the
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430 SUPREME COURT REPORTS [2020] 9 S.C.R.

A contempt petition. The contempt petition filed by the Seth Group was
limited and confined to the alleged disobedience by the Maximal as follows:
a) Non-issuance of GPA.
b) Non-issuance of Board Resolution.
B c) Non-issuance of NOC for bifurcation.
6.1 In fact, TFIPL/Maximal/Mittal Group in their contempt petition
have subsequently pleaded disobedience of Seth Group by not paying
External Development Charges (EDC) of license No. 34, 35 and 36 of
207 as determined by memo dated 27.03.2015 to Rs.25.27 crores (as on
C 24.03.2015) together with interest in terms of Clause 1.2.1 of the MoS
and the undertaking given to this Court.
6.3 That there is no condition and/or undertaking of Maximal to
pay the differential amount of Rs.33.78 crores in the MoS dated
04.05.2015 and thus no mode and manner is provided in the MoS to pay
D the differential EDC amount i.e. 33.78 crores. This amount is payable
by a separate and distinct entity TIDCO having the beneficial interest
and ownership in land proportionate to which this amount is determined
by the letter dated 27.03.2015 issued by DTCP, Haryana. The issue
regarding payment of EDC by the project developer namely viz. TIDCO
of Rs.33.78 crores (determined by letter dated 27.03.2015) being the
E beneficial amount as attained finality. The Memo dated 27.03.2015 is
the mother document which defines the obligations of each of the parties
and the same came into existence by taking into consideration the MoS
dated 27.03.2015. It is submitted therefore that it the MoS dated
27.03.2015 is considered as non-existent, then the MoS dated 04.05.2015
F must fall.
6.4 It is submitted that even otherwise the Maximal has no financial
ability to pay any amounts. Maximal and other licensee divested of their
right, title and interest in 48.08 acres way back in the year 2007-2008.
The licensees are left with no interest in the project land. TIDCO is one
of the project developers and has beneficial interest in part of the project
G
land. Maximal as well as the Mittal Group have nowhere agreed to pay
the amounts for and on behalf of the TIDCO being the beneficial owner
of the project land.
6.5 It is submitted that the malafides of Seth Group are apparent
and writ large from the very fact that on one hand Licensee in the larger
H
ASHISH SETH v. SUMIT MITTAL AND OTHERS 431
[M. R. SHAH, J.]

interest are wanting bifurcation of license in favour of Seth Group and A
other co-developers of the entire land whereas the Seth Group have
taken every possible course and has left no stone unturned to negate/
nullify the bifurcation of EDC Liability vide letter dated 27.03.2015 and
subsequent thereto bifurcation of license vide letter dated 01.10.2015.
The change of beneficial interest has been allowed by RERA vide order
B
dated 01.10.2019 and there is no stay of the order. It is the Seth Group
who has failed to honour their obligation under the MOS and is trying to
negate both the letters to create an artificial and imaginary alibi for not
honouring their obligations under the MOS dated 04.05.2015 of paying
EDC liability of Rs.25.27 crores together with interest accrued as on
date. C
6.6 It is submitted that as such Seth Group has not fulfilled its
obligations/conditions/undertaking and paid the amount of Rs.25,27,92,000/
- and therefore as such Seth Group is liable to be prosecuted and punished
under the Contempt of Courts Act for which the respondents – Maximal/
Mittal Group have filed the contempt petitions. D
6.7 It is submitted that therefore there is non-compliance on the
part of Mittal Group, much less the willful disobedience of the MoS and
the order passed by this Court and therefore it is prayed to dismiss the
contempt petition filed by Seth Group.
7. In reply, it is submitted on behalf of Seth Group that so far as E
the submission on behalf of Mittal Group in their defence that there are
large-scale violations in the construction undertaken by the Seth Group
in the portion of the license to lands falling within the Seth Group area is
concerned, it is submitted that the same has no relevance to the present
contempt proceedings. What Seth Group does in its own share of the F
land is not relevant for the MoS in the present proceedings. The Mittal
Group is only raising these issues in order to sidetrack the main issue
that they have been in contempt of their undertaking before this Court.
It is submitted that even otherwise FIPL of the Seth Group has
cured its non-compoundable violations in its construction. It is submitted G
that if the bifurcation of the license had taken place, the frivolous issues
raised by Mittal Group would have been the exclusive liability of the
Seth Group. It is submitted that in any case and as submitted hereinabove,
the Mittal Group has failed to fulfill its obligation under the MoS, which
subsequently became the part of the order passed by this Court and the
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432 SUPREME COURT REPORTS [2020] 9 S.C.R.

A disobedience/non-compliance is deliberate and willful and for this they
are liable to be prosecuted and punished under the Contempt of Courts
Act.
8. Heard learned counsel appearing on behalf of the respective
parties at length.
B 8.1 At the outset, it is required to be noted that as such the present
proceedings are filed by the respective parties to the MoS dated
04.05.2015, which subsequently was made the order passed by this Court
dated 05.05.2015 to initiate appropriate proceedings against each other
under the provisions of the Contempt of Courts Act. It is not in dispute
C that all were parties to the MoS/consent order.
8.2 Before discussing the rival submissions made by the learned
counsel appearing on behalf of the respective parties, the background
which ultimately led to the MoS dated 04.05.2015 are required to be
referred to and considered.
D 8.3 Criminal proceedings were initiated against Ashish Seth of
Seth Group and others which was the subject matter before this Court in
Writ Petition (Criminal) No. 5 of 2015. The disputes involved were
commercial disputes. It appears that during the course of hearing, a
suggestion was given, as the controversy in the case pertained to payment
E of money as alleged, that the matter be sent for mediation. This Court,
with the consent of the parties, sent the matter for mediation, subject to
Ashish Seth depositing a sum of Rs.10 Crore before this Court. That
Ashish Seth deposited the sum of Rs.10 Crore. This Court requested
Mr. Justice R.V. Ravindran, a former Judge of this Court, to mediate
between the parties. Thereafter, learned Mediator mediated and initially
F submitted the interim report. The interim report of the learned Mediator
reads as follows:
“This Hon’ble Court by order 09.02.2015, referred the matter
to mediation so as to enable the parties to arrive at a negotiated
settlement.
G
In pursuance of the above, mediation meetings were held
on 14.02.2015, 16.02.2015, 17.02.2015, 18.02.2015, 10.03.2015,
15.03.2015 and 17.04.2015 at New Delhi. The meetings were
attended by Mr. Surender Seth and Mr. Ashish Seth with their
counsel, Mr. Sachin Puri on one side, and Mr. Sunit Mittal and
H
ASHISH SETH v. SUMIT MITTAL AND OTHERS 433
[M. R. SHAH, J.]

Mr. Mathur Mittal with their counsel Mr. Sanjay S. Chhabra on A
the other side.
After detailed negotiations and discussions and exchange
of various alternatives, parties have arrived at a broad consensus,
without prejudice to their respective rights and contentions. Parties
are further negotiating to give shape to the terms agreed, in a B
manner which will effectively express what has been agreed, and
put an end to the disputes and at the same time safeguarding their
respective interests.
As several issues relating to legal and taxation issues require
to be sorted out with the advice of experts, the parties have not C
been able to finalize the terms and execute the Memorandum of
Settlement.
On the joint request of the parties, further mediation
meetings are scheduled for 11.04.2015, 12.04.2015 and 15.04.2015
for further negotiations and finalization of the draft Memorandum D
of Settlement.
It is expected that the said process is likely to take at least
two more weeks and, therefore, it is respectfully submitted that
the time for completion of mediation process be extended till the
end of this month.” E
Thereafter, all the parties settled all the disputes and entered into
the Memorandum of Settlement dated 04.05.2015. At this stage, it is
required to be noted that the MoS dated 04.05.2015 was amongst (i)
Shri Surender Seth; (ii) Shri Ashish Seth; (iii) M/s Ferrous Forging Limited;
(iv) M/s Ferrous Alloy Forging Pvt. Ltd.; (v) M/s Ferrous Township Pvt. F
Ltd. And (vi) M/s Ferrous Infrastructure Pvt. Ltd. (all belonging to Seth
Group) as the first party AND (i) Shri Sumit Mittal; (ii) Shri Madhur
Mittal (belong to Mittal Group) as the second party AND M/s Triveni
Ferrous Infrastructure Pvt. Ltd. as the third party. The preamble of the
MoS reads as under:
G
“PREAMBLE:
WHEREAS TFIPL is an Infrastructure Development Company
in which the Seth Group represents that it holds 50% share (i.e.
FFL and FAFPL have 33% and 17% shares respectively); and
Mittal Group represents that it holds the remaining 50% share;
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434 SUPREME COURT REPORTS [2020] 9 S.C.R.

A WHEREAS disputes arose among the Seth Group on the one
hand and the Mittal Group on the other, with respect to lands
admeasuring 37.58125 acres and 29.1953 acres, situated at Sector
70, Faridabad (Haryana) on account of Mittal Group claiming that
the Seth Group should pay certain amounts to TFIPL and on
account of certain issues relating to management and maintenance
B
of statutory records and books of account of TFIPL.
WHEREAS the said disputes have given rise to the following
legal proceedings which are either pending in Courts of Law and/
or are under investigation by the Competent Authority:
C (a) Company Petition bearing C.P. No. 158 (ND) of 2013 filed
by FAFPL and FFL against the TFIPL, Sumit Mittal, Madhur
Mittal and others qua the affairs of TFIPL, pending before
Company Law Board, New Delhi;
(b) Complaint Case No. 613/2014 pending before the
D Jurisdictional Magistrate at Agra (U.P.) arising from FIR
No. 513/2014 against Surender Seth, Ashish Seth and others,
registered at Police Station, New Agra, Agra;
(c) FIR No. 808/2014 against Surender Seth, Ashish Seth and
others, registered with the Economic Offence Wing, New
E Delhi;
(d) Crl. M.C. No. 5621/2014 on the file of Hon’ble Delhi High
Court (Ashish Seth Vs. State & Another);
(e) Crl. M.C. No. 5622/2014 on the file of Hon’ble Delhi High
Court (Surender Seth Vs. State and Another);
F
(f) W.P. (Crl.) No. 5/2015 on the file of Hon’ble Supreme Court
of India (Ashish Seth Vs. Govt of NCT of Delhi & Others);
(g) W.P. (Crl.) No. 11/2015 on the file of Hon’ble Supreme
Court of India (Surender Seth Vs. Govt of NCT of Delhi &
Others).
G
WHEREAS Criminal Case No.235/2014, filed by one Mr. Hari
Mohan Gupta (a witness in FIR No.513/2014) against Ashish Seth
is pending before the Special Judge, Agra (U.P.) and Ashish Seth
has filed a petition under Section 482 Cr.P.C. being Petition No.
134/2015, before the Hon’ble Allahabad High Court, for quashing
H the said proceedings.
ASHISH SETH v. SUMIT MITTAL AND OTHERS 435
[M. R. SHAH, J.]

WHEREAS the Hon’ble Supreme Court of India in the A
proceedings mentioned at Serial No. (f) and (g) above, vide Order
dated 14.01.2015 referred the parties to mediation and
subsequently, vide Order dated 09.02.2015 requested Justice R.V.
Ravindran, former Judge of Hon’ble Supreme Court of India to
act as a Mediator to assist the parties to arrive at a negotiated
B
settlement;
WHEREAS after deliberations and discussions between the two
groups ove several sittings, the parties have agreed to resolve all
their disputes amicable as per the terms hereinafter set out.”
Thus, the parties entered into the MoS and agreed to resolve all C
their disputes amicably. Therefore, as such, all the parties to the MoS
dated 04.05.2015 are bound to comply with the relevant terms and
conditions and their respective obligations. As per the terms of the
settlement agreed between the parties, there are certain obligations to
be fulfilled by the respective parties, which the respective parties are
bound to fulfill and comply with in its true spirit. The obligations of Seth D
Group are specifically mentioned in Clauses 1 to 1.5.1. The Seth Group
has further agreed and undertaken to perform their part of obligations
with the Mittal Group and TFIPL as mentioned in Clauses 3 to 3.14 and
Clause C. Similarly, the Mittal Group and TFIPL’s obligations,
representations and warranties are also specifically mentioned in Clause E
D, which are specifically mentioned in Clauses 5 to 5.9.
As agreed between the parties and in consideration of the
obligations in Clauses 1.1, 1.3 and 1.4 and on furnishing of all requisite
bank guarantees as required in terms of Clause 1.2 by the Seth Group
under the MoS, all FIRs, complaints and cases mentioned in Clause 6.1 F
to Clause 7 were required to be withdrawn/quashed/cancelled/terminated.
The joint obligation of the parties are specifically mentioned in Clause F
(relevant Clauses 8 & 9). As per Clause 10, TFIPL and Mittal Group
confirmed that there are no outstanding claims of Seth Group or any of
its constituents under the agreement dated 15.07.2007 in respect of FSI
admeasuring 11,28,204 Sq Ft. including FSI for EWS calculated on a G
total area of 14.80 acres on the land situated in Sector 89 Faridabad
under License Nos. 34, 35 and 36 of 2007 granted in the name of TFIPL
and others. Clause 12 which is an important and relevant clause reads
as under:
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436 SUPREME COURT REPORTS [2020] 9 S.C.R.

A “12. It is hereby confirmed that other than the payment of
the EDC amount required to be made under Clause 1.2.1 and
under Clause 3.8 above, Seth Group shall not be liable for any
other EDC payment under License Nos. 34, 35 and 36 of 2007
either on renewal and/or upon bifurcation of License Nos. 34, 35
and 36 of 2007, except to the extent of Rs.25,27,92,000/- together
B
with interest accrued thereon from 24.03.2015, imposed by DTCP,
Haryana. It is further clarified that the liability to pay EDC of
Seth Group in a sum of Rs.25,27,92,000/- against the total EDC
liability of Rs.59.05 crores as on 24.03.2015, shall not be varied
subject, however, to the condition that in the event of the total
C liability, which has been assessed at Rs.59.05 crores as on
23.04.2015, being revised from Rs.59.05 crores, to any higher
amount as on 24.03.2015, on account of revised calculation or
similar reason. In such eventuality, the Seth Group will bear the
proportionate increase in regard to the amount in excess of
Rs.59.05 crores.”
D
Clause G is specifically with respect to renewal of licenses, more
particularly, license Nos. 34, 35 and 36 of 2007. The relevant clauses
with respect to renewal of licenses are Clauses 17, 18 and 19, which
read as under:
E 17. Mittal Group shall apply for renewal of license by 23.06.2015
subject to compliance of clause 1.2 (to the extent of providing
Bank Guarantee), 1.3 & 1.4 by the Seth Group. The Seth Group
have provided documents/undertakings with respect to the lands
falling to share of the Seth Group under Agreement dated
15.06.2007, i.e. (i) Status of construction/allotment of EWS Flats,
F and (ii) Service Plan status, its drawing, estimates and its approval
from HUDA, Chandigarh annexed as Annexure-16, to enable
Mittal Group to apply for renewal of license. Seth Group does
not have any further document in this regard, however, it is clarified
that in case any indemnity, undertaking, letter and/or similar
G document is required to be executed after filing of the application
for renewal of license, pertaining to the lands falling in the share
of Seth Group under Agreement dated 15.06.2007, Seth Group
shall do the needful at the earliest if so requested by Mittal Group.
18. On application made for renewal of license in terms of clause
H 17, Mittal Group will secure renewal of license within 90 days. All
ASHISH SETH v. SUMIT MITTAL AND OTHERS 437
[M. R. SHAH, J.]

administrative and miscellaneous charges, compounding fee, A
penalties and other charges levied and payable by PAL, ORS and
Heritage for renewal of license shall be paid by the Mittal Group.
All such charges in respect of FIPL agreement shall be exclusively
paid/borne by Seth Group by similarly paying to TFIPL immediately
on being demanded.
B
19. Seth Group shall pay a sum of Rs.25,00,000/- (Twenty Five
Lacs only) to Mittal Group for hiring/engaging consultancy services
for renewal of License Nos. 34, 35 & 36 of 2007 in favour of
TFIPL at the time of filing of the application for renewal of license
by the Mittal Group.”
C
As per Clause 27, with the execution of the said MoS and subject
to compliance of undertaking and fulfillment of all obligations of the Seth
Group and Mittal Group/TFIPL as undertaken in the MoS, it was agreed
between the parties that all pending disputes amongst the parties. shall
stand resolved and TFIPL and/or Mittal Group have no claim of any
nature against the Seth Group and similarly Seth Group shall have no D
claim of any nature against the TFIPL and/or Mittal Group. The MoS
further provides the consequences of breach/non-payment of the
amounts. The relevant clauses are Clauses 36, 37 and 38, which read as
under:
“36. In the event of any default by Seth Group of their obligations E
and warranties, the Mittal Group and TFIPL will be entitled to
initiate legal proceeding for enforcing performance of the
obligations/warranties given by Seth Group, including initiation of
contempt proceedings against the Seth Group in accordance with
law. F
37. In case there is a default in payment as agreed in Clause Nos.
1.1, 1.3 & 1.4 of furnishing of all requisite Bank Guarantees as
required in terms of clause 1.2 by the Seth Group, the Mittal Group
and TFIPL will also be entitled to approach the Hon’ble Supreme
Court for revival of the complaints/FIRs stated at serial Nos. (b) G
& (c) of the list of cases mentioned in the preamble above.
Provided however, on Mittal Group and TFIPL obtaining
performance of the obligations, the revised criminal proceedings
and contempt proceedings, if any, shall be terminated.

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438 SUPREME COURT REPORTS [2020] 9 S.C.R.

A 38. In the event of any default by Mittal Group of their obligations
and warranties, the Seth Group will be entitled to initiate legal
proceeding for enforcing performance of the obligations/warranties
given by the Mittal Group, including initiation of contempt
proceedings against the Mittal Group in accordance with law.”
B This MoS was placed before this Court in the aforesaid Writ
Petition and this Court recorded the settlement in entirety and as agreed
between the parties and as prayed, the MoS dated 04.05.2015 became a
part of the order and this Court directed the parties to adhere to the
terms and conditions of the settlement and the undertakings given therein.
This Court specifically further observed that every facet of it shall
C tantamount to an order of this Court and in case of failure the parties
shall be at liberty to move this Court for an appropriate direction. Thus,
as per the MoS and even as per the order passed by this Court dated
05.05.2015, all the parties to the MoS shall have to comply with and/or
fulfill their respective obligations as mentioned in the MoS dated
D 04.05.2015. As observed hereinabove, the disputes were commercial
disputes and therefore all the parties to the disputes agreed to resolve all
their disputes, which culminated into the MoS and thereafter the order
passed by this Court.
9. The entire object and purpose of entering into the settlement
E was to resolve all the disputes between the parties. Therefore, it is the
duty of the Court that the settlement entered into between the parties
and the consent order passed by this Court should be given effect to in
its letter and spirit. All the parties to the consent terms are required to
fully comply with the terms of settlement/consent terms and the consent
order. One party cannot be permitted to say that that portion of the
F settlement which is in their favour be executed and/or complied with
and not the other terms of the settlement/consent terms/consent order.
9.1 From the facts narrated hereinabove and even otherwise
considering the relevant clauses of the MoS and the obligations to be
fulfilled by the respective parties to the MoS, it appears that Seth Group
G have fully complied with their obligations, except deposit of the total
amount of Rs.25.27 crores - payment to DTCP towards initial liability of
Rs.59.05 crores of TFIPL. It appears that Seth Group have already paid
Rs.9.40 crores against the total libaiility of Rs.25.27 crores towards EDC
liability against the total liability of Rs.59.05 crores of TFIPL as per
H Clause 1.2. It appears that the balance amount is not deposited by the
ASHISH SETH v. SUMIT MITTAL AND OTHERS 439
[M. R. SHAH, J.]

Seth Group as the Mittal Group have not fulfilled their obligations under A
the MoS. It is stated at the bar that the Seth Group is always ready and
willing to fulfill their obligations in terms of the MoS, i.e. their liability as
per Clause 1.2, subject to Mittal Group fulfill its obligations. From the
material on record, it appears that the Mittal Group have not fulfilled
their obligations as per Clause 1.2, Clause 5.3 and Clause 8. Neither the
B
Mittal Group nor TFIPL have deposited the balance amount to be paid
towards EDC liability of Rs.59.05 crores (deducting Rs.25.27 crores to
be paid by the Seth Group as per Clause 1.2). It is the case on behalf of
the Mittal Group that it is the liability of the TIDCO and not the Mittal
Group and in the MoS there is no specific term and the obligation that
the said amount is to be paid by the Mittal Group. It is required to be C
noted that all the terms and conditions/obligations of the Seth Group,
Mittal Group and TFIPL are required to be read conjointly. The license
Nos. 34, 35 and 36 of 2007 are required to be transferred in favour of
Seth Group. It appears that TFIPL acquired some land at Sector 70 and
some 48.03 acres of land at Sector 89, Faridabad. TFIPL also availed
D
licenses Nos. 34, 35 and 36 from the competent authorities in the year
2007 in respect of land bearing at Sector 89 with an intent to develop the
Sector 89 land. Subsequently, however , both the parties – Seth Group
and Mittal Group agreed that it would be the best that the development
of the said land be divided and carried out separately and thereupon the
development rights in the Sector 89 land parcel of 48.03 acres of land E
belonging to TFIPL was sold in the manner mentioned as under:
TFIPL
48.03 acres

F

TIDCO ORS FIPL Heritage Pal
(in liquidation) Limited 14.80 acres 2.8 acres Infrastructure
14.80 acres 5.5 acres (Seth Group) (third 10.48 acres
(Mittal Group) (third party) Ferrous City party) (third party)
Project
G
The liability of Rs.59.05 crores was with respect to the entire
land – 48.03 acres at Sector 89, Faridabad. Therefore, the liability of the
Seth Group would be with respect to their share out of 48.03 acres
which, as agreed between the parties, would come to Rs.25.27 crores
and therefore the balance is naturally required to be paid by Mittal Group/
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440 SUPREME COURT REPORTS [2020] 9 S.C.R.

A TFIPL. Unless and until the entire amount is deposited with the DTCP
towards EDC, the aforesaid licenses cannot be renewed and after
renewal they are required to be bifurcated and transferred. As the Mittal
Group has refused to deposit the balance amount of EDC (after deducting
Rs.25.27 crores which is the liability of Seth Group as per Clause 1.2),
the licenses are not being renewed thereafter. If the contention and the
B
submission on behalf of the Mittal Group is accepted, in that case, the
entire MoS would be unworkable and the purpose and object of the
MoS to resolve all the disputes would be frustrated. As the Mittal Group
has not fulfilled its obligations it appears that the Seth Group has not
deposited the balance amount of EDC liability. At this stage, it is required
C to be noted that as per Clause 5.8 Mittal Group shall not resign from the
Board of Directors of TFIPL and shall not transfer majority/controlling
shareholding in TFIPL till renewal of licenses. As per the case of Seth
Group, Mittal Group have retired from the Directorship of TFIPL and
the balance sheet since then is being signed by the proxies.
D 9.2 As observed hereinabove, as per the MoS dated 04.05.2015
and even as per the order passed by this Court 05.05.2015, all the parties
to the MoS are bound to fulfill their respective obligations. As observed
hereinabove, Seth Group have fulfilled their obligations, except the
payment of DTCP i.e. Rs.25.27 crores as per Clause 1.2 of the MoS
(except Rs.9.49 crores which is paid).
E
10. Having heard the learned counsel for the respective parties
and considering the material on record, we are of the opinion that the
respondent Mittal Group in Contempt Petition No. 34 of 2016 have
deliberately and willfully not fulfilled their obligations which they are
required to fulfill under the MoS dated 04.05.2015 and as such they
F have rendered themselves liable for the action under the Contempt of
Courts Act. However, before taking any further action, we propose to
give further two months’ time to the respondents, namely, Shri Sumit
Mittal, Shri Mathur Mittal and TFIPL to fulfill their part of obligations
under the MoS dated 04.05.2015, more particularly,
G (i) To pay the entire EDC liability of TFIPL with interest in relation
to license Nos. 34, 35 and 36 other than the share of the EDC liability
which the Seth Group has undertaken to pay as per Clause 1.2 of the
MoS;
(ii) As per Clause 1.2, EDC liability of the Seth Group is to the
H extent of Rs.25,27,92,000/-, out of the total EDC liability of TFIPL in
ASHISH SETH v. SUMIT MITTAL AND OTHERS 441
[M. R. SHAH, J.]

relation License Nos. 34, 35 and 36 as on 24.03.2015 together with A
interest accrued thereon from 24.03.2015. Therefore, the Seth Group
shall make the entire payment of Rs.25,27,92,000/- along with the interest
accrued thereon from 24.03.2015 towards their EDC liability in respect
of License Nos. 34, 35 and 36 of 2007;
(iii) The Mittal Group is hereby further directed to renew the B
license Nos. 34, 35 and 36 of 2007; to execute GPA by TFIPL (as per
Clause 5.3), Board Resolution by TFIPL for availing benefit under EDC
Relief Policy (as per Clause 1.2.1), NOC without any conditions (as per
Clause 8) to the Seth Group.
(iv) Thereafter, the DTCP to bifurcate the Seth Group’s portion C
of the land in accordance with law and as per the policy and/or the rules
and regulations, if any. It is also observed that it will be open to the
respective parties to avail the benefit of the applicable EDC Relief Policy,
which may be considered by the DTCP in accordance with the applicable
EDC Relief Policy, if any.
D
10.1 The aforesaid entire exercise shall be completed within a
period of two months from the date of lifting of lockdown in the concerned
area, failing which, as observed hereinabove, this Court shall proceed to
pass appropriate further order/orders under the Contempt of Courts Act
for non-fulfillment of the obligations by the respondents – Shri Sumit
Mittal, Shri Madhur Mittal and TFIPL. As observed hereinabove, this E
Court has deferred to pass further orders against the contemnors - Mittal
Group and TFIPL to enable them to give them further opportunity.
11. In view of the above discussion and for the reasons stated
above, we see no substance in Contempt Petition (C) No. 257 of 2016
and Contempt Petition (C) No. 889 of 2017 filed by the Mittal Group F
against the Seth Group. Under the circumstances, Contempt Petition
(C) No. 257 of 2016 and Contempt Petition (C) No. 889 of 2017 deserve
to be dismissed and are accordingly dismissed. List Contempt Petition
(C) No.34/2016 in Writ Petition (Crl.) No. 5 of 2015 before this Bench
immediately after three months. G

Devika Gujral Directions issued .

H