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Supreme Court upholds invocation of urgency clause for land acquisition in Yamuna Expressway Project; saves exposure of thousands of crores

JSA successfully advised and represented Yamuna Expressway Industrial Development Authority (“YEIDA”) before the Hon’ble Supreme Court (“the Court”) in a landmark case concerning the acquisition of land for an integrated development project surrounding the Yamuna Expressway (“the Yamuna Expressway Project”). The Supreme Court’s judgment in Kali Charan and Others v. State of U.P. and Others, Civil Appeal No. 13119 of 2024 and 34 other civil appeals, decisively upheld the legality of the acquisition process and paved the way for the Yamuna Expressway Project’s continued progress.

The Yamuna Expressway Project spans 18,000 hectares across 16 villages in Gautam Buddha Nagar and forms a vital component of YEIDA’s development blueprint. The instant litigations concerned the acquisition of 2,375 hectares in 14 villages, impacting 12,868 landowners, with YEIDA having already invested approximately INR 972 crores.

The Supreme Court dismissed 29 civil appeals filed by landowners challenging the acquisition on the ground that the invocation of the urgency clause under the Land Acquisition Act, 1894 (“the 1894 Act”) was valid. Further, it allowed 6 civil appeals filed by YEIDA and set aside various decisions of the Allahabad High Court that had directed YEIDA to pay an enhanced amount of compensation to the erstwhile landowners.

The case involved unique challenges as conflicting decisions from co-ordinate benches of the Allahabad High Court had to be resolved (with certain decisions upholding the acquisition while others had declared it as illegal). The Hon’ble Supreme Court held the High Court’s decisions striking down the acquisitions to be per incuriam and upheld the judgments that had found the acquisition process to be legal and valid. The present decision, therefore, finally provides clarity and consistency of law regarding the vast lands acquired by YEIDA.

The Court’s further key findings are:

  • The Court affirmed YEIDA’s policy of planned development along the Yamuna Expressway, recognizing the integral connection between the Expressway itself and the development of adjacent lands for commercial, residential, and recreational activities.
  • The Court distinguished the Yamuna Expressway Project from standalone projects.
  • The Court held that the application of urgency clause under the 1894 Act was legal and justified, given the project’s scale and public importance.

 

Our Disputes Team is comprised of lead partners, Amar Gupta and Divyam Agarwal; senior associates, Pranav Tanwar and Zain Maqbool; and associates, Mohit Sharma and Abhay Pratap Singh.

JSA successfully defended the Dismissal of an appeal challenging the admission order of Tarun Relators Private Limited in applications for recall of the dismissal order filed by its 49% shareholder and ex-suspended director

JSA successfully advised and represented Assets Care & Reconstruction Enterprises Limited (“ACRE”) and other members of the committee of creditors before the Hon’ble National Company Law Appellate Tribunal, Chennai (“NCLAT”), in dual applications seeking recall of the Hon’ble NCLAT’s order dated October 14, 2024, filed by Mantri Developers Private Limited (“Mantri”), a 49% shareholder of Tarun Realtors Private Limited (“Corporate Debtor”), and Mr. Baaskaran S., the ex-suspended director of the Corporate Debtor.

The said applications were filed for recall of the Hon’ble NCLAT’s order dated October 14, 2024 vide which an appeal filed by Baaskaran S., challenging the admission of the Corporate Debtor to corporate insolvency resolution process (“CIRP”), came to be dismissed owing to the resignation of Baaskaran S. from his post as a director of the Corporate Debtor. It was Mantri’s contention that on the date of dismissal of the appeal, it had filed an application for substitution in place of the ex-suspended director of the Corporate Debtor owing to his resignation, which was not numbered and listed on the date of hearing. Therefore, Mantri contended that owing to the dismissal of the appeal without considering its substitution application, principles of natural justice and due process were violated by the Hon’ble NCLAT.

Mantri further placed reliance on an order dated December 10, 2024 passed by the Hon’ble Karnataka High Court in a writ petition filed by it challenging the Hon’ble NCLAT’s order dated October 14, 2024, wherein the Hon’ble Karnataka High Court granted liberty to Mantri to file the said recall applications before the Hon’ble NCLAT.

Contending that the said recall applications were not maintainable and without merit, ACRE inter alia adduced the following submissions:-

  1. Mantri had no locus standi to pursue an appeal challenging the admission of the Corporate Debtor to CIRP in its capacity as a shareholder, as it is a mere investor and not an ‘aggrieved person’ under Section 61 of the Insolvency and Bankruptcy Code, 2016.
  2. The exceptional circumstances for recall of an order, as carved out in the judgment of the five-member bench the Hon’ble NCLAT, New Delhi in Union Bank of India Vs Mr. Dinkar T. Venkatasubramaniam & Ors., CA (AT) (Ins) No.729/2020, had not been made out in the present case as there existed no procedural lapses on the date of passing of the order in question.
  3. The recall application filed by Baaskaran S. cannot be maintainable owing to his resignation as a director of the Corporate Debtor, a fact which was not disclosed to the Hon’ble NCLAT on two separate occasions when the Hon’ble NCLAT was considering the said appeal.

 

By its judgment, the Hon’ble NCLAT was pleased to dismiss the recall applications filed by Mantri and Baaskaran S. and found that the conditions for recall of its order dated October 14, 2024, were not made out in the present case.

Furthermore, the Hon’ble NCLAT reaffirmed a shareholders’ lack of locus standi to challenge the admission of a corporate debtor to CIRP considering its status as a mere investor and opined that the same cannot be overcome / bypassed by seeking substitution in place of a suspended director considering the statutorily distinct roles.

ACRE was represented by Mr. P. S. Raman, Senior Advocate and Advocate General of Tamil Nadu. The remaining members of the committee of creditors were represented by Mr. Varghese Thomas.

Our Disputes Team comprised Lead Partner, Varghese Thomas, Partners, Aditi Deshpande and Srinivasan M.D., and Associates, Kabir Saund and Dharaniya Sri K.M

JSA successfully obtained a stay order from the Allahabad High Court in criminal proceedings in an alleged case of sexual harassment

The Allahabad High Court, in a significant and swift ruling in a quashing petition, stayed the trial proceedings in an FIR alleging sexual harassment, lodged at the instance of a female ex-employee of the client, against a senior management official of the client.

Based on the evidence on record, the High Court observed that this appears to be a case of an office dispute which is being given the colour of a sexual criminal offence by the ex-employee. While staying the trial proceedings, the High Court also observed that the misuse of the penal laws for personal grievances, regardless of gender, should be discouraged.

Our dispute team comprised of Partner, Padmaja Kaul with support from Principal Associate, Yugank Goel and Senior Associate, Kushagra Sah.

JSA Successfully represented Resolution Professional of Smaaash Entertainment (Corporate Debtor) in obtaining an Order related to Fraudulent & Wrongful Trading

JSA successfully represented Mr. Bhrugesh Amin (“RP”), Resolution Professional of Smaaash Entertainment Private Limited (“Corporate Debtor”), before the Hon’ble National Company Law Tribunal, Mumbai (“NCLT”), in obtaining an order of fraudulent and wrongful trading under the Insolvency and Bankruptcy Code, 2016 (“IBC”).

The application was filed against a transaction wherein the suspended directors of the Corporate Debtor sold fixed assets of the Corporate Debtor to its alter-ego Fun Gateway Arena Private Limited (“FGAPL”) and further provided consultancy services to FGAPL for Rs. 10.38 crores but only received Rs. 1.96 crores. The RP filed an application under Section 66 of the IBC seeking declaration that the transaction was fraudulent and sought a direction against the respondents, including FGAPL and the suspended directors of the Corporate Debtor, to contribute Rs. 8.42 crores to the assets of the Corporate Debtor.

The NCLT, after considering the submissions advanced, declared the transaction as fraudulent and wrongful under Section 66(1) & (2) of the IBC, and also held that:

  • The timelines provided under Regulation 35A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 for filing applications under Section 66 of the IBC are directory and only procedural in nature and non-compliance of the same does not render an application to be invalid.
  • The suspended directors were well aware of the financial position of both Respondent No.1 as well as the Corporate Debtor. The transaction had been entered into between the Corporate Debtor and FGAPL at a time when the Corporate Debtor was already undergoing financial hardships.
  • The suspended directors of the Corporate Debtor have disposed of the assets of the Corporate Debtor despite being aware about the possibility of initiation of insolvency process against the Corporate Debtor and also have failed to exercise due diligence while carrying out the impugned transaction. Furthermore, there has been no attempt by the directors to recover the outstanding dues from Respondent No.1.
  • The transaction was carried out by FGAPL and the suspended directors of the Corporate Debtor, with a fraudulent intent to take away the valuable assets of the Corporate Debtor and transfer the same to FGAPL, which is an alter-ego of the suspended directors of the Corporate Debtor.
  • FGAPL, being the beneficiary of the transaction, and the suspended directors of the Corporate Debtor who carried out the impugned transaction, are liable to make contribution to the assets of the Corporate Debtor; and therefore, directed the respondents, including FGAPL and the suspended directors of the Corporate Debtor, to contribute Rs. 8.42 crores to the assets of the Corporate Debtor.

 

Our disputes team comprised: Lead Partner – Varghese Thomas, Partners – Kunal Kaul and Fatema Kachwalla, and Associate – Virgil Braganza.