Vistra ITCL (India) Limited & Anr. vs Sanjay Dattatreya Kakade & Ors.

The present Interim Application has been filed by the Decree Holder seeking following prayers -

I have heard Mr. Gaurav Joshi, learned Senior Counsel on behalf of the Applicant-Decree Holder, and in response Mr. Janak Dwarkadas, learned Senior Counsel on behalf of Respondent Nos.1 & 3 and Mr. Navroze Seervai, Senior Counsel on behalf of Respondent No.2.

Shareholders’ Agreement dated 30 January 2007, was executed between Respondent Nos. 1 and 2 (for short "Kakades") with the Applicants (for short"Vistara"). Pursuant to which Vistara invested capital of Rs. 75 Crores in Respondent No.3-Kakade Construction Company Pvt. Ltd. (for short ‘KCCPL’) by subscription to equity shares and Class 'A' redeemable optional convertible cumulative preference shares.

In the year 2011, dispute arose between the parties. Hence, the matter was referred to Arbitral Tribunal consisting of three retired Supreme Court Judges. Before the Arbitral Tribunal, the parties amicably settled their dispute and filed Consent Terms, pursuant to which ‘Consent Award’ was passed on 14 July 2014. Vistara agreed to accept a reduced claim amount of Rs.178 Crores together with interest from 30 September 2014 till the date of the payment. The reduced decretal amount was to be paid in tranches. The first of the said payment of Rs.10 Crores was paid on 25 July 2014. However, thereafter as there was default on the part of Kakades, Vistara filed Commercial Execution Application before this Court to enforce the “Consent Award”.

In the Commercial Execution Application before the learned Single Judge of this Court, on 19 January 2018, an application under Order XXI, Rule 22 was allowed. So also, by a separate order dated 19 January 2018, in paragraph No. 8, it was recorded in clause No. 7(c)(2) that as per the Consent Award with regard to land admeasuring 22.95 acres at Kothrud, Pune District, the provision that without the consent of the Decree Holder-Vistara, the Kakades would not be able to develop, mortgage or create third party right including, but not limited to development rights of KCCPL in the said land. The learned Single Judge thereafter appointed Receiver in execution of the said land admeasuring 22.95 acres.

As the Execution Application proceeded further, the parties again entered into a settlement, pursuant to which “Consent Terms” were drawn and were signed and executed by the parties on 22 February 2018. The said Consent Terms were taken on record by an order passed on the same day, i.e. on 22 February 2018. As per the said Consent Terms, the Respondents undertook to pay agreed amount in tranches. The first of the said payment of Rs.5 Crores was paid by the Respondents on 21 March 2018.

Clause No. 8 of the said Consent Terms read as under:

Hence, the Respondents had specifically undertaken that they will not obstruct the Court Receiver from taking possession or selling the properties and will also not obstruct the execution of the Consent Award.

However, thereafter the Respondents preferred two Special Leave Petitions challenging the Judgment dated 22 February 2018: One SLP preferred by Kakades and another by KCCPL.

By the Consent Terms executed in the Execution Application before the Bombay High Court on 22 February 2018, Clause 1 specifically recorded that the Respondents confirmed the Consent Award dated 14 July 2014 and withdrew all their challenges raised in Chamber Summons (L) No.160 of 2018 and Chamber Summons (L) No.161 of 2018, both Chamber Summonses filed in Judge’s Order No.74 of 2017, thereby all their objections raised violation of FDI policies and FEMA regulations, as raised by the Respondents, were withdrawn.

So also, Court Receiver was appointed with regard to land admeasuring 18.90 acres situated at Village Hingwane and land admeasuring 10.18 acres at Village Hingwane. So also, all the three Respondents (Sanjay Kakade, Usha Kakade and KCCPL) undertook that in default of making payments, they will be jointly and severally be liable to pay the entire balance amount under the Consent Award and they will not obstruct the Court Receiver in taking possession or selling the properties.

The SLP preferred by Respondent No.3-KCCPL was withdrawn on 7 October 2025. The SLP preferred by Respondent Nos.1 and 2 (Sanjay Kakade and Usha Kakade) was heard on merits, and by an order dated 24 February 2026, the said SLP was rejected. Paragraph Nos.41, 42, 43, 44, 45 and 46 of the said order dated 24 February 2026 read as under (emphasis supplied):

[Emphasis supplied]

Before the Supreme Court, as the Respondents were not ready and willing to pay even the principal amount of Rs.178 Crores, the statement of counsel appearing for the Respondents was recorded that the Court Receiver, who had taken over the assets of Respondent No.3 Company, will put the assets to auction/sale and the amount recovered would be paid to the Decree Holder-Vistara. The Court Receiver was directed to proceed further in accordance with law.

In execution twice attempts were made by the Court Receiver to auction the attached properties. However, since no bidders came forward, the auction failed. Hence, the Court Receiver filed its report being Court Receiver's Report No. 378 of 2023, for further directions. In pursuant thereto, the present Interim Application has been filed.

The Senior Counsel for Respondent No.3-KCCPL has raised objections as regards to violation of FEMA regulations while the Consent Terms were filed. It is pertinent to note that this argument was also raised before the Supreme Court in SLP No. 29597 of 2025, and the said point has been rejected by the Supreme Court. Though Respondent No.3-KCCPL, raised similar kind of issue in its SLP No. 14245 of 2025, they chose to withdraw their SLP, and by an order dated 7 October 2025 their SLP was disposed of as withdrawn. Hence, in my view, Respondents cannot raise the same issue again before this Court.

It was also submitted before me by the learned Senior Counsel, Mr. Joshi, appearing for the Decree Holder that as regards the Criminal PIL filed by the project-affected people of the land in question, the said Criminal PIL was rejected by the Division Bench of this Court by an order dated 12 March 2026. Hence, in present Interim Application filed in Execution Application, intervenors can’t raise any objection.

The Supreme Court had specifically inquired with the Judgment Debtors whether they are ready to deposit the principal amount. The Judgment Debtors had informed the Supreme Court, which was recorded in order dated 24 February 2026, that it was not possible for them and the matter can be proceeded further in execution.

On behalf of the Respondents, following Judgments were cited viz.

Supreme Court in the judgment of Dilip Jiwrajka (supra) held that the purpose of the interim moratorium is to restrain the initiation or continuation of a legal action or proceeding against the debt. To the present proceeding, the ratio laid down in the said judgment is not applicable because in the present proceedings the argument is restricted by the decree holder today only with regards to Respondent No.3.

In the judgment of Sant Lal Gupta (supra), the appellants before the Supreme Court were members of a cooperative housing society. The society had proposed expulsion of the appellants along with few other members. The proposal of the society was rejected by the Registrar, so also in a Revision before the Financial Commissioner. This was challenged by the society before the High Court via a writ petition, which was allowed, hence the appellants, who were the members of the cooperative society were expelled as members of the society. Therefore, Appellants challenged the said order by way of SLP. Supreme Court while allowing the appeal of the appellants held that not only administrative but also judicial orders must be supported by recording reasons. While deciding an issue, the court is bound to give reasons for its conclusion and it was a duty and obligation on the part of the court to record reasons while disposing of its case. The view taken by the Supreme Court in this judgment will not support by any way to the respondents in the present proceedings.

Division Bench of Delhi High Court in the judgment of Jamia Hamdard (supra) was dealing with an issue wherein by the impugned order, the executing court directed a third party in an arbitration proceedings to issue the consent of affiliation required for 150 MBBS seats at the Hamdard Institute of Medical Sciences and Research for the academic year 2025-2026. The Division Bench held that the executing court can't travel beyond the scope of ambit of Order passed under Section 17 of the Arbitration Act, thereby directing a party who is not a party before the Arbitral Tribunal and nor a party to the arbitration agreement, hence dismissed the application preferred under the provisions of Order XXI Rule 32 of CPC.

The Single Judge of this Court in the judgment of Jotun India Private Limited (supra) was dealing with the issue of the distinction between the provisions of Companies Act and the IBC. The learned Judge held that under the Companies Act, winding up would be a matter for the Court alone to decide, whereas under the IBC, there is a paradigm shift inasmuch as it displaces the management of the company and an IRP is appointed and the Committee of Creditors is left to decide the fate of the company.

The law as laid down in the above-mentioned judgments would not help the present Respondents-Judgment Debtors. Here is a case where, in the arbitration proceedings, Consent Award was passed. There was a default on the part of the Judgment Debtors; hence, Execution Application was filed. In the Execution Application again, Consent Terms were entered into between the parties and there was an undertaking given by the Judgment Debtors. They have violated that undertaking. Hence, the commercial execution proceedings proceeded further. The Consent Terms which were taken on record by a Single Judge of this Court, even that order was challenged before the Supreme Court. The Supreme Court has rejected the said SLP filed by Respondent Nos.1 and 2 on merits. Respondent No.3 themselves (KCCPL) chose to withdraw their SLP Hence, in my view the present Interim Application needs to be allowed.

Interim Application stands allowed in terms of prayer clauses (i)(a), (i)(b) and (ii).