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SUN-AREA Property Partners files special leave petition against Rustomjee at Supreme Court

In a transaction gone sour, SUN-AREA had invested Rs 234.9 crore in Rustomjee Group’s holding company Keystone Realtors over three years ago.
BY  Pooja Sarkar

SUN-AREA Property Partners (formerly SUN-Apollo) has filed a special leave petition against Mumbai-based property developer Rustomjee at the Supreme Court. The apex court in a order passed on November 8, has given two weeks to Rustomjee to file its response and subsequent two weeks to the petitioner, SUN-AREA, to file its rejoinder, thus listing the case for hearing after four weeks.

In a transaction gone sour, SUN-AREA had invested Rs 234.9 crore (out of the proposed sum of approximately Rs 300 crore) in Rustomjee Group’s holding company Keystone Realtors over three years ago.

Earlier this year, the real estate-focused fund’s two associate companies, Mausmi SA Investments LLC Private Equity fund based in Mauritius and Cyprus-based Mausmi Ventures, had filed a case against the developer, alleging fraud, misutilisation of funds and default in payment of interest, among other violations, as per the shareholders’ agreement.

SUN-AREA got an interim relief on Aug 8 after a petition to CLB. However, Rustomjee appealed against this and it was set aside by the Bombay High Court, which also ordered the CLB to hear the ad-interim application. CLB in its order dated October 12, 2012 dismissed the ad-interim petition filed by the investment firm and had asked both the parties to undergo arbitration as defined in their shareholders’ agreement clause.

SUN-AREA had appealed again at the Bombay High Court, which dismissed the appeal by the real estate-dedicated private equity firm last week, following which SUN-AREA approached Supreme Court.

The Supreme Court has also lifted the stay granted by the Bombay High Court on sale of floor space index (FSI) by the developer, though the court has said that if the developer wishes to sell the FSI, it will have to provide due notice to the petitioner and in the event that the petitioner is able to give a better offer and it will be up to the petitioner to do so and as submitted on behalf of the respondents, the same will be duly accepted.

The Supreme Court also said that the question of maintainability raised by the respondent is kept open for consideration at the time of hearing of the matter.

(Edited by Prem Udayabhanu)

(Rustomjee developers)

Keystone Realtors Pvt. Ltd. is a real estate development company. It develops residential complexes, premium homes and educational institutions. The company was founded in 1996 and is based in Mumbai, Maharashtra. The company is a subsidiary of Rustomjee Developers.

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Boman Rustom Irani
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