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Woes mount for Orbit Corp as court puts travel curbs on CEO, chairman

16 September, 2016

In fresh trouble for Orbit Corporation, the Bombay High Court has directed the developer’s chief executive Pujit Aggarwal and chairman Ravikiran Aggarwal to not leave the country without its permission.

The court order came on a petition filed by another city-based real estate company Vardhman Developers Ltd to recover around Rs 118 crore from Orbit. 

Justice SJ Kathawala, while hearing the plea filed by Vardhman Developers, also directed some other subsidiaries of Orbit Corp to not sell any movable or immovable properties, except in the ordinary course of business.

This the second blow to Orbit this month, after Pujit Aggarwal was arrested by Mumbai police in a separate case of cheating, filed by Capri Global Capital Ltd. 

The genesis of the dispute between Orbit and Vardhman goes back to September 2007 when the two real estate companies signed an agreement. Under the agreement, Vardhman agreed to transfer its right over a land parcel of 4,719.41 square metre in Lower Parel, in central Mumbai, to Orbit to construct a building. Vardhman was to get 21,676 sq ft carpet area, 2,142 sq ft terrace area between 47 and 57 floors in the building and parking space for 30 cars.

However, according to the petition filed by Vardhman, Orbit delayed compliances of its obligations and authorities gave it permission to build the structure till 25 floors only. Subsequently, both parties agreed through consent terms in May 2015 that Orbit would seek permission from the Municipal Corporation of Greater Mumbai to build floors from 48 to 58 and will hand it over to Vardhman within six months. 

This period could be extended for six months, but in the case of failure Vardhman was to get 18% interest along with Rs 118 crore liquidation damages. Under the agreement, if Orbit failed to get the necessary approvals within a year and the extended six months, it had to pay Rs 40 crore by May 2016 and Rs 39 crore by the end of each quarter.

Orbit gave post-dated cheques to Vardhman after the pact. However, Vardhman claimed that when it initiated the process to cash in the cheque after the deadline, the bank accounts of Orbit were blocked. 

On 7 September, when the case came up for hearing, lawyers representing Orbit argued that since CEO Pujit Aggarwal was in jail, the company was not in a position to take any decision. After hearing the arguments, the court posted the hearing of the case on 21 September. The court also asked the company’s chairman and Pujit’s father, Ravikiran Aggarwal, to be present in the court. Pujit Aggarwal was sent to police custody till 12 September by a lower court which is hearing Capri Global’s complaint. His custody has been extended till 20 September. 

When contacted, Dipesh Vardhan, director at Vardhman, confirmed the high court’s direction but refused to comment any further. Queries to Orbit remained unanswered. 

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Woes mount for Orbit Corp as court puts travel curbs on CEO, chairman

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