ITC set to get prized Goa hotel after three years of legal battle

Diversified conglomerate ITC Ltd is finally set to get possession of the iconic 250-key five-star Park Hyatt Goa Resort & Spa, three years after it bought the rights to the property during an auction under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, 2002.

A recent Supreme Court ruling, setting aside the earlier judgement of the Bombay High Court to revoke the sale of the property, has put an end to the prolonged legal battle with the previous owner Blue Coast Hotels Ltd (BHCL).

"Supreme Court vide its judgement dated March 19, 2018, has allowed the appeals filed by the company and IFCI (previously Industrial Finance Corporation of India) and set aside the aforesaid judgement of the Bombay High Court. The Hon'ble Supreme Court has also upheld the sale and ordered BCHL to hand over the property to the company within six months along with the relevant accounts," ITC said in a statement on Wednesday.

The possession of the property on Arossim beach in Goa beach after a protracted legal battle still makes sense as hotel, bought for bid price of Rs 515 crore plus stamp duty of Rs 26 crore in an auction by IFCI, gives ITC rights to 45 acres of prime land including 500 metres of beach front, sources in ITC said.

ITC, however, it is yet to draw up its future plans for the property as the ruling has just come in and plans at this stage is till premature, they said.

One of the reasons P L Suri, the erstwhile promoter, went to court opposing the sale was his claim that the worth of the property including the land and the hotel is not less than Rs 1,200 crore, more than double of what ITC paid.

ITC, in 2015, emerged as the highest bidder for Park Hyatt Hotel during an auction by financial institution IFCI under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It had bid Rs 515.4 crore against the reserve price of Rs 543 crore.

"Soon after, Blue Coast Hotels challenged the said sale before the Hon'ble Bombay High Court and the court vide judgement dated March 23, 2016, set aside the sale and directed IFCI to refund the sale consideration to the company. On appeal filed by the company and IFCI Ltd, the Hon'ble Supreme Court vide interim judgement dated April 22, 2016, directed maintenance of status quo and that the amount paid by the company shall remain with IFCI Ltd," ITC said.

Apart from the sale price, the erstwhile promoter's objection was also about IFCI's alleged move to go for the auction even though Suri was negotiating the settlement of his debt.

...& ANALYSIS

• One of the reasons the erstwhile promoter went to court opposing the sale was his claim that the worth of the property including the land and the hotel is not less than Rs 1,200 crore, more than double of what ITC paid
   
• Apart from the sale price, the erstwhile promoter's objection was also about IFCI's alleged move to go for the auction even though Suri was negotiating the settlement of his debt