The six-acre land parcel owned by Tulip Star Hotel (formerly Centaur Hotel) at Juhu in Mumbai will continue to be entangled in legal battle for some more time, despite the arbitrator allowing termination of sale agreement entered in 2005.
Last week, an arbitration panel ruled against Siddhivinayak Realties – a joint venture between Oberoi Realty, and Shahid Balwa and Vinod Goenka founders of DB Realty – and V Hotels, the current owner of the property, to refund 73 crore to Siddhivinayak within 90 days.
Both Balwa and Goenka are currently in jail and are being probed for their alleged involvement in the irregularities in 2G telecom spectrum allocation.
Siddhivinayak Realties wants the agreement to be honoured to get control of this prime plot on Juhu beach, and has decided to move court to get an injunction against the recent order by the arbitration panel. The company “will pursue such other legal recourse remedies as may be available,” Oberoi Realty said in its filing to the Bombay Stock Exchange.
In 2005, Siddhivinayak Realties had agreed to purchase the hotel from Ajit Kerkar and the Tulip Group for a price of around 300 crore. Following this, the company had submitted 73 crore to Tulip along with 2 crore in an escrow account. Earlier, the property known as Centaur Hotel was acquired by Kerkar and the Tulip Group from Air India’s subsidiary, Hotel Corporation of India, during the privatisation exercise undertaken by the BJP-led National Democratic Alliance Government. However, a Central Bureau of Investigation inquiry was launched in this regard following some allegations of corruption in the sale process.
Siddhivinayak Realties, citing this probe, asked for deferment of transaction completion. However, Kerkar terminated the deal alleging that this was an excuse as Siddhivinayak was unable to raise funds at that time. Following this, both the parties went into arbitration on this issue.
