Full Judgment Text
1
REPORTABLE
2025 INSC 585
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (C) NO. 7301 OF 2025
GBJ HOTELS PRIVATE LIMITED …PETITIONER
VERSUS
SRIHARAN SRIPATHMANATHAN & ORS. …RESPONDENTS
O R D E R
1
1. GBJ Hotels Private Limited is the petitioner in this special leave petition,
th
which impugns an order dated 6 March 2025 passed by the High Court of
2 3 4
Judicature at Madras on a writ petition presented by the respondents 1 and
5
2 .
2. Respondents 1 and 2 had received financial assistance provided by Edelweiss
Finvest Limited. The debt was then assigned to Edelweiss Asset
6
Reconstruction Company Limited, respondent no.3 . Respondents 1 and 2
committed default in repayment of their dues. As borrowers, the respondents
1 and 2 owed approximately Rs. 135 crore to the Edelweiss ARCL as on date
the impugned order was passed (recorded in paragraph no.4 thereof). In the
writ petition, the respondents 1 and 2 had challenged an order of the
relevant Debts Recovery Appellate Tribunal, whereby they were ordered to
Signature Not Verified
Digitally signed by
JATINDER KAUR
Date: 2025.04.29
17:18:09 IST
Reason:
1 GBJ Hotels
2 High Court
3 Writ Petition No. 1001 of 2025
4 Sriharan Sriparthmanathan
5 Asiana Hotel Management Company PTE Limited
6 Edelweiss ARCL
2
deposit 50% of the sum due, i.e., a little less than Rs.36 crore.
3. Pertinently, in pursuance of proceedings under the SARFAESI Act, 2002, an
auction was conducted. Bid of GBJ Hotels for a sum of Rs.108 crore was
accepted by Edelweiss ARCL.
th
4. Prior to the impugned order, the High Court had passed two orders on 26
th
February 2025 and 5 March, 2025.
th
5. Upon perusal of the order dated 26 February, 2025, it appears that counsel
for the respondent no.1 submitted that he “is ready with a third party who is
ready to pay Rs. 120 crores for the same property, which is being sold for Rs.
108 Crores” . Pursuant to this submission, the High Court directed the sum of
Rs. 120 crore to be kept in deposit to show the bona fides of interested
parties. The third party, although not named in the order, appears to be GRT
7
Hotels & Resorts Private Limited . This is clear upon a perusal of the letter of
intent dated 4th March, 2025 addressed to the respondent no.1 whereby GRT
8
Hotels expressed its intent to purchase the assets of the respondent no.4
(wherein the respondents 1 and 2 were directors) and which was under a
process of corporate insolvency.
6. Thereafter, the said letter, along with a memorandum of compliance (stating
th
deposit of Rs. 120 crore pursuant to the order dated 26 February, 2025) and
demand draft for the said sum, were placed before the High Court. The High
th
Court vide order dated 5 March, 2025 acknowledged the same. Learned
counsel for GBJ Hotels was directed to obtain instructions as to whether it
was willing to improve its offer.
7. No doubt, GBJ Hotels emerged as the successful auction purchaser in the
process of sale conducted by Edelweiss ARCL. However, faced with the
7 GRT Hotels
8 Malabar Hotels Private Limited
3
situation that the High Court, in course of hearing, was informed of the offer
of GRT Hotels that it had kept in deposit with the Registry of the High Court a
th
sum of Rs.120 crore in terms of the order dated 26 February, 2025, the High
Court had extended an opportunity to GBJ Hotels to improve its offer.
th
Learned counsel appearing on its behalf on 6 May, 2025 expressed inability
to pay a penny more than Rs.108 crore. The High Court thus felt, “better the
price, better it is for the creditor” . The concluding part of the impugned
order, which records that Edelweiss ARCL has agreed to accept the offer of
GRT Hotels and to return the deposit of GBJ Hotels, left GBJ Hotels aggrieved
triggering this petition primarily on the ground that sanctity of the auction
under the SARFAESI Act has been breached in the process.
th
8. This special leave petition was considered by us on 24 March, 2025, for the
first time. On the oral prayer of Dr. Singhvi, learned senior counsel, GRT
Hotels was impleaded as the respondent no.8 in the special leave petition.
On the same date, while directing relisting of the special leave petition on
th
28 March, 2025, we invited GBJ Hotels and GRT Hotels to improve their bids
th
and submit the same in sealed covers by 27 March, 2025. Obviously, this
was in exercise of our inherent power to fetch the best of offers when the
secured asset was reportedly worth much more than what was offered before
the High Court.
th
9. Order dated 28 March, 2025 passed by us recorded as follows:
“1. Pursuant to the earlier order dated March 24, 2025, GBJ Hotels
Private Limited/petitioner and GRT Hotels and Resorts Pvt.
Ltd./respondent no.8 have submitted their offers in sealed covers.
2. Respondent no.8 outbids the petitioner by almost Rupees seventeen
crore by offering Rupees one hundred fifty-three crore.
3. We call upon the respondent no.8 to deposit, with the Registry of
th
this Court, Rupees thirty-three crore by 9 April, 2025. In default, the
bid of the petitioner will be considered together with forfeiture of such
amount out of Rupees one hundred twenty crore deposited by the
4
respondent no.8 earlier as this Court would deem fit and proper.
4. In case the deposit is made by the respondent no.8, Registry shall
invest the said amount in a short-term fixed deposit interest bearing
account of a nationalized bank on auto renewal basis, until further
order.
th
5. Relist the special leave petition on 17 April, 2025.”
th
10. The next order dated 17 April, 2025 went on to record that GRT Hotels had,
th
in compliance with the order dated 28 March, 2025, deposited in the
Registry an additional sum of Rupees 33 crore, which was invested in
compliance with the directions contained in such order. GRT Hotels was
declared to be the successful bidder. However, Edelweiss ARCL was called
upon to file an affidavit within a week from date indicating therein the sum
that the respondents 1 and 2 as borrowers owed to it on the date the
impugned order was passed by the High Court, with particulars. It was also
recorded that Rs. 27 crore had been paid by Edelweiss ARCL to GBJ Hotels on
18th March, 2025 and that the question of awarding interest on the said sum
of Rs. 27 crore shall be considered on the next date. The special leave
th
petition was directed to be relisted on 28 April, 2025.
th
11. In compliance with the order dated 17 April, 2025, Edelweiss ARCL has filed
an additional affidavit. In paragraph 10 of such affidavit, it is pleaded that the
debt is to the tune of Rs.1,86,23,72,734.
12. Having regard to the current position when GRT Hotels has put in what was
th
required of it in terms of the order dated 28 March, 2025 but Edelweiss ARCL
claims that the debt much exceeds what it has received from GRT Hotels, we
have heard objections being raised with regard to the contents of the
additional affidavit of Edelweiss ARCL as well a contention that the secured
asset has been sold to GRT Hotels at a throwaway price.
13. At this juncture, we do not consider it necessary to examine the quantum of
5
debt. The best available offer has been accepted. We are only tasked today to
determine the rate of interest payable by Edelweiss ARCL to GBJ Hotels on the
sum of Rs.27 crore which has been returned to the latter by the former and to
also pass consequential directions with regard to declaration of GRT Hotels as
the successful bidder.
14. Learned counsel appearing for Edelweiss ARCL has left the rate of interest to
be awarded to our discretion. We direct that the sum of Rs.27 crore which has
been returned to GBJ Hotels, shall carry interest at the rate of 18% per annum
as follows:
a. on Rs. 10.80 crore, from 18.05.2024 to 18.03.2025; and
b. on Rs. 16.20 crore from 23.05.2025 to 18.03.2025.
15. Let the sum on account of interest be paid within 7 (seven) days.
16. We are informed that sale certificate has been issued in favour of GRT Hotels
by Edelweiss ARCL.
17. Sale certificate having been issued, steps for delivery of peaceful and vacant
possession of the assets of the respondent no.4 in favour of GRT Hotels and
all other consequential steps, if any, shall be taken by Edelweiss ARCL in
accordance with law within a month from date.
18. We clarify not having examined the claim of Edelweiss ARCL that the debt is
now somewhere near Rs.186 crore + and that only Rs.153 crore could be
recovered in course of the process of bidding that was undertaken pursuant
th
to our order dated 28 March, 2025.
19. All questions, except the sale which stands confirmed, are left open for the
parties to agitate before an appropriate forum in accordance with law, if so
advised.
6
20. Edelweiss ARCL shall be at liberty to approach the Registry with a prayer for
withdrawal of Rs.33 crore deposited by GRT Hotels. Once such approach is
made, the said amount with accrued interest, if any, shall be released in
favour of Edelweiss ARCL as early as possible.
21. With the aforesaid directions/observations, the special leave petition stands
disposed of.
22. This order is passed in the special facts and circumstances of this case and is
not to be treated as a precedent.
………..…………………J.
(DIPANKAR DATTA)
…….……..………………J.
(MANMOHAN)
NEW DELHI.
APRIL 28, 2025.
7
ITEM NO.52 COURT NO.14 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal(C) No(s). 7301/2025
[Arising out of impugned final judgment and order dated 06-03-2025
in WP No. 1001/2025 passed by the High Court of Judicature at
Madras]
GBJ HOTELS PRIVATE LIMITED Petitioner(s)
VERSUS
SRIHARAN SRIPATHMANATHAN & ORS. Respondent(s)
IA No. 66602/2025 - EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT
IA No. 67567/2025 - PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/
ANNEXURES
Date : 28-04-2025 This matter was called on for hearing today.
CORAM : HON'BLE MR. JUSTICE DIPANKAR DATTA
HON'BLE MR. JUSTICE MANMOHAN
For Petitioner(s) :Mr. G. Balaji, AOR
Mr. Neeleshwar Pavani, Adv.
Ms. Arzu Paul, Adv.
For Respondent(s) :Mr. Rajeeve Mehra, Sr. Adv.
Mr. Anush Raajan, AOR
Mr. Pradyumn Yadav, Adv.
Mr. Rajiv Shakdher, Sr. Adv.
Mr. Jose John, Adv.
Ms. Surekha Raman, Adv.
Mr. M. Narendran, Adv.
Mr. D.Prajesh, Adv.
Mr. Shreyash Kumar, Adv.
Mr. Karan Khetani, Adv.
Ms. Maithili Moondra, Adv.
Mr. Jonathan Ivan Rajan, Adv.
M/S. K J John And Co, AOR
Mr. Shyam Divan, Sr. Adv.
Mr. S. Ravi, Sr. Adv.
Mrs. Indu Mathi Ravi, Adv.
Mr. R. Sanjeev, Adv.
Mr. V. Ramasubramanian, AOR
8
Mr. Satish Parasaran, Sr. Adv.
Mr. Vishnu Mohan, Adv.
Mr. Ravi Raghunath, AOR
UPON hearing the counsel the Court made the following
O R D E R
1. The special leave petition stands disposed of in terms of the reportable
order.
2. Pending application(s), if any, stand disposed of.
(JATINDER KAUR) (SUDHIR KUMAR SHARMA)
P.S. to REGISTRAR COURT MASTER (NSH)
[Signed reportable order is placed on the file]
REPORTABLE
2025 INSC 585
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (C) NO. 7301 OF 2025
GBJ HOTELS PRIVATE LIMITED …PETITIONER
VERSUS
SRIHARAN SRIPATHMANATHAN & ORS. …RESPONDENTS
O R D E R
1
1. GBJ Hotels Private Limited is the petitioner in this special leave petition,
th
which impugns an order dated 6 March 2025 passed by the High Court of
2 3 4
Judicature at Madras on a writ petition presented by the respondents 1 and
5
2 .
2. Respondents 1 and 2 had received financial assistance provided by Edelweiss
Finvest Limited. The debt was then assigned to Edelweiss Asset
6
Reconstruction Company Limited, respondent no.3 . Respondents 1 and 2
committed default in repayment of their dues. As borrowers, the respondents
1 and 2 owed approximately Rs. 135 crore to the Edelweiss ARCL as on date
the impugned order was passed (recorded in paragraph no.4 thereof). In the
writ petition, the respondents 1 and 2 had challenged an order of the
relevant Debts Recovery Appellate Tribunal, whereby they were ordered to
Signature Not Verified
Digitally signed by
JATINDER KAUR
Date: 2025.04.29
17:18:09 IST
Reason:
1 GBJ Hotels
2 High Court
3 Writ Petition No. 1001 of 2025
4 Sriharan Sriparthmanathan
5 Asiana Hotel Management Company PTE Limited
6 Edelweiss ARCL
2
deposit 50% of the sum due, i.e., a little less than Rs.36 crore.
3. Pertinently, in pursuance of proceedings under the SARFAESI Act, 2002, an
auction was conducted. Bid of GBJ Hotels for a sum of Rs.108 crore was
accepted by Edelweiss ARCL.
th
4. Prior to the impugned order, the High Court had passed two orders on 26
th
February 2025 and 5 March, 2025.
th
5. Upon perusal of the order dated 26 February, 2025, it appears that counsel
for the respondent no.1 submitted that he “is ready with a third party who is
ready to pay Rs. 120 crores for the same property, which is being sold for Rs.
108 Crores” . Pursuant to this submission, the High Court directed the sum of
Rs. 120 crore to be kept in deposit to show the bona fides of interested
parties. The third party, although not named in the order, appears to be GRT
7
Hotels & Resorts Private Limited . This is clear upon a perusal of the letter of
intent dated 4th March, 2025 addressed to the respondent no.1 whereby GRT
8
Hotels expressed its intent to purchase the assets of the respondent no.4
(wherein the respondents 1 and 2 were directors) and which was under a
process of corporate insolvency.
6. Thereafter, the said letter, along with a memorandum of compliance (stating
th
deposit of Rs. 120 crore pursuant to the order dated 26 February, 2025) and
demand draft for the said sum, were placed before the High Court. The High
th
Court vide order dated 5 March, 2025 acknowledged the same. Learned
counsel for GBJ Hotels was directed to obtain instructions as to whether it
was willing to improve its offer.
7. No doubt, GBJ Hotels emerged as the successful auction purchaser in the
process of sale conducted by Edelweiss ARCL. However, faced with the
7 GRT Hotels
8 Malabar Hotels Private Limited
3
situation that the High Court, in course of hearing, was informed of the offer
of GRT Hotels that it had kept in deposit with the Registry of the High Court a
th
sum of Rs.120 crore in terms of the order dated 26 February, 2025, the High
Court had extended an opportunity to GBJ Hotels to improve its offer.
th
Learned counsel appearing on its behalf on 6 May, 2025 expressed inability
to pay a penny more than Rs.108 crore. The High Court thus felt, “better the
price, better it is for the creditor” . The concluding part of the impugned
order, which records that Edelweiss ARCL has agreed to accept the offer of
GRT Hotels and to return the deposit of GBJ Hotels, left GBJ Hotels aggrieved
triggering this petition primarily on the ground that sanctity of the auction
under the SARFAESI Act has been breached in the process.
th
8. This special leave petition was considered by us on 24 March, 2025, for the
first time. On the oral prayer of Dr. Singhvi, learned senior counsel, GRT
Hotels was impleaded as the respondent no.8 in the special leave petition.
On the same date, while directing relisting of the special leave petition on
th
28 March, 2025, we invited GBJ Hotels and GRT Hotels to improve their bids
th
and submit the same in sealed covers by 27 March, 2025. Obviously, this
was in exercise of our inherent power to fetch the best of offers when the
secured asset was reportedly worth much more than what was offered before
the High Court.
th
9. Order dated 28 March, 2025 passed by us recorded as follows:
“1. Pursuant to the earlier order dated March 24, 2025, GBJ Hotels
Private Limited/petitioner and GRT Hotels and Resorts Pvt.
Ltd./respondent no.8 have submitted their offers in sealed covers.
2. Respondent no.8 outbids the petitioner by almost Rupees seventeen
crore by offering Rupees one hundred fifty-three crore.
3. We call upon the respondent no.8 to deposit, with the Registry of
th
this Court, Rupees thirty-three crore by 9 April, 2025. In default, the
bid of the petitioner will be considered together with forfeiture of such
amount out of Rupees one hundred twenty crore deposited by the
4
respondent no.8 earlier as this Court would deem fit and proper.
4. In case the deposit is made by the respondent no.8, Registry shall
invest the said amount in a short-term fixed deposit interest bearing
account of a nationalized bank on auto renewal basis, until further
order.
th
5. Relist the special leave petition on 17 April, 2025.”
th
10. The next order dated 17 April, 2025 went on to record that GRT Hotels had,
th
in compliance with the order dated 28 March, 2025, deposited in the
Registry an additional sum of Rupees 33 crore, which was invested in
compliance with the directions contained in such order. GRT Hotels was
declared to be the successful bidder. However, Edelweiss ARCL was called
upon to file an affidavit within a week from date indicating therein the sum
that the respondents 1 and 2 as borrowers owed to it on the date the
impugned order was passed by the High Court, with particulars. It was also
recorded that Rs. 27 crore had been paid by Edelweiss ARCL to GBJ Hotels on
18th March, 2025 and that the question of awarding interest on the said sum
of Rs. 27 crore shall be considered on the next date. The special leave
th
petition was directed to be relisted on 28 April, 2025.
th
11. In compliance with the order dated 17 April, 2025, Edelweiss ARCL has filed
an additional affidavit. In paragraph 10 of such affidavit, it is pleaded that the
debt is to the tune of Rs.1,86,23,72,734.
12. Having regard to the current position when GRT Hotels has put in what was
th
required of it in terms of the order dated 28 March, 2025 but Edelweiss ARCL
claims that the debt much exceeds what it has received from GRT Hotels, we
have heard objections being raised with regard to the contents of the
additional affidavit of Edelweiss ARCL as well a contention that the secured
asset has been sold to GRT Hotels at a throwaway price.
13. At this juncture, we do not consider it necessary to examine the quantum of
5
debt. The best available offer has been accepted. We are only tasked today to
determine the rate of interest payable by Edelweiss ARCL to GBJ Hotels on the
sum of Rs.27 crore which has been returned to the latter by the former and to
also pass consequential directions with regard to declaration of GRT Hotels as
the successful bidder.
14. Learned counsel appearing for Edelweiss ARCL has left the rate of interest to
be awarded to our discretion. We direct that the sum of Rs.27 crore which has
been returned to GBJ Hotels, shall carry interest at the rate of 18% per annum
as follows:
a. on Rs. 10.80 crore, from 18.05.2024 to 18.03.2025; and
b. on Rs. 16.20 crore from 23.05.2025 to 18.03.2025.
15. Let the sum on account of interest be paid within 7 (seven) days.
16. We are informed that sale certificate has been issued in favour of GRT Hotels
by Edelweiss ARCL.
17. Sale certificate having been issued, steps for delivery of peaceful and vacant
possession of the assets of the respondent no.4 in favour of GRT Hotels and
all other consequential steps, if any, shall be taken by Edelweiss ARCL in
accordance with law within a month from date.
18. We clarify not having examined the claim of Edelweiss ARCL that the debt is
now somewhere near Rs.186 crore + and that only Rs.153 crore could be
recovered in course of the process of bidding that was undertaken pursuant
th
to our order dated 28 March, 2025.
19. All questions, except the sale which stands confirmed, are left open for the
parties to agitate before an appropriate forum in accordance with law, if so
advised.
6
20. Edelweiss ARCL shall be at liberty to approach the Registry with a prayer for
withdrawal of Rs.33 crore deposited by GRT Hotels. Once such approach is
made, the said amount with accrued interest, if any, shall be released in
favour of Edelweiss ARCL as early as possible.
21. With the aforesaid directions/observations, the special leave petition stands
disposed of.
22. This order is passed in the special facts and circumstances of this case and is
not to be treated as a precedent.
………..…………………J.
(DIPANKAR DATTA)
…….……..………………J.
(MANMOHAN)
NEW DELHI.
APRIL 28, 2025.
7
ITEM NO.52 COURT NO.14 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal(C) No(s). 7301/2025
[Arising out of impugned final judgment and order dated 06-03-2025
in WP No. 1001/2025 passed by the High Court of Judicature at
Madras]
GBJ HOTELS PRIVATE LIMITED Petitioner(s)
VERSUS
SRIHARAN SRIPATHMANATHAN & ORS. Respondent(s)
IA No. 66602/2025 - EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT
IA No. 67567/2025 - PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/
ANNEXURES
Date : 28-04-2025 This matter was called on for hearing today.
CORAM : HON'BLE MR. JUSTICE DIPANKAR DATTA
HON'BLE MR. JUSTICE MANMOHAN
For Petitioner(s) :Mr. G. Balaji, AOR
Mr. Neeleshwar Pavani, Adv.
Ms. Arzu Paul, Adv.
For Respondent(s) :Mr. Rajeeve Mehra, Sr. Adv.
Mr. Anush Raajan, AOR
Mr. Pradyumn Yadav, Adv.
Mr. Rajiv Shakdher, Sr. Adv.
Mr. Jose John, Adv.
Ms. Surekha Raman, Adv.
Mr. M. Narendran, Adv.
Mr. D.Prajesh, Adv.
Mr. Shreyash Kumar, Adv.
Mr. Karan Khetani, Adv.
Ms. Maithili Moondra, Adv.
Mr. Jonathan Ivan Rajan, Adv.
M/S. K J John And Co, AOR
Mr. Shyam Divan, Sr. Adv.
Mr. S. Ravi, Sr. Adv.
Mrs. Indu Mathi Ravi, Adv.
Mr. R. Sanjeev, Adv.
Mr. V. Ramasubramanian, AOR
8
Mr. Satish Parasaran, Sr. Adv.
Mr. Vishnu Mohan, Adv.
Mr. Ravi Raghunath, AOR
UPON hearing the counsel the Court made the following
O R D E R
1. The special leave petition stands disposed of in terms of the reportable
order.
2. Pending application(s), if any, stand disposed of.
(JATINDER KAUR) (SUDHIR KUMAR SHARMA)
P.S. to REGISTRAR COURT MASTER (NSH)
[Signed reportable order is placed on the file]