Madras Race Club can sell property to DLF, says HC

A division bench comprising Justice R Subbiah and Justice PD Audikesavalu on dismissing the civil appeal moved by a MRC member seeking to stall the sale, said, “We are of the view that the present action of the appellant (MRC member) in instituting the suit and the original applications will in no way benefit the interest of MRC, rather, it would only frustrate its action to settle the prolonged sale transaction they have entered with DLF Universal.” 

“We are therefore of the view that the appellant remained a stumbling block and deprived MRC from entering the sale transaction legitimately with DLF Universal, for no cause or reason.  Therefore, we are inclined to dismiss these appeals by confirming the order passed by the single Judge,” the bench added. 

The appellant A Viswanathan had contended that when the Memorandum of Understanding (MOU) entered into between MRC and DLF clearly stipulate that the minimum sale price for the property in favour of the second respondent was Rs 325 crore, the decision taken by MRC on January 7 to sell the same to DLF at  Rs 300 crore, that too without consulting the committee members, is arbitrary and would cause monetary loss to MRC. 

On the other hand, MRC, on narrating the lease process that had commenced in 2006 and the subsequent default and arbitration proceedings before the Arbitral Tribunal consisting of three retired Judges of the Supreme Court, which led to the sale consideration, said the filing of the present suit and the Original Applications by the appellant are an afterthought and it clearly reveals the malafide intention on his part to stall the legitimate sale transaction with DLF, which was also accepted by many of the members of MRC. 

Also, the single Judge, in his order had concluded that the balance of convenience is in favour of the both MRC and DLF because DLF has admittedly paid Rs 60 crore even during 2006 and they have got an accrued right and interest over the property.  Moreover, the sale transactions are also approved by the Management committee of MRC, the judge had held.