While accepting the duo’s request to suspend the order, the court said on Wednesday that the order sentencing them would come automatically into force if they again failed to make the payment in tranches by the end of September, as promised under the revised terms.
The court also asked both Rajen and Hiren Dhruv to deposit their passports with the court till they comply with the directions on the payment to the lender.
Nishit Dhruva, managing partner of law firm MDP & Partners who represented Axis Finance, refused to divulge any details, saying that the matter was sub judice. Lawyers for Orbit Ventures could not be reached for comment.
The Bombay High Court had restrained Orbit Ventures from dealing with or creating any third-party interest in the personal properties of the partners, on a petition by Axis Finance after the company failed to honour its agreement on repaying the loan that had already turned a non-performing asset.
Axis Finance had lent Rs 130 crore to Orbit Ventures in September 2017. Securities against the loan included 12 unsold flats in a project in Mumbai’s Andheri suburb and receivables from another 54 identified flats.
The company had also created a mortgage on a half-acre plot in Mumbai’s Vile Parle. The developer defaulted on making the repayment and the account turned NPA in December 2019.
Axis Finance then commenced action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (Sarfaesi) Act, and the developer was restrained from alienating any of the securities.
In July 2020, the developer assured Axis Finance that it was expecting to receive Rs 100 crore from the sale of the unsold flats and Rs 90 crore towards balance receivables. Despite this, no payments were made and the lender took a symbolic possession of the security under the Sarfaesi Act in October 2020.
The developer informed the lender on January 1, 2021 that the receivables from the sale of the flats were expected to generate only around Rs 47.36 crore and that the nine unsold flats would be sold by August 2021 for around Rs 95 crore. No explanation was provided about how the receivables had reduced and the number of unsold flats reduced to nine from 12, according to Axis Finance.
Axis Finance consequently filed a suit against the developer in January 2021.