Mr. Pranav Sachdeva, Mr. P. Rohit Ram, Mr. Abhay Nair and Mr. Sanyam Jain v. UNION OF INDIA AND ORS

Judgment

1. The contours of public interest litigation, premised on allegations of perceived corruption in purely commercial dealings between private parties, are required to be delineated by us in this writ petition.

2. We have heard Mr. Prashant Bhushan, learned Counsel for the petitioner, Mr. R. Venkataramani, the learned Attorney General for the Punjab National Bank1, Mr. N. Venkatraman, the learned Additional Solicitor General2 for the Bank of Maharashtra3, Mr. Amit Tiwari, learned CGSC for the Union of India through the Ministry of Finance4, Mr. Mukul Rohatgi and Mr. Rajiv Nayar, learned Senior Counsel for Asian Hotels (North) Pvt Ltd5, Mr. Ravinder Agarwal for the Central Vigilance Commission6 and Mr. Anupam S. Sharma for the 1 “PNB” hereinafter 2 “ASG” hereinafter 3 “BOM” hereinafter 4 “MOF” hereinafter 5 “AHN” hereinafter 6 “CVC” hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06 Central Bureau of Investigation7, of whom the CBI and CVC are pro forma parties, and have not contested the writ petition.

3. The respondents have, in one voice, opposed issuance of notice in the writ petition, submitting, inter alia, that even entertainment of this writ petition would throw the entire system of bona fide commercial dealings through banking channels into complete disarray.

4. Detailed written submissions have also been filed by the petitioner, the Union of India, the BOM, the SBI and AHN. Facts

5. Case of petitioner in the writ petition

5.1 The case set up by the petitioner in the writ petition, is as follows.

5.2 AHN availed loans from six banks, including BOM and PNB. Four of the banks sold their loans to third parties, and the said loans are not subject matter of the writ petition. The petition is concerned with the loans advanced by BOM and PNB to AHN.

5.3 AHN owns the Hyatt Regency Hotel8 at Madame Bhikaji Cama Place, New Delhi. On 3 June 2021, BOM wrote to AHN, agreeing to extend, to AHN, the moratorium on loans put in place during the 7 “CBI” hereinafter 8 “the Hotel” hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06 COVID-19 pandemic. The said letter referred to the valuation of the Hotel by two valuers, B.D. Sahni9 and Ratan Dev Garg10. Sahni valued the hotel at ₹ 2600.12 crores and Garg valued the hotel at ₹

2651.39 crores.

5.4 Pleading that it was not financially in a position to liquidate the loans availed by it, AHN approached the Bank for a One Time Settlement11 in 2024. PNB appointed Garg as the valuer to value the hotel, which AHN offered as security. Garg valued the hotel at ₹

970.11 crores. The net value, after deducting property tax payable to the Municipal Corporation of Delhi12, was ₹ 865.77 crores. The valuation was done a day after inspection of the property.

5.5 On 30 September 2024, AHN also approached BOM for an OTS. It valued the hotel, in the said proposal, on the basis of the valuation done by M/s Cushman & Wakefield, valuers, at ₹ 1019.50 crores from which, after excluding tax payable to the MCD and Tower A, the remainder was valued at ₹ 750.66 crores. 25.39% of this amount was attributable to BOM, which worked out to ₹ 190.59 crores. AHN offered an amount of ₹ 245 crores for OTS, to BOM.

5.6 The proposals for OTS, advanced by AHN, was accepted by BOM, whereas the response of PNB was awaited at the time of filing

the writ petition. 9 “Sahni” hereinafter 10 “Garg” hereinafter 11 “OTS” hereinafter 12 “MCD” hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06

5.7 The petitioner alleges that the hotel was undervalued, in the negotiations relating to the OTS between AHN and BOM on the one hand and PNB on the other, resulting in loss to the public exchequer. The allegation of undervaluation is predicated on the following facts, as pleaded in the writ petition: (i) For paying PNB, AHN availed a loan from Evaan Holdings Pvt Ltd13. EHPL had taken money from Panipat Projects Pvt Ltd14. PPPL was promoted by Mr. Naveen Jindal, who is a Member of Parliament. This shows that the hotel was not a bad asset, which could be said to have reduced in value. (ii) The uppermost four floors of the hotel were sold by AHN to IndusInd Bank for ₹ 350 crores in 2020, which worked out to ₹ 72917 per sq ft. (iii) In or around 2021, AHN received an offer through JLL India, a global real estate firm, for the shopping arcade in the hotel, for ₹ 400 crores. The shopping arcade spanned 58000 sq ft. The offer, therefore, was @ ₹ 69000 per sq foot. However, the offer did not materialise. (iv) NBCC (India) Ltd sold offices at Nauroji Nagar, adjoining the Hotel, @ ₹ 62261 per sq foot, as per a press release issued by NBCC on 16 August 2024. 13 “EHPL” hereinafter 14 “PPPL” hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06

5.8 These are the sole allegations in the writ petition.

5.9 The petition alleges that complaints made by the petitioner on 13 March 2025 and 14 March 2025 to the CVC and on 14 March 2025 to the Minister of Finance, BOM, Central Board of Direct Taxes, CBI, Securities & Exchange Board of India, and the Enforcement Directorate, met with no response.

5.10 The petitioner has, therefore, instituted the present writ petition as a public interest litigation, praying that (i) the OTS dated 24 January 2025 between AHN and BOM be quashed, and (ii) the MOF, CBI and CVC be directed to investigate into the OTS deals entered into by AHN with PNB and BOM.

6. Additional Affidavit and Supplementary Affidavit

6.1 The petitioner followed up the writ petition with an additional affidavit and a supplementary affidavit, incorporating further allegations and assertions against the respondents.

6.2 In its additional affidavit, the petitioner referred to a proposal extended by AHN, in early 2021, for a One Time Resolution15 of its loans. In the said proposal, AHN indicated the market value of the hotel to be ₹ 2600 crores. Additionally, it was submitted that the hotel 15 "OTR" hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06 had been allowed additional FAR16 valued at ₹ 1000 crore, for which it was required to pay only ₹ 150 crores. It was further stated, by AHN, in the proposal, that AHN was promoted by Shiv Kumar Jatia and his son Amritesh Jatia17, through their overseas holdings.

6.3 The additional affidavit further averred that the credit facilities extended to AHN were secured by the personal guarantees of the Jatias, but they were permitted to sell their shares to the Agrawal group and one N.R. Raval, thereby reducing their shareholding in AHN from 50.69% to 0.16%.

6.4 It was further reiterated, in the additional affidavit, that, in violation of the instructions dated 8 June 2023 of the Reserve Bank of India18, requiring maximisation of recovery in the case of OTSs, recovery in the present case had been minimised by undervaluation of the assets of AHN and permitting the Jatias to sell their stake in the hotel, despite having provided Personal Guarantees.

6.5 Para 9 of the Additional Affidavit purports to disclose the sources of the information on the basis of which the writ petition had been filed, as required by the rules applicable for filing of Public Interest Litigations19 before this Court. Suffice it to state that, of the various annexures to the writ petition which are not public documents or to which the petitioner was not a party, it is averred that letters dated 3 June 2021 and 24 January 2025 from BOM to AHN, letter 16 Floor Area Ratio 17 “the Jatias” hereinafter 18 RBI 19 “PILs” hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06 dated 30 September 2024 from AHN to BOM, filed as Annexures P-1, P-4 and P-3 to the writ petition were “received from a reliable whistleblower”. The identity of the “reliable whistleblower” is not disclosed.

6.6 Via the Supplementary Affidavit, the petitioner has further alleged that, prior to execution of the OTS Agreement with AHN on 24 January 2025, BOM had invited bids for sale of non-performing accounts on 5 September 2023 and 29 November 2023. However, owing to fixation of high Reserve Prices and limited time provided for making payment by any proposed bidder, no bidder came forward. BOM, however, later entered into the OTS Agreement dated 24 January 2025 with AHN for a much lower amount of ₹ 263.45 crores.

6.7 The Supplementary Affidavit also raised allegations with respect to diversion of investments made by AHN in Fineline Hospitality and Consultancy Pte Ltd, Mauritius and Newtown Hospitality Pvt Ltd in 2011 and 2014. We are not inclined to enter into these aspects in the present petition, for various reasons. Firstly, they travel widely beyond the prayers in the writ petition. Secondly, they are being raised before this Court without the petitioner having chosen to address any representation to any authority, or even include these allegations in the complaints to the MOF, the CVC and the CBI, to which the petition alludes. This Court cannot be converted into an inquiry authority, to inquire into such issues without the competent statutory authorities having first been approached in that regard. Thirdly, these pertain to transactions much prior to the advancing of Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06 loans by the Banks to AHN, which is the basis of the grievance in the writ petition.

7. Stand of the BOM in its written submissions

7.1 The BOM, in its written submissions, pointed out that, as a consequence of the OTS executed between BOM and AHN, BOM had managed to recover 116% of the ledger balance. It is further pointed out that BOM has a two-tier system of consideration of OTS proposals by any distressed buyer. The proposal is first considered by a Settlement Advisory Committee20 comprising a retired Judge of a High Court and a retired General Manager of another PSU bank. Any proposal which is approved by the SAC is further considered and approved by the Special Committee of the Board for Compromise21, which comprises independent directors nominated by the RBI, the Government and the shareholders, apart from the managing director of the bank and both its executive directors. It is after such an intensive degree of scrutiny that an OTS is approved. The OTS of AHN was also approved after scrutiny by the said committees. The sanction and approval of the OTS was, therefore, in accordance with the directives of RBI and the policy of BOM.

7.2 It is contended that the writ petition essentially seeks to use this Court to initiate a roving inquiry into contractual financial matters without any substantial basis for suspecting any wrongdoing therein. It is reiterated that 116% of the ledger balance, to the extent of ₹ 20 “SAC” hereinafter 21 “Special Committee” hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06

263.45 crores, was recovered by BOM which cannot, by any measurable standards, be regarded as suspect. As such, it is contended that the present case is one of recovery beyond expectations, and not one of a haircut, as the petitioner would allege.

7.3 The written submissions further point out that approval of an OTS is an involved exercise, which requires consideration of several factors including enforceability, the time that would be taken to recover the dues by any other mode of recovery, the net present value of the property put up as security and the net present value of the OTS proposal. There is no basis, whatsoever, to even suspect, much less hold, that BOM exercised its commercial wisdom irregularly, as to justify grant of the prayers in the writ petition. The writ petition essentially seeks institution of an inquiry into a commercial contract between independent private parties, without any justification whatsoever. Such an attempt has specifically been frowned upon, by a coordinate Bench of this Court, in its judgment in Dr. Subramanian Swamy v Union of India22.

7.4 A formal objection has also been raised by BOM to the effect that the writ petition does not disclose the sources of the information on which it has been based, as required by Rule 9(i)(c) of the Delhi High Court (Public Interest Litigation) Rules 201023. Merely stating that the information was provided by a “reliable whistleblower” does not satisfy the mandate of the said provision. 22 2024 SCC OnLine Del 5706 23 “the PIL Rules” hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06

7.5 It is further pointed out that the prayers in the writ petition have been rendered infructuous, as the OTS stands implemented, no dues certificate has been issued by BOM and the charge of BOM over the assets of AHN has been released in terms of the directions issued by this Court in its order dated 5 May 2025 in WP (C) 5887/2025.

7.6 Apropos the allegation of discrepancy between various valuation reports issued in respect of the hotel, BOM submits that the JLM, consisting of six lenders, had obtained valuation of the hotel from two different valuers, M/s R.K Associates24 and M/s Kanti Karamsey and Co25. These valuations were the basis of the decision to approve the OTS suggested by AHN. RKA and KKC had also examined the earlier valuation reports of Garg and Sahni. Various errors in the said reports were found to exist. Inter alia, it was noticed that the valuation reports prepared by Garg and Sahni treated the hotel property as commercial property with no user restrictions, whereas there was a restriction of use as a hotel, and also failed to notice that Tower A of the property had not been mortgaged to the banks, and included the said Tower in their valuation. These considerations substantially altered the valuation of the property.

7.7 As per the policy of the BOM, the two latest valuation reports, obtained from two different panel valuers, were consideration after excluding Tower A. Once these factors were taken into account, no substantial reduction in the valuation of the hotel was found to exist. 24 “RKA” hereinafter 25 “KKC” hereinafter Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06

7.8 It is, therefore, submitted by BOM that the entire case of considerable reduction in the value of the hotel and of a large haircut having been suffered by the banks is, therefore, imaginary.

7.9 It is also pointed out that, in its order dated 6 February 2024 in CS (Comm) 128/2022, this Court had appointed M/s Jain Jagawat Kamdar and Co. as the forensic auditor of AHN and that the reports submitted by the said forensic auditor clearly concluded that there were no siphoning or diversion of funds or fraudulent transactions involved.

7.10 In these circumstances, BOM submits that the writ petition, which is merely an exercise in adventurism, based on wholly imaginary and speculative assertions and allegations, ought to be dismissed with costs, so as to maintain the sanctity of the banking system and ensure protection of the morale and confidence of banks in taking bona fide commercial decisions.

8. Stand of PNB in its written submissions

8.1 PNB, in its written submissions, echoes BOM’s stand that the writ petition is a frivolous exercise of speculative adventurism, which deserves to be thrown out at the outset. It is pointed out, at the very commencement of the submissions, that the OTS offer of AHN was approved by PNB vide its letter dated 15 October 2024, whereafter AHN paid the entire OTS amount and a no dues certificate was issued by PNB to AHN. Signature Not Verified W.P.(C) 4123/2025 Digitally Signed By:AJIT KUMAR Signing Date:03.11.2025 15:32:06

8.2 It is further pointed out that PNB had engaged three independent valuers, namely Garg, M/s Sapient Services Pvt Ltd and M/s Universal Consultants and Valuers LLP to provide a fresh valuation of the hotels for consideration of the OTS proposal extended by AHN. The realisable value of the property was worked out at ₹ 876 crores. The reasons for change in valuation were highlighted by the various valuers and included (i) exclusion of FAR of 3.75 in 2024 as the Airport Authority of India had rejected additional height clearance, (ii) levy of a charge of approximately ₹ 232 crores on the hotel by MCD, (iii) overdue property tax claim of ₹ 104.34 crores demanded by MCD, (iv) valuation of the property as hotel property instead of commercial property, (v) over ₹ 300 crores necessary refurbishments required to maintain sustainable and steady business levels and (vi) outstanding litigations.

8.3 Relying on the judgments of the Supreme Court in Balco Employees Union v Union of India26 and Vivek Narayan Sharma v Union of India27, PNB contends that courts do not possess the requisite wherewithal to examine intricate decisions of economic policy or considerations which are relevant while entering into commercial contracts in such cases. Merely on imaginary allegations, it is submitted that the Court process cannot be vitalized to conduct a