Maha Hotel Projects Pvt. Ltd v. 1. State of Telangana

SE:NIOR COUNSEL APPEARING ON BEHALF OF SRI RA"TESH MADDY Counsel for the Respondents NO 5 & 6: --- Counsel for the Respondents No 7: SRI N B,IIUJANGA RAO, DEPUW SOLICITOR GENERAL OF INDIA The Court made the folloWing: ORDER HON'BLE SRI JUSTICE NAGESH BHEEMAPAXA 1 ORDER: This writ Petition is frled to declare the decision taken by Empowered Committee (Tourism) of the State of Telangana in its meeting dated 22.09-2025 as arbitrary and unconstitutional; and to further declare that the accrued right of Petitioner cannot be taken by Respondents 1,2 and 3 without following procedure establ.ished by law and without compensating for the same and to further declare that such consent will be in violation of the Consolidated FDI Policy of India and also to direct Respondents 6 and 7 not to allow FDI in Golden Jubilee Hotels Private Limited by Respondent No.4 in violation of the Consolidated FDI Policy of India'

2. The facts of the case are : Petitioner is the lead developer of consortium to which State of Andhra Pradesh (now Telaggana) awarded project for construction, development and operation of a S-Star Hotel at Hyderabad. Respondent No.1 is the State of Telangana through the Youth Advancement, Tourism. & Culture Department that owns the project and floated tl.e tender for the execution. Respondent No.2 is 2 Telangana State Tourism Development.Corporation which is a State tiovernment undertaking and has been nominated by the State Government to represent Respondent No.l for legal purposes. Respondent No;3 is the Empowered Comrnittee (Tourism) of the State of Telangana comprising of the Deputy Chief Minister & Minister of Finance, Minister for Tourism & Culture and Minister for IT, Industries & Commerce, which was taske,l with taking the decision on the representation of Respondent No.4 for taking over the project. Respondent No.4 is to w.eom the project has now been awarded by the State Gove::nment and it was the successful resolution applicant in the Corporate Insolvency Resolution Process (CIRP) of the Petitioner's project company. Respondent No.5 is a registered Socir:ty under the State of Telangana which granted additional land for construction and development of the project. Resp,sndsnt No.6 is Reserve Bank of Ind.ia. Respondent No.7 is the Department for Promotion of Industry and lnternal Trade, Ministry of Commerce and Industry, Governrnent of India.

2.1. It is further stated that Respondent No.l floated a tencter for 'Five Star Hotel Project', whereby the successful bidcler was to develop, finance, build, operate and transfer a 3 Five Star Hotel on land leased by Respondents 1 and 5 against payment of a monthly lease and development premium. Further clarifications on the terrns of the RFP were provided in pre-bid meetings. It was clari$ed in the pre-bid meetings that a separate Special Purpose Vehicle (sPV) company was needed for maintenance of separate books of account to arrive at gross turnover for calculating additional development premium. Thus, SPV i.e. M/s. Golden Jubilee Hotels Rrt. Ltd. executed [,ease Deed and Development & Management Agreement, both dated O9.O5;2OO7, with Respondent No.l for construction and development of the Hotel Project. Petitioner further states that leader of consortium

2.2. and financially signifrcant member transferred their shareholding i.e. 84% shareholding to their company, which was recognized as the Lead Developer of the Project by Respondent No.l. Remaining 167o shareholding was hetd by M/s EIH Ltd., the technical member of the consortium. That part of the project land belongs to Respondent No-5 with which a separate lease agreement was entered for the purpose of the project. It is further stated, on 08. I2.2OO8, Respondent No.1 approved the revised DPR for the project in which it was 4 menti()ned that Petitioner company is tJ:e venture company of My Home Group for this project and that they had mobilized the required 2L resources for the project. Respondent No.1 Department had also given Trio Objection Certificate' dated

01.1O.2OO9 for creating mortgage on the leasehold right for availing finance for the project. M/s Golden Jubilee Hotels Pvt. Ltd thereby availed financial assistance .from a consortium of publir: sector banks with Bank of Baroda as the leader of the lending consortium. The project was conceived with two towers, out c,f which one was completed in 2013, and a S-star hotel under the name Trident, Hyderabad' started. commercial operzttions in September, 2OL3. The second tower was also almost cornplete with only interior work left to be done. Vide letter dated L7.O9.2O13, the State Government sought to unilerterarlly increase the lease rate from Rs. 4OOO / - to Rs. .-... 75OO/- per square yard, however this Court under order dated

26.09.2013 in Writ Petition No. 27922 of 2O13 granted interim susprcnsion of the letter dated. 77.Og.2013 of the State

2.3. It is also stated, as "g;AT;t*;en the consortium menrbers, technical member i.e. M/s. EIH Ltd. was appointed as 5 the operator of the hotel. However, M/s. EIH Ltd. connived with Bank of Baroda, which provided EIH with ?.[o objection Certificate' to open and operate a separate bank account for GJHPL i:e. other tl.al the one agreed upon in agreements between GJHPL and lenders. M/s EIH opened this separate bank account in union Bank of India by providing KYC documents of its own employees and started diverting revenues from hotel operations into this account. Between October 2015 and July 2016, EIH Ltd. diverted around Rs. 88 Crores which financially crippled GJHPL. Resultantty, GJHPL was unable to service its dues to lenders and its account was declared as 'non- performing asset'bY the banks.' The contention of Petitioners is that Bank of Baroda 2.+. filed a Petition under section 7 of the Insolvency and Bankruptcy code, 2ot6 (IBC) before the National company Law Tribunal, Hrde;da d;ncti wt ich was ad.mitted on 27.O2-2O18- In the corporate Insolvency Resolution Process [clRPl, a resolution plan by Respondent No'4 was approved on 07.o2.2O2O, wherein Respondent No.4 offered Rs.342 Crores to the lender banks. since GJHPL was an sPV company established solely for orecuting Five Star Hotel Project of the 6 State Government, the approved resolution plan contained a conditlon that it shall be implemented only if the State Government's consent is obtained by Respondent No.4 for the change in shareholding of GJHPL within one:ye€rr from plan appro'.ral by NCLT.

2.5. Petitioner further contended that Respondent No.4 could not obtain the consent of the State Government within one year and terminated its resolution plan vide letter dated

21.06.2021. Consequently, it frl.ed 1.A.No.293 of 2O21 before the NCLT for affirmation of termination plan and withdrawal from proceedings and seeking stay on invocation of bid bonds. An interim order staying the invocation of bid bonds was granted by NCLI' on 25.06.2021 on the ground that the resoltrtion plan was term:.nated by Respondent No.4 due to non-fulfilment of condition precedent. One of the lend.er banks i.e. Bank of Baroda opposingly filed I.A. No. 509 of 2O2l praying for specific perfc,rmance of the obligations by Respondent No.4 contained in the Resolution Plan. The Application of Respondent No.4 numbered I.A.No.293 of 2021 was pending consideration and the 26-Application Iiled by CommitteC of Creditors -'=_t -=--.l+'+'" - -t' (CoC)/lendcrs numbered 1.A.No.5O9 of 2O2L was pending ,,j, ,,',, 7 adjudication. In December 2022, Respondent No.4 and Banks started reporting that they are trying to reach a settlement among themselves. In Febnrary 2023, Respondent No.l was replaced by Respondent No.2 on account pf State Government's decision that the dispute on its behatf will be dealt by Respondent No.2 in place of Respondent No. 1. In October 2023, the State Government through Respondent No.2 started reporting that it is also a part of the settlement talks and is considering whether or not to give consent on the proposal of Respondent No.4. It is further contended tl.at on ol .o7.2025, an order

2.6. was passed where NCLT directed t]1e State Government to report on the status of the approvals being considered by it. on o4.o7.2}25, this original order dated oL.o7.2o25 was deleted from the website of NCLT and a new order dated ol.o7.2025 was uploaded whereby it is written that Respondent No-2 requested for six weeks-time for obtaining approvals from the State Government and the time for the same has been granted and Respondent No.2 was directed to file detailed status report' Petitioner stated that on 25.09.2025, Respondent

2.7. No.2 filed a memo before the NCLT along with the impugned 8 minutr:s of meeting of the Empowered Committee where the following decision has been taken: '' Empowered committee has decided to issue a No Objection Certit-rcate in favour of successful Resolution Applicant i.e., M/s. BREP Asia II Indian Hotding Ao. (NQ) Pte., Lid., (M/s. Blackstone) with the folloriring terms and conditions: 1) Lease with the M/s. BREP Asia II Indian Holding Co. (NQ) Pte., Ltd., (M/s Blackstone) will be valid till the balance period of the earli:r lease agreement upto the year 2041 only, without any extension. 2l The company will make upfront payment of Rs. 88.23 crores within 15 days from the date of agreement, which is principal amount due from the previous agency i.e-, M/s. Golden Jubilee Hotels (P) Ltd., The Lease Rental to the TGTDC will be calculated at the rate (GJIIPL) to TGTDC, 3) On 07-04-2019, sole arbitrator has pronounced award in favour of developer M/s. Golden Jubilee Hotels (P) Ltd., (GJHPL) against whi<:h COP 39l2O2O is filed by YAT&C Department. The M/s. Golden Jubilee Hotels (P) Ltd.. (GJHPL) has claimed an amount of Rs. 42.5iA crores including interest in this case. M/s. BREP Asia II Indian Holding Co. (NQ) Pte., Ltd., (M/s Blackstone) shall agree to forego ,this claim agamst Government of Telangana and TGTDC. 4l of Fls. 7,5OO I - per sq. yards from the date of agreement i.e., May 2OO,7. 5) M/s. BREP Asia II Indian Holding Co. (NQ) fte., Ltd,, (M/5 Blackstone) will take steps to complete tower 2 and make it operational in 114 months from date <lf the agreement. 6) Tripartite agreement wilt be entered between TGTDC, M/s. BREP Asia II Indian Holdrng Co. (NQ) Pte., Ltd., (M/s Blackstone) and current operator i e., East Inclia Hotels (EIH) to continue to operate tovrer 1 and tower 2, till the end of lease period. Separate agreement can be worked out betrveen Ivl/s BREP Asia Iliiiiiian-Aa-iiain?6:"A$U-l*ftb- ' Ltct., (M/s Blackstonel and Fllt{ regarding the operations part. 7l M/s. BREP Asia II Indian Holding Co. (NQ) Pte., Ltd., (M/s Blackstone) has a claim against Government of All court cases in "vhich - - :*---*-*--i'i.ia-_+.a;*;+::.-_.- ._ . .- ..-.-' ...:.i,...' . ., . . . . , r,-,.*i;.r*;.fd.i!1. .: 9 Telangana and TGTDC, shall be withdrawh. Likewise, court cases pertaining to matters settled in this agreement will be withdrawn by the Government of Telangana. Post NCLT judgement, the escrow actount' where surplus 8) funds are deposited by the operator has accrrmulated Rs- 24O crores as on August 2025. TGTDC will {ile blaims before t}rc NCLT for its unsettled dues i.e., Rs. 69.83 crores which is the Interest on the Pending [ease Rental & Annual Development Premium (ADP)'" Being aggrieved by the said decisiod taken by 2.8. Empowered Committee (Tourism) in its meeting dated 22.Og.2O25, the present writ Petition is, filed contending that lOOo/o FDI in developed infrastructure is impermissible and is against the FDI Policy and fundamental public policy of India, Sri Suraj Prakash, learned cpunsel appearing on

3. behalf of Ms. Vanaparthi Vaishalit learned counsel for Petitioner vehemently contended that State Government acted arbitrarily and illegally by transferring the project'to Respondent No. 4 without issuing notice, hearing or compensation Petitioner, thereby violated Articles 14 and 30OA of the Constitution' He further contended that selection of Regpo-rrdent No.4 is made without public tender or proc-Y"te:f?--:t'Ure -'-.private Learned counsel negotiations, which is against public Policv: alleges discrimination and violation of Article L4, as the , *,:+irl:1:1, .,i+i'' a _ . . rnsq+++:i:dJg-r g.r,:1.. --. t+ .-. . , i :n::i'i: -ii:jr.:!:.. ;1. - . .., -... ?....-.r.Lii. +.i .;.,.:i.:;..i.' . ' ;.,,.c RliJ.iogr:a;.:Si.r1.i=','r.tj, -,1,r. ", . .. . .....-a,ri+r.+-.H*dir i. .,+;iir: 10 technical member (EIH Ltd.) was retained. in the project even as the rights of Petitioner being the Lead Member were extinguished, despite both being part of the successful conso.rtium. He also o[iects that lOO% FDI is impermissible for an already developed hotel project as per the Government's FDI Policy and NClT-approved resolution plan could not override valid contractual and statutory protections without explicit procedure and consent. Petitioner accrued proprietaqr rights as Lead Developer were extinguished without following the procedure established in the project agreements and that there was neither any breach committed by Petitioner nor any insol'rency of Petitioner company itself.

3.1. Learned counsel further submits that Appeal liled at NT3LAT was dismissed by order dated L1.12.2O24 and also the Appeal filed in Supreme Court against the NCLAT order was also dismissed by order dated O3.O2.2O25. The review petition befor:e the Supreme Court is pending. He relies on the judgment of 'fhe Hon'lcle Supreme Court in Elmbassy Propertg Deuelopments Priuate Limited v. Storte of Kolrnatakar, judg,ment of Division Bench of this Court in Anasuga o. V.M. t eozo) 13 scc 3os .,.;r. ,.. . -v._i -j: r,.:,Jirti.{ _!r:. l1 sateesh fwrit Appeal No. 57 of 20251 and the judgment of uttar pradesh High court in Bishal'rbhar Dagal chandto. Moholn a. State of llttar Pradesh-

4. On the other hand, the learned advocate General appearing for Respondent No.2 contended that earlier, when the State Government took a decision to replace Petitioner as Lead Developer in the M/s Golden Jubilee Hotels Private Limited by decision dated 3o.og.2o2o, Petitioner challenged the same by filing Writ Petition No. l7l2g of 2O2O and. the said Writ Petition was dismissed by order dated 28.04.2023 holding that when the proceedings initiated under the provisions of IgC *"" ceased by the Appellant Tribunal i.e. NCLAT, petiti,oner is not entitled' to invoke the jurisdiction of this Court und.er At1';icle 226 of Constitution of India. He also stated that tl.e Writ Appeal No. 1135 of 2023 preferred by Petitioner was also dismissed on 26.06.2024 by the Division Bench on the g.;d of unexplained inordinate delay. Special Leave Petition (c). No. 22186 of 2024 fi[ed before the Hon'ble Supreme Court of India was also dismissed on 2o.og.2o24. Learned Advocate Gerrei"r also contended that NCLT after following the provisions of Sections 29,30, and 3l of IBC, approved the Resolution Ptan and -; 1j::=$!= -::-:=-:=-'r'n=* .- *ttfttlila.ti.ri l-*'."' rtlii.l.a:{Ei i" t' """ t2 rejected the objections filed by petitioner in respect of Resohrtion Plan approval by giving cogent reasons.

4.1. Clause 6.4 of the Request proposal issued by the YAT &; C (PMU) D clearly envisages that in the event of default of palrrr3rlt, lender should have right to substitute the selected bidder, in consultation with YAT &C (PMU) D, contends learned Advocate General. The Bank had initiated proceeding before NCLT invoking the provisions of 'IBC' and NCLT approved the Resolution Plan and passed order on O7.O2.2O2O. The Appeal filed by Petitioner before the NCLAT against the approval of Resol.ution Plan was also dismissed on 11.12.2024. He also subnrits that Civil Appeal No.312 of 2025 filed against dismissal of Appeal was also dismissed by the Hon'ble Supreme Court on

03.a'2.2025.

5. : Learned Senior Counsel Sri Abhishek Manu Singhvi appe:aring on behalf of Sri Rajesh Maddy, learned counsel for Restrrondent No.4 submits that Petitioner has already sought the €XO.c:t relief before this Court in Writ Petition No. 17L29 of 2O2O; the appeals preferred thereagainst were also dismissed and now, the same relief is being sought in a circuitous manner. The single-largest shareholder, director and authorized signator5r of ." '.-:: ;r;+l+-'..: I E:!"1'+ .- ? -4 4i:ri!n\j.::\;r:,;r.i _i . . :.i'l,J' : ' ' r' i'i. ii";i'.--i i. ,-,'l : : - .,,;j,;ii;nd.r:.*i,+i, -;r.;.*d, +:.+.,i;;.-i+irr*:..-.r..-., l3 Petitioner who has liled the present Petition - La:sni Narayan Sharma, challenged Respondent No. 4's Resolution Plan, including clause 6.1 before the NCLT, NCLAT and the Honble Supreme Court and failed eveqnvhere' : It is further submitted that earlier Writ Petition No.

5.1. L7L2g of 2O2O was dismissed on the ground that after initiation of GIRP, only NCLT has jurisdiction. The Hon'ble supreme court has upheld the said order of this Court. The State of Telangana's approval/ consent, which is under challenge in t], e present writ Petition is result of approval of Respond.ent No. 4',s Resolution Plan which provides that entire shareholding of GJHPL shall stand transferred to Respondent No. 4 upon : achieving the approval/ consent of the State of Telangana. 'r . .. ,:. ::,-j.,....1. ":-",, l,earned Senior Counsel contends that as 'per

5.2. Section 31(1) of IBC, a Resolution Plan once approvga, has binding effect on all the parties, including shareholders of corporate debtors, i.e. Petitioner in this case (see Ghonashgam Mishra & Sons Pfi. Ltd. a. Ed.elweiss Asset Rec-offii'on compang Limited (2o21) 13 SCR 737). As per section 6o(5Xc) of IBC, the National ComPanY Law Tribunal shall have jurisdiction to entertain or dispose of any question of law or '.+ig#di:+'e+"aice 'r1-":':- , ,._l_.. '_-'--' --_ : .. _' " : :i:: -- --.-=:etr-1=f,'_::-:- . ..i-::..il: '. .'l .:- =.. .:l-:i;',;:;$i.r..i.:: .- .. :r-:.ii,:f,ii.f'J11:' . ": t4 facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor. As per Section 238 of IBC, provisions of IBC have overriding effect, notwil.hstanding anything inconsistent contained in an5r other law fc,r the time being in force or any instrument having effect by virtue of any such law. IBC is a complete Code. Adherence of protor:ols and procedures required for tega.l discipline. High Courl:'s power to interdict CIRP proceedings under the IBC demands rigorous scnrtiny and jud.icious application (see Mohummed, Dntetprises (Tantzania) Ltd. a. Farooq Ali Kholn C.A. No. 481 20251.

5.3. According to learned Senior Counsel, the present Writ Petition has been filed opportunistically, when the State of Telangana granted its consent for change in shareholding of GJHPL in order to create roadblocks in implementation of the Plan. NCLT, Hyderabad passed the order dated 25.09.2025 recording that the State of Telangana approved Respondent No. 4's lResolution Plan. It is to be noted that role of Petitioner was limit.ed till bidding for the Project. Upon being declared as the suc<:essful bidder, Petitioner is only a shareholder of the SPV/GJHPL which enjoys all rights. As such, there is no locus 15 for Petitioner. karned Senior Counsel also submits that it is well-setfled, a company is a juristic person and is distinct from its shareholders - it is the company which owns the property and not the shareholders - Bacha. F;. Guzdar u. Comrnissioner of Incom.e Tax, Bombag (1954) 2 SCC 563)' Having considered the rival submissions of the

6. learned counsel on either side, this Court is of the opinion that the project company, Golden Jubilee Hotels kt. Ltd. entered insolvency resolution under the IBC and the approved Resolution Plan expressly required State Government's consent, an exercise of contractual and statutory discretion. Petitioner's challenges to transfer and restructuring of project responsibilities have already failed before this Court in Writ Petition No. 17129 of 2O2O and Writ Appeal No.1135 of 2023 . and before the Hon'ble Apex Court in s.L.P.(c).No. 22L86 of 2024, conclusively holding that the provisions of the lnsolvency arrd Bankruptcy code, 2016 override the Telangana Infrastructtrre Development Enabling Act, 2OOl to the extent of . inconsistency. Further, once the NCLT-approved Plan is in -'. - _ : - -- - - :--- .effi;@--;:.s';;ffi E':ffi : operation, its terms, including permissible changes in .,. -"- .. *,.,-s. - -.-ia#tF!#&;i'"''ry;-'---Pl-':' ' ',,XgE,l$ffiffii::r,.* - ^1 r, -'r ,t!::.i-'rr{:,,,. !: *.i;,;n.,,iJ -,.,'1.,,. 16 shareholding, are binding unless set aside in accordance with the Code. The State's consent to Respondent No.4 is in line with the Pl.an and the rights of petitioner, if any, arise out of contract and ir.re subject to the terms, including consequences of insolvency and changes arising from judicial orders. The argunlent that no notice was given or compensation was paid ignorr:s the supervening effect of the IBC and the scheme apprc,ved thereunder. Proceedings regarding alleged contract breaches or compensation are pending before the NCLT and the petitioner's remedies lie therein.

8. The policy decision to negotiate with Respondent No.4 draws from the requirements of the insolvency resolution framework, not from a purely executive allocation of state generosity. The selection was pursuant to a statutory process i.e., CIRP under IBC, 2016 which is recognized by law, distinguished from discretionary grants by public tender. The alleg;ed preferential treatment to EIH Ltd. is rooted in the operational/commercial realities recognized in the Resolution Plar: and does not amount to hostile discrimination under Arti,:le 14 of the Constitution, as the technical member and the -- --.:i !:F:s! -r*-::.r--.:. -: - + - -* ---rd\fr{iftG!*r{ar.m!r*--- - . -.- - *-.-.-.--r..€*&_e,rr -nn.+:Fl+**.F'h:-.-${.,- .' .'+i; ."i. ".'-':.." .- .' . - .. r..,.i:- :- -:-.r .: t7 lead member's positions post-CIRP are not the same in law or fact. g. FDI approvals and compliance rvith national policy are the subject matter of competent central authorities and not this Court's writ jurisdiction, unless a clear and gross illegality is shown and none is established by petitioner. The opportunity to represent concerrls was part of the extensive proceedings before NCLT, High court and the Honble Supreme Court in related litigation. Re-litigation of settled issues is not permissible. F\rrther, petitioner has availed remedies before multiple forums, lost on the core issues and now sought to be reopened. The relief, if any, with respect to valuation, compensation or contract enforcement would lie before the specialized adjudicating authorities, but not in writ proceedings' For the above reasons, this court finds no merit in

10. the Writ Petition. The impugned decision of the Empowered Committee dated 22.09.2025 does not suffer from any constitrrtional or legal infirmity. Hence, the writ Petition is liable to be dismissed, however, to discourage this kind of frivolous titigation, with costs. ilFLxtr*c"liit*.ryrr$e"*'1. - ,..-**+J*a4q;4qq'+.tqtry!i.*.r*:*-r+!--. *"t'"""i- : ":.\- ,; - , ,.,1 . "i.,lj ' : . . ..,. :.,. dj!ai+i-r,-;,"f+! . :..-. ^ .,,..e+r+dt#+s+r+y3# . ._......-r _t;:r.r:jt "J .*:.*.,,t1;{Ag*i## .-"r'+r.*trffi4E$* : ;, ::+irt#lr.+iYir-(;t-: : , '._-,'- r1i.- i{1: .r {!j j .. j.. r, t' 18 The Writ Petition is accordingly dismissed with 11. costs ' of Rs.10 lacs to be payable to the prime Minister's National Relief Fund. L2. Consequently, miscellaneous Applications, if any shall sitand closed. , W.P.No.3O461 ot2O25 Rs. Ps. Cost Quantified by Hon'ble Court (That the that the petitioner herein in this Writ Petition is directed to pay Rs.10 lakhs to the Prime Minister's National Relief Fund). TOTAL //TRUE CO 10,00,000 - 00 10,00,000 - 00 Sd/.C.DEEPIKA ANT REGISTRAR SECTION OFFICER To

1. One CC to SRI VANAPARTHI VAISHALI, 2. Two CCs to GP for Tourism ,High Cour:t for Hyderabad.tOUTl IoPUCI State of Telangana at

3. one cc to sRl P VENKATESWARA RAo, sc for Telangana state Tourism Development Corporation [OFUCI

4. One CC to SRI RAJESH MADDY, Advocate IOPUC] 5. Ore CC to SRI N BHUJANGA RAQ DeputySollcitorGeneral of tndia, [OPUCI 6. Tra,o CD Copies D.N PMK dr- HIGH COURT DATED i2011112025 ORDER. WP.No.30461 of 2025 s C) C) 2 5 rPs ?tl?.$ * ., . .u.' DISMISSING THE WRIT WITH COSTS D e1r\*