MS Shoes case finally comes for hearing

NEW DELHI, July 13: After passing through six judges, the controversial M S Shoes East case has finally come before a single bench of the Delhi High Court. A single judge bench comprising Justice N G Nandi posted the matter for further hearing on August 5. M S Shoes had filed a case against the Housing & Urban Development Corporation (HUDCO) for cancelling its projects for a five star hotel and shopping complex at Andrews Ganj in south Delhi and awarding these to M/s Leela Hotels & Convention Limited (LHCL).

The genesis of the case goes back July 1994, when after a bid, HUDCO awarded MS Shoes land for a 5-star hotel complex at a cost of Rs 64.1 crore and parking space at a cost of Rs 14 crore. HUDCO also allotted MS Shoes 25 shops and a guest house block (which would also have a restaurant and kitchen) for Rs 99 crore. The amounts were to be paid in a series of instalments beginning November 28, 1994.

The additional solicitor general Dr A M Singhvi, who argued at length contended that in both the cases, M S Shoes had paid first installment but had failed to pay the second one. M S Shoes paid Rs 25.6 crore for the hotel project and Rs 39.6 crore for the shopping/guest house complex. This lead to the cancellation of the project, Singhvi argued. Later, M S Shoes moved to High Court seeking injunction restraining HUDCO from cancelling the projects. It won a reprieve when the court, on December 15, 1994, ruled that time was not essence of the contract and asked MS Shoes to pay instalment with interest.

HUDCO challenged this order and went in appeal before the division bench. MS Shoes also filed its own appeal against the rate of interest which it said was too high.