A Letter of Intent that contains essential terms constitutes a binding contract; unilateral amendments by IL&FS are permissible and enforceable under its terms.

ORDER

CA 262/2024 in CP No. 3638/(MB)/2018

1) A Company Application 262 of 2024, is filed on 06.08.2024, by the Chronos Properties Private Limited (‘Chronos’), who is Successful Bidder for IL&FS Financial Centre at Bandra Kurla Complex, Mumbai and holding a Letter of Intent dt. 21.03.2022 (‘LoI’) issued by IL&FS in this relation. Chronos is seeking certain directions to IL&FS for execution of a Definitive Agreement and consummation of the Transaction pursuant to said LoI.

2) Chronos has sought directions to the Respondents, viz. IL&FS and another to take all the steps necessary to execute, sign and register the Definitive Agreement before the relevant Authorities and take steps necessary to ensure the consummation of the Proposed Transaction as contemplated in the LoI and for quashing and setting aside the letter dt. 16.08.2024, by which the unilateral amendment to the LoI, enhancing the consideration of the proposed Transaction of sale of the property was made by IL&FS.

3) The brief facts leading to the filing of this Company Application are as under:

a. Pursuant to the Resolution Framework of the Respondent No. 1, viz. IL&FS as approved by the Hon’ble National Company Law Appellate Tribunal vide its Order dt. 12.03.2020, IL&FS sought proposal for acquisition of its rights in the IL&FS Financial Centre and underlying Land located at Bandra Kurla Complex (hereinafter referred to as the Property).

b. Chronos affiliate emerged as the Successful Bidder. After negotiations, the Bid was finalised for INR 1080 Crores. As per the mechanism provided in the Framework, the approval was required from various Authorities. The IL&FS Committee of Creditors (i.e. CoC), approved the said Bid on 17.12.2021. The New Board of IL&FS approved on 27.01.2022. The approval was also granted by the Hon’ble (Retired) Justice Shri. D.K. Jain (‘Justice Jain’) on 08.03.2022. After the approval from Justice Jain, the LoI was executed between the Parties on 21.03.2022, and as per the said LoI, Chronos was required to furnish Performance Guarantee of INR 1080 Crores i.e. 10% of the consideration, which was executed. This Tribunal, vide its Order dt. 23.09.2022, also granted its approval to the proposed Transaction. Thereafter, MMRDA also accorded sanction vide its Letter dt. 16.04.2024 to the proposed Transaction for its consummation within 90 days viz. 15.07.2024. The said consent was further extended vide Letter dt. 06.06.2024, with validity till 04.09.2024. MMRDA approval was obtained on 18.07.2024.

c. Chronos obtained stamped adjudication of the Deed of Assignment and also took inspection of Original Documents available with IL&FS on 26.06.2024, and thereafter, requested the IL&FS to execute the Definitive Agreement, however, IL&FS did not respond. Therefore, the Applicant was constrained to file main Application inter alia seeking directions against IL&FS to consummate the proposed Transaction on 16.08.2024.

d. The IL&FS issued unilateral amendment purporting to enhance the compensation to INR 1481 Crores and therefore, the present Application, contending that the IL&FS cannot unilaterally amend the consideration on the ground that there is enhancement of prices of the property and the object of the Framework being the value maximization.

e. It is contended that the LoI is a concluded contract between the Parties and is not a contingent one, therefore, it is enforceable contract. It is a binding contract, as all the essential terms of the binding contract are contained in the said LoI.

f. The ld. Counsel for the respondent appeared and filed Reply on behalf of th