Ekta World, Pashmina Realty Dispute over Rs 1,000-crore Mumbai Project
Ekta World has has moved the Metropolitan Magistrate Court with its complaint regarding the project spread over around 3.5-acre that was being jointly developed by the companies. In 2016, Ekta World was approached by Pashmina’s promoter Asit Koticha, director Rajendra Singh, other directors and key shareholders of the company to forge an alliance to jointly develop the plot. Pashmina had proposed to develop a mixed-use project on the plot, which was acquired by the latter in 2006, using Ekta’s expertise in the realty sector and brand name. According to Ekta, Pashmina representatives had initiated the project as Pashmina Lotus, but were unable to complete the project and therefore looking for a developer who can manage the entire project for them and undertake sales using their goodwill and expertise. As part of the alliance, Pashmina had assured to pay 7.25% of revenue to Ekta from the already sold area and 15% revenue from the balance sale area available in the project towards the Development Management fees. Following this, Ekta’s promoters Ashok Mohanani and Vivek Mohanani entered into a Development Management Agreement (DMA) with Pashmina Realty in July 2016 by paying Rs 30 crores. This money was to be utilised by Pashmina to buy the additional land parcels. In addition to the security deposit, Ekta also assisted Pashmina in obtaining third party finance worth Rs 200 crores with Mohanani’s personal guarantee to the extent of fees. As per the terms of the alliance, Pashmina and Ekta were to operate Master Escrow Account in respect of the said project along with other accounts to be operated either jointly or only by Ekta. However, Ekta has accused Pashmina of opening various accounts with their single control without their knowledge thereby defrauding Ekta and siphoning off the money and receivables of Master Escrow Account. According to Pashmina, Ekta has failed in discharging duties as a development manager. As per the pact, Ekta had to sell Rs 50 crore worth space in the first 6 months, but could only achieve Rs 20 crore in 2 years. “They could not get approvals in time and caused huge losses to Pashmina. They did some act that amounts to breach of trust and forgery. They transferred a few flats to his contractors in other projects. Because of his incompetent handling he has created liability of 53 crore of stamp duty on the project,” said Pashmina’s Director Rajendra Singh. After several failed reconciliation meetings for 8 months, Pashmina terminated the DM agreement in March 2020.
Tags : News/Views dispute Ashok Mohanani EKTA World Land Parcels Pashmina Realty Asit Koticha Development Management Agreement Metropolitan Magistrate Court Breach of Trust