Petitioner Loses Co-developer Status Due to Loan Default

The court held that the petitioner lost their co-developer status after defaulting on loan repayment, allowing the approval of co-developer status to Respondent No. 4, who acquired the property through a legitimate auction process. The court rejected the petitioner's arguments regarding SEZ Act violations, stating the petitioner was no longer a co-developer post-auction. Actions by SIDBI under the Securitisation Act were deemed final and binding, with the petitioner lacking grounds to challenge the Board of Approval's decision. The petition was dismissed without costs.

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Issues Involved:
1. Validity of the decision to approve co-developer status to Respondent No. 4.
2. Compliance with procedural requirements under SEZ Act and Securitisation Act.
3. Petitioner's locus standi and right to challenge the decision.

Issue-wise Detailed Analysis:

1. Validity of the decision to approve co-developer status to Respondent No. 4:
The petitioner challenged the decision taken on Proposal No. II under Item No. 82.9 by Respondent No. 1 in the 82nd Meeting held on 04.04.2018, arguing that it was not a speaking decision/order and was made without giving the petitioner an opportunity of hearing. The petitioner contended that the decision violated Section 10 of the SEZ Act, which provides for the suspension of the co-developer agreement only under specific conditions, none of which were met. The petitioner also argued that the approval process did not consider Sections 10(1) and 10(9) of the SEZ Act, which require a show cause notice and an opportunity of hearing before suspending or transferring the letter of approval.

2. Compliance with procedural requirements under SEZ Act and Securitisation Act:
The petitioner argued that the co-developer agreement could not be canceled without following the procedures outlined in Section 10 of the SEZ Act. The petitioner also contended that the sale certificate issued by SIDBI and the subsequent actions were sub judice before the Debt Recovery Tribunal, making the approval of co-developer status to Respondent No. 4 premature and illegal. The petitioner further argued that the provisions of the Securitisation Act cannot override the SEZ Act, citing Section 51 of the SEZ Act, which has an overriding effect over other laws.

3. Petitioner's locus standi and right to challenge the decision:
The respondent No. 4 argued that the petitioner had no locus standi to challenge the decision as the possession of the plot was already taken by SIDBI and sold in auction. The respondent No. 4 contended that the decision of the Board of Approval was merely a ratification of the co-developer agreement executed by Respondent No. 3 in favor of Respondent No. 4, making the original co-developer agreement with the petitioner redundant. The respondent No. 4 also argued that the actions taken by SIDBI under the Securitisation Act were final and binding, and the petitioner had no grounds to challenge the decision of the Board of Approval.

Judgment:
The court held that the petitioner, after defaulting on the loan repayment, lost the status of co-developer pursuant to the auction conducted by SIDBI under the Securitisation Act. The court found that the Board of Approval was justified in approving the co-developer status to Respondent No. 4, who had acquired the property through a legitimate auction process. The court rejected the petitioner's contentions regarding the applicability of Section 10 of the SEZ Act, stating that the petitioner was no longer a co-developer after the auction sale. The court also noted that the actions taken by SIDBI under the Securitisation Act were final and binding, and the petitioner had no grounds to challenge the decision of the Board of Approval.

The court dismissed the petition, stating that the contentions raised by the petitioner were without basis and that no action was required under the SEZ Act for the suspension or transfer of the letter of approval, which had become redundant due to the auction sale by SIDBI. The petition was dismissed with no order as to costs.

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