Hillcrest Realty, a Malaysia-based company invested Rs 28.29 crore as 97% preference shares in Hotel Queen Road Pvt Ltd, the special purpose vehicle floated by Moral Trading. However, later Hillcrest filed a case in the Delhi High Court accusing Moral Trading of not paying any dividend to it. According to Mohit Chaudhary, lawyer for Hillcrest, "According to section 87 2B of the Company Law, if a firm fails to play dividend for two years, the preference shares get converted into voting rights."
Having not started operations since 2002, Moral Trading did not pay any dividend to Hillcrest. "The time when we bought the property, the real estate scenario in the country was not good and tourism was also not very booming, because of these challenges, we could not start the hotel," said RP Mittal. On being asked whether Hillcrest should get any voting rights Mittal said, "Section 87 2B of the Company Law, is only applicable in case of public-listed companies and not on private companies like ours."
It may be interesting to note that Ashok Yatri Niwas, which was later called Indraprastha Hotel was the site of the sensational Naina Sahani 'tandoor' murder case in 1995. It was in Ashok Yatri Niwas's restaurant Bagia, that politician Sushil Sharma took the body of his 26-year-old wife Naina Sahani (after shooting her dead at their home) and had asked the manager Keshav Kumar to destroy it in the tandoor. The hotel was being run by Sharma then on contract with ITDC.
In 2005, Moral Trading filed a case against Hillcrest in the Delhi High Court and then another case was filed by Hillcrest and RP Mittal's younger brother Ashok Mittal in the Company Law Board. Ashok accused him of illegally increasing his shareholding in the company. A case is right now going on in the division bench of the Delhi High Court. The latest hearing on the case was on Tuesday and the next is scheduled on September, 3.
For the hotel - Ramada Plaza, RP Mittal inked a franchise agreement with US-based Wyndham Hotels and Resorts (Ramada is a trademark of Wyndham) and has invested around Rs 135 crore in the project so far. "We have received the completion certificate from NDMC (New Delhi Municipal Council) and are just waiting for a licence from the Delhi Police," said Mittal.