Yogesh Kumar Sabharwal - Allegations of Real Estate Operations By His Sons

Allegations of Real Estate Operations By His Sons

During the 2006 Delhi sealing drive, the Supreme Court under Sabharwal demonstrated extraordinary zeal in demolishing a slarge number of commercial properties which were illegally running in residential areas. There were very extensive protests every day, and considerable political pressure, due to which demolitions would often be hindered. The court monitored events and regularly reprimanded the Municipal Corporation of Delhi for its tardy progress. As a consequence of the extensive bulldozing of buildings, legal commercial properties, as in the new shopping malls, rose dramatically in price. Particularly, luxury store owners and other upscale businesses were very keen to get into the limited mall floor space.

In May 2007, five months after Sabharwal retired from the bench, the afternoon newspaper Mid-Day brought out a series of articles that presented documents showing that YK Sabharwal's sons, Chetan and Nitin Sabharwal, owned at least four small ventures, most of them oriented towards garment exports, but one in the construction arena. During Sabharwal's tenure as Chief justice, two of these firms suddenly attracted the interest of the very largest players in the shopping mall industry.

The first firm, Pawan Impex, Pvt Ltd, was registered for some time at Justice Sabharwal's official bungalow in the heart of Delhi, and later at his private house. Having the firm registered at his government-furnished house may have been illegal. In a newspaper editorial on Sept 2, 2007, Justice Sabharwal has said that he asked his sons to shift the registered address as soon as he found out about it, but in an interview recorded by Mid-Day in April 2007, after the shift, he claims complete ignorance about the matter.

More damaging is the fact that Pawan Impex, which had remained with a capitalization of 0.1 million Rs. since its founding in 2002, suddenly attracted the interest of Kabul and Anjali Chawla, owners of the large and rapidly growing real estate firm Business Park Town Planners (BPTP) which had promoted large malls like Park Centra (Gurgaon), Next Door (Faridabad), and the Parklands Shop-In Park (North Delhi). In June 2006, at the peak of the Supreme Court interest in the 2006 Delhi sealing drive, the Chawla's invested in Park Impex, raising the Share Capital 300 fold to Rs. 30 million, with equal shares between the original promoters and the Chawlas. Two months later, in August, the company obtained a loan of Rs. 280 million by a bank which happens to be a tenant of a BPTP property. These allegations appear to be well documented in a set of papers released by the Campaign for Judicial Accountability and were not addressed in Justice Sabharwal's public response, though he did mention that his sons were creating an IT Mall. After the partnership with BPTP in June 2007 Pawan Impex purchased 4 acres (16,000 m2) of land in NOIDA on which this IT Mall is being constructed; Mid-Day reports it to be a Rs. 560 million project with 300,000 sq ft (28,000 m2). saleable floor area.

A second firm, Harpawan Constructors, equally unknown, had also been promoted by the brothers. In October 2005, the promoters of Filatex India, a polyester yarn firm with a turnover of Rs. 3 billion in FY 2007, Purshottam and Madhu Sudan Bhageria, also the owners of real estate firm Fargo Estates, invested in Harpawan. Subsequently, the Bhagerias announced plans for developing the Square One, a mall devoted to luxury brands in Delhi. Justice Sabharwal has said that Purshottam Bhageria was his son's childhood friend, and that Harparwan Construction, despite its name, has not made any real estate or other investments.

The business of Chetan and Nitin expanded dramatically after 2005. Besides setting up several garment manufacturing factories, they have embarked on a massive real estate programme in NOIDA.

Possibly the largest project for Pawan Impex is the Rs. 560 million IT Mall being constructed in Noida. In the application to construct this mall, they had given the turnover and business of their company as "Nil". Their application for constructing this mall was approved rather mysteriously, given that in the application they had declared their company to be "Nil turnover" and "Nil business". An earlier applicant, Softedge Solutions, had been rejected on the ground that they could not satisfactorily answer questions about their previous experience in IT and their technical tie up. But Pawan Impex represented by Chetan Sabharwal with Nil business, no previous track record in IT and no technical tie up, managed to obtain permission.