Emerald Leisures reports criminal case and land disputes

Emerald Leisures Limited disclosed one criminal proceeding and two other pending matters in its Draft Letter of Offer, with amounts not ascertainable; the two Chembur land cases cover 4,045.5 square metres and 6,841.34 square metres. The filing says both land cases concern plots other than its club site.

What legal proceedings has Emerald Leisures disclosed?

Emerald Leisures disclosed three outstanding proceedings as of the Draft Letter of Offer: one involving criminal liability and two other matters that could materially and adversely affect operations or financial position if decided unfavourably. The filing lists the amount involved in both categories as not ascertainable, rather than attaching a rupee value to any of the three cases.

Emerald Leisures says the disclosure framework covers criminal proceedings, material statutory breaches, material civil or tax litigation, economic offences and matters considered material for stock-exchange reporting. Its board set the materiality threshold through a resolution dated May 18, 2024 at the lower of 2% of turnover, 2% of net worth, or 5% of average absolute profit or loss after tax for the preceding three audited years.

The filing also says Emerald Leisures, its promoters and directors were not categorised as wilful defaulters or fraudulent borrowers by a bank, financial institution or consortium under Reserve Bank of India guidelines. Separately, it says no Securities and Exchange Board of India penalty-related show-cause notice or prosecution proceeding had been issued to the company, promoters or directors, except matters mentioned under other regulatory and statutory approvals.

What is the criminal complaint against Emerald Leisures about?

The criminal complaint alleges that Emerald Leisures cheated shareholders and misappropriated company property by selling it at an undervalue to Metalores Private Limited. Nahalchand Laloochand Private Limited filed Case No. 38/SW/2016 before the Additional Chief Metropolitan Magistrate’s 11th Court at Kurla, Mumbai, and the disclosure says Accused Nos. 2 and 4, directors of Emerald Leisures, were also directors of Metalores.

According to the Draft Letter of Offer, the magistrate’s court issued process on September 13, 2017 for alleged offences under Sections 420 and 406 of the Indian Penal Code. The filing does not disclose a monetary claim, a provision made by Emerald Leisures, or an amount of potential liability arising from the complaint.

Emerald Leisures has challenged the September 2017 order through Criminal Revision Application No. 107 of 2018 before the Sessions Court at Mumbai. It is seeking recall, quashing and setting aside of the order on the grounds that there was insufficient evidence against the accused and that the dispute is civil in nature.

The allegations are those of the complainant rather than findings recorded in the Draft Letter of Offer. Emerald Leisures says legal proceedings pending before different courts and tribunals may result in litigation expenses, financial-statement provisions or further liabilities, and it cannot assure investors that the cases will be resolved in its favour.

Which Chembur plots are involved in the pending land proceedings?

One proceeding concerns a 4,045.5-square-metre plot at CTS No. 366/41 (part), Village Chembur, opposite Swastik Park, Mumbai 400 074. Emerald Leisures filed an Interim Application in 2023 in Writ Petition (L) No. 8386 of 2022, brought by Chembur Ekta CHS SRA (Proposed) against the State of Maharashtra and others in the Bombay High Court.

Emerald Leisures states in its application that it owns the 4,045.5-square-metre plot and alleges that the petitioner illegally executed a conveyance deed for it. The company further contends that the petitioner intends to implement an illegal Slum Rehabilitation Scheme on land that does not belong to the petitioner and has not been declared a slum under the relevant laws.

The company is seeking to be added as an applicant, place what it describes as the true facts before the court and obtain dismissal of the writ petition. The matter remained pending as of the Draft Letter of Offer, which gives neither a monetary claim nor a future hearing date for the CTS No. 366/41 proceeding.

The second proceeding is Writ Petition (L) No. 10183 of 2023, concerning 6,841.34 square metres at CTS No. 366/6 (part), Village Chembur, Swastik Park, Mumbai 400 071. Bhimnagar and Acharya Nagar SRA Co-Operative Housing Society filed the petition over approvals for rehabilitation of about 428 dwellers on the property.

The filing says the Slum Rehabilitation Authority declared the 6,841.34-square-metre property a Slum Rehabilitation Area on November 1, 2022. Emerald Leisures was made Respondent No. 6 because it owns the suit property and was appointed owner-cum-developer to implement the rehabilitation scheme for eligible occupants and slum dwellers.

Do the Chembur proceedings affect Emerald Leisures’ club or redevelopment plans?

Emerald Leisures says the two Chembur litigations concern plots other than the land where its club is located and do not affect club operations in any manner. Its Club Emerald premises at Swastik Park, Chembur span approximately 5,670 square metres, compared with 4,045.5 square metres in the first proceeding and 6,841.34 square metres in the second.

In the 6,841.34-square-metre case, Emerald Leisures says it is willing and ready to implement the rehabilitation scheme but that Respondent No. 4 has not issued the required certificate. The petition was at the pre-admission stage, had been listed for an urgent hearing on October 4, 2023, and remained pending as of the Draft Letter of Offer.

Emerald Leisures has separately said it plans to redevelop land it owns at Chembur into a residential tower with approximately 1.75 lakh square feet of saleable area. It also holds a 51% interest in a limited liability partnership with Gala Group that is exploring development of a cluster at Mahim, but the filing does not identify either writ-petition plot as the club site.

A separate risk disclosure says that inventories included work-in-progress of Rs 30.8604 crore for the real-estate project as of March 31, 2026, including land cost and development expenses. It also says a CTS No. 366/41 plot measuring 2,372 square metres was encroached by a garage, slum and unauthorised occupants, while identifying possible possession, approval and development risks without quantifying a litigation impact.

The document says delays, disputes, inability to secure vacant possession or development restrictions could affect completion or monetisation of real-estate projects. This is a risk disclosure rather than a statement that either pending Chembur case has delayed the planned 1.75-lakh-square-foot residential tower, and no completion date or revenue projection is provided.

Conclusion

Emerald Leisures has disclosed a 2016 criminal complaint, a 2018 revision application challenging the order to issue process, and two Chembur land proceedings pursued in 2023. The filing provides no ascertainable rupee amount for the three matters and distinguishes the 4,045.5-square-metre and 6,841.34-square-metre plots from its approximately 5,670-square-metre club premises.

The next disclosures to watch are progress in Criminal Revision Application No. 107 of 2018, the pre-admission rehabilitation petition concerning about 428 dwellers, and execution of the planned Chembur residential tower with approximately 1.75 lakh square feet of saleable area. Emerald Leisures says all three proceedings remained pending, while the filing provides no timetable for court outcomes or project completion.