INDIA BUSINESS WORLD - NOVEMBER 16^th - NOVEMBER 30^th - 2007

ANSALS GUILTY IN UPHAAR TRAGEDY: COURT

A city court has found real-estate tycoons Sushil and Gopal Ansal and 10 others guilty in the decade-old Uphaar case. Fifty-nine persons were choked to death inside Upahaar Cinema as the only exit from the balcony was locked from the outside.

Additional sessions judge Mamta Sehgal held the Ansal brothers guilty of causing death of cine-goers by their rash and negligent act under Sections 304 A of the IPC, endangering human lives, under Sections 337 and 338 of IPC, and Section 14 of the Cinematography Act. They can face a maximum punishment of two years imprisonment.

Ten others found guilty include 2 MCD officials, S S Sharma and N D Tiwari, and a Delhi Fire Service officer, H S Panwar.

The remaining accused - Radha Krishnan Sharma, Nirmal Singh Chopra, Ajit Chaudhary, Manmohan Unniyal, Brij Mohan, Anand Kumar Gera, Vir Singh and Har Swaroop Pawar - were convicted under Section 304 (culpable homicide not amounting to murder) read with Section 36.

The verdict in the case, in which the charge sheet was filed on November 15, 1997, was reserved August 21. Shortly after the announcement of the verdict, a lawyer for the Ansal brothers said they would appeal to a higher court.

The case pertains to the tragedy that occurred on June 13, 1997, when a fire broke out at the south Delhi cinema hall during a screening of the film, Border. A transformer installed in the basement of the theatre had caught fire.

Originally, 16 people were named as accused, but four of them died. The Ansal brothers delayed the hearing by moving the Delhi High Court and the Supreme Court on several legal counts, including the compensation to be given to the victims' families.

The trial was expedited after the high court directed that it should be concluded by August 2007.

The Central Bureau of Investigation (CBI) examined 115 witnesses, including eight relatives of the Ansals who later turned hostile.

When contacted, Ansal API spokesperson Kunal Banerji said, "We respect the verdict. We are waiting for the sentence to come. After that, we will decide on the future course of action. Meanwhile, our business will continue as usual. Ansal API is a separate entity and has nothing to do with Uphaar Cinema." Sources close to Mr Sushil Ansal said that an appeal in the High Court is being considered.

The market didn't take kindly to the judgement. The Ansal API stock went down 5.85% to Rs 252.50.

Market experts, however, say that in the long run, the judgement will not have any significant bearing on the performance of real estate stocks in general. "It is an old matter. Things have changed since then. I don't see any reason to panic," said Karvy Stock Broking vice-president Ambareesh Baliga.

But there are players in the industry who fear a negative impact. "Real estate is largely a game of perception and the credentials of a developer have an important role to play. The sector will have to really walk a tight rope to retain the faith of consumers," said a Delhi-based developer.

However, most other players are of the opinion that this should be treated as an one-off incident and should not be generalised. "There's a huge difference in the way real estate used to function compared to a decade ago. From being family run ventures, all major real estate firms are professionally managed companies now," said a senior executive in another Delhibased real estate firm.

Real estate experts see the Uphaar case as a turning point for the Ansal group. The family was one of the first Delhi-based real estate companies to get listed, and was one of the three leading developers in north India, along with DLF and Unitech. However, the company's fortunes have been mixed. As of now, late entrants to the sector, such as Parsvnath Developers and Omaxe, command a higher market capitalisation than Ansal API.

The Ansal group was split into three companies in 1998, and the flagship venture, Ansal Properties and Infrastructure was retained by the eldest brother Sushil Ansal, with Deepak Ansal taking over Ansal Housing and Ansal Buildwell going to Gopal Ansal.