ORDER :

1. This is an interlocutory application seeking injunction restraining the respondent and its men, agent and servants from giving any effect or further effect to the letters dated 23rd February, 2022, being Annexures “P” and “Q” of this petition. Both these notices are for the purpose of invoking the pledge and transferring the pledged shares in favour of the respondent.

2. It is to be noted that in an earlier suit being C. S. No. 138 of 2021 filed by the petitioners herein, an interim order was passed on 3rd August, 2021 restraining the respondents from proceeding with sale of the pledged shares. Subsequently, a vacating application was filed by the respondent which was taken as the affidavit in opposition to the main application and the matter was heard out. Upon hearing both the parties, this Court had passed an order on February 16, 2022 holding that the notices dated July 17, 2021 for immediately recalling of the term loan facility and working capital facility were in tune with the agreements entered into between the parties. However, the Court held that the notices were not in terms of Section 176 of the Indian Contract Act, 1872. After having examined the judgment cited by the parties, the Court had laid down the following principles to be kept in mind in cases of Section 176 notice. The same is delineated below:

“21. Upon careful perusal of the judgment cited by the parties the following principles emerge:

a) The provisions of Section 176 of the Act are mandatory. The applicability and sweep of Section 176 unlike several other provisions on the same subject is not eclipsed by the phrase “in the absence of a contract to the contrary.” The notice that is to be given to the pledgor of the intended sale by the pledgee is a special protection which statute has given to the pledgor and, parties cannot agree that in the case of any pledge, the pledge may sale the pledged articles without notice to that pledgor.

b) Right to redeem under Section 177 can be exercised right up to the time the actual sale of the goods pledged takes place. The actual sale referred to in Section 177 must be a sale in conformity with the provisions of Section 176 which gives the pledgee the right to sale; and if the sale is not in conformity with those provisions, then the equity of redemption in the pledgor is not extinguished.

c) A notice of the character contemplated by Sec. 176 cannot be implied. Such notice has to be clear and specific in language indicating the intention of the pawnee to dispose of the security.

d) What is contemplated by Sec. 176 is not merely a notice but a ‘reasonable’ notice, meaning thereby a notice of intended sale of the security by the creditor within a certain date so as to afford an opportunity to the debtor to pay up the amount within the time mentioned in the notice.

e) Section 175 only requires an intimation of the intention to sell and not that, a sale should be arranged beforehand and due notice of all details of the time, date and place of sale be given to the pawnor.”

3. Based on the above principles, this court was of the view that the notices that had been issued on July 17, 2021 did not provide the petitioner with a clear intent of sale as is required under Section 176. In fact, the words used therein were “right of sale” which the Court found to not being the same as an intention to sale. Accordingly, the notices were permanently injuncted. The relevant paragraphs are delineated below:-

“23. Upon a reading of the relevant clauses in the above notices issued to the petitioner it appears that on failure of the petitioner to make payment of the outstanding dues the defendant would have a right of sale. This right of sale is further specified in the preceding paragraph of the notice which says that the defendant shall have the right to enforce the pledge by transferring the New BTL Pledge Shares into the respondent bank’s depository account and/or selling the New BTL Pledged Shares. It is noticeable that in both