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IN THE HIGH COURT OF DELHI
V. Kameswar Rao, J.
Khoobsurat Infra Pvt. Ltd. - Appellant
Versus
IDBI Trusteeship Services Ltd. - Respondent
OMP(I)(COMM) 135 of 2020, I.A. 4847 of 2020, OMP(I)(COMM) 136 of 2020, I.A. 4848 of 2020 and OMP(I)(COMM) 137 of 2020, I.A. 4849 of 2020
Decided On : 03-07-2020
| Table of Content |
|---|
| 1. challenge to pledge invocation notices. (Para 1 , 2 , 3 , 4 , 5) |
| 2. financial background of the pledgors and market conditions. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 3. debenture issuance and obligations in contracts. (Para 14 , 15 , 16 , 19 , 20 , 21 , 22) |
| 4. default notifications and pledge invocation. (Para 23 , 24 , 25 , 26 , 27) |
| 5. petitioners' arguments regarding fair play in market. (Para 28 , 29 , 30 , 31 , 32 , 33 , 34) |
| 6. previous stake sales and pleas for fair transactions. (Para 39 , 40 , 41 , 42) |
| 7. respondent's assertions of contractual rights. (Para 46 , 47 , 48 , 49 , 50 , 51 , 52) |
| 8. legal arguments regarding market trends and obligations. (Para 60 , 61 , 62 , 63) |
| 9. fairness in executions and market fluctuations. (Para 64 , 65 , 66) |
| 10. equity structure and prior approval legalities. (Para 69 , 70 , 71) |
| 11. summary of disputes on merits. (Para 74 , 75 , 76) |
| 12. final judgment and dismissal of petitions. (Para 86) |
JUDGMENT
V. Kameswar Rao, J.
I.A. 4847/2020 in OMP(I)(COMM) 135/2020
I.A. 4848/2020 in OMP(I)(COMM) 136/2020
I.A. 4849/2020 in OMP(I)(COMM) 137/2020
Exemptions allowed subject to all just exceptions.
Applications stand disposed of.
OMP(I)(COMM) 135/2020
OMP(I)(COMM) 136/2020
OMP(I)(COMM) 137/2020
1. The challenge in these petitions is to a Pledge Invocation Notice (`Pledge Invocation Notice' for short) dated June 12, 2020 issued to the petitioners herein and additionally Corporate Guarantee Notice (`Corporate Guarantee Notice' for short) dated June 12, 2020 issued to the petitioners in OMP (I) COMM 136/2020 and in OMP (I) COMM 137/2020.
2. The facts and the issue which falls for consideration in all these three petitions being similar, they are being disposed by this common order.
3. The Prayers made in the petition are the following:
OMP (I) (COMM) 135/2020
"In view of the facts and circumstances as stated above, it is most respectfully prayed that this Hon'ble Court may be pleased to:
A. Restrain the Respondent No.1 from acting on the Pledge Invocation Notice against the Petitioner, including from invoking the pledge and/or selling the pledged shares in open market, during the pendency of the present Petition and/or conclusion of arbitration proceedings.
B. Order costs of the present proceedings in favour of the petitioner.
C. Pass any such or further orders as may be deemed fit by this Hon'ble Court in the facts and circumstances of the present case."
4. OMP (I) (COMM) 136/2020
"In view of the facts and circumstances as stated above, it is most respectfully prayed that this Hon'ble Court may be pleased to:
A. Restrain the Respondent No.1 from acting on the Pledge Invocation Notice against the Petitioner, including from invoking the pledge and/or selling the pledged shares in open market, during the pendency of the present petition and/or conclusion of arbitration proceedings;
B. Restrain the Respondent No.1 from acting on the Corporate Guarantee Notice against the Petitioner during the pendency of the present Petition and/or conclusion of arbitration proceedings;
C. Grant ad-interim reliefs in terms of Prayer A and B above;
D. Order costs of the present proceedings in favour of the petitioner;
E. Pass any such other or further orders as may be deemed fit by this Hon'ble Court in the facts and circumstances of the present case."
5. OMP (I) (COMM) 137/2020
"In view of the facts and circumstances as stated above, it is most respectfully prayed that this Hon'ble Court may be pleased to:
A. Restrain the Respondent No.1 from acting on the Pledge Invocation Notice against the Petitioner, including from invoking the pledge and/or selling the pledged shares in open market, during the pendency of the present petition and/or conclusion of arbitration proceedings;
B. Restrain the Respondent No.1 from acting on the Corporate Guarantee Notice against the Petitioner during the pendency of the present Petition and/or conclusion of arbitration proceedings;
C. Grant ad-interim reliefs in terms o
A pledgee has the unfettered right to invoke the pledge and sell pledged shares upon default, governed by the Indian Contract Act, regardless of prevailing economic conditions.
The judgment emphasizes the requirement of reasonable notice for the sale of pledged goods and highlights the impact of the Depositories Act on the rights of redemption against third parties.
Sale of pledged shares by creditor during CIRP moratorium violates Section 14 despite possession transfer on invocation; ownership remains with debtor. Sold listed shares unrestorable; debt reduces b....
24. Point of Law : One notice in contradistinction to giving a shorter period in another notice for shares of the same company that are pledged with the defendant does not stand to reason and is acco....
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