The court enforced status quo orders regarding estate shares to secure loan recovery, affirming proper conduct in succession matters amid ongoing litigation.

ORDER

Mini Pushkarna, J.

I.A. No. 10373/2020 (Application on behalf of the plaintiff under Order XXXIX Rule 1 and 2 of CPC seeking interalia interim restraint on grant of succession certificate with respect to 23,85,530 shares of VLC Capital Ltd.)

1. This is an application on behalf of the plaintiff seeking interim restraint on grant of succession certificate with respect to 23,85,530 (twenty three lakhs eighty five thousand five hundred thirty) shares of VLS Capital Ltd, registered in the name of defendant no. 1.

2. It is the case of the plaintiff that by order dated 30.04.2019, this Court had directed that status quo be maintained with respect to the aforesaid shares. Despite the aforesaid order, the defendant no. 1 and 2 are aggressively pursuing the succession proceedings in respect of the aforesaid shares.

3. The present suit has been filed by the plaintiff seeking recovery of loan of Rs.1,50,00,000/- (Rupees One Crore fifty lakhs only) extended to late Mr. Somesh Mehrotra during 2007-2008, along with interest calculated @12% per annum until the date of realisation. It is submitted that at the time of grant of loan, late Mr. Somesh Mehrotra was a Director in the plaintiff company and also had its 2000 preference shares. The total amount due and recoverable by the plaintiff on the date of filing of the suit on 30.04.2017, was Rs.4,18,61,406/- (Four crores, eighteen lakhs sixty one thousand four hundred six). The said amount as on 30.09.2020 was Rs.6,17,59,830/- (Six crores seventeen lakhs fifty nine thousand eight hundred thirty).

4. It is submitted on behalf of the plaintiff that late Mr. Somesh Mehrotra held 96,38,020 shares in VLS Capital Ltd. Out of the said shares, 27,60,400 (Twenty seven lakhs sixty thousand) shares were gifted to him by Mr. M.P. Mehrotra on behalf of Mr. Vikas Mehrotra. 44,92,090 (forty four lakhs ninety two thousand ninety) shares were gifted to him by Mr. M.P. Mehrotra on behalf of M.P. Mehrotra HUF, in which Mr. Vikas Mehrotra is a coparcener and had vital financial interest. It is submitted that the title of late Mr. Somesh Mehrotra to the aforesaid 72,52,490 (Seventy two lakhs fifty two thousand four hundred ninety) shares were disputed by Mr. Vikas Mehrotra by challenging the aforesaid gift deeds in CS (OS) No. 3067/2015 and CS (OS) No. 3314/2015. The said suit proceedings are pending till date. It is submitted that in the aforesaid proceedings, status quo was granted with respect to 72,52,490 (Seventy two lakhs fifty two thousand four hundred ninety) shares of VLS Capital Ltd.

5. It is further submitted on behalf of the plaintiff that apprehending misuse/dilution/alienation of the balance shares of VLS Capital Ltd. owned by late Mr. Somesh Mehrotra, the plaintiff sought a status quo with respect to the balance 23,85,530 (twenty three lakhs eighty five thousand five hundred thirty) shares in the present proceedings in order to secure the recovery amount. As per the plaintiff, status quo order was granted by this Court by way of order dated 30.04.2019. However, the aforesaid security only secures the plaintiff to the extent of Rs.2,38,55,300 (Rupees Two crores thirty eight lakhs fifty five thousand three hundred only) whereas the total outstanding is more than Rs.6,00,00,000/- (Rupees six crores only).

6. It is contended on behalf of the plaintiff that the defendants no. 1 and 2 have started aggressively pursuing the proceedings for grant of succession certificate for assets of late Mr. Somesh Mehrotra, including shares of VLS Capital ltd., despite the aforesaid status quo orders. In view of this, the plaintiff