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17.02.2023

1.

The present suit has been instituted for a declaration that the

sale of shares pledged by the plaintiff under the Pledge Agreement

dated 07 March 2021 in terms of a Recall Notice dated 17 November

2022 was illegal, invalid and void. The suit also lays a claim for

damages.

2.

The Plaintiff and Defendant No.1 executed a Debenture Trust

Deed dated 07 March 2021 in terms of which the Plaintiff issued and

allotted 40,000 unlisted and non-convertible debentures of the

nominal value of Rs.1,00,000 each and thus aggregating to Rs.400

crores in seven series to Defendant Nos.2 and 3. The Plaintiff in terms

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of the said Agreement appointed Defendant No.1 as the Debenture

Trustee for the benefit of and to act on behalf of Defendant Nos.2 and

3, debenture holders. In order to secure the financial facility granted

to Defendant Nos.2 and 3, the Defendant No.1 executed a Pledge

Agreement in terms of which the shares came to be pledged in favour

of Max Financial Services Limited.

3.

The Defendant, vide a Recall Notice dated 17 November 2022,

recalled the entire loan and provided that if the entire dues are not

repaid within one day, the shares as pledged would be sold. It is the

case of the Plaintiff that on the same date the Defendant Nos.1, 2 and

3 proceeded to sell a substantial portion of the pledged shares, namely,

54,00,000/- shares for INR 341,51,28,066.90/-. It is in the aforesaid

backdrop, the instant suit came to be preferred before this Court.

4.

Since the suit is registered on the commercial side of the Court

and was asserted to stem from a commercial dispute which exists, it

was also accompanied with a Statement of Truth¹ as envisaged

under Order VI Rule 15A of the Code of Civil Procedure, 1908² as

adopted and made applicable to commercial suits in terms of the

Schedule appended to the Commercial Courts Act, 2015³.

5.

On 16 December 2022 when the matter was taken up, an

objection was taken by Defendant No.1, 2, and 3 with respect to the

various disclosures made in the SoT. In order to enable the said

Defendants to articulate the objections which stood raised, the Court

had permitted them to file an affidavit specifying and particularizing

the objections which had been orally addressed. It becomes pertinent

to note that insofar as the Plaintiff is concerned, it had been the

submission of Mr. Srinivasan, learned Senior Counsel appearing for

the said party, from inception that the Defendants essentially seek the

1 SoT

2 Code

3 2015 Act

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

The Order is downloaded from the DHC Server on 29/01/2024 at 03:14:39

Court to undertake a pre-trial enquiry as to whether the disclosures

made in the plaint suffer from suppression of material facts. It was his

submission that the Defendants could have a right of audience only

upon summons being issued.

6.

Pursuant to the liberty granted, the Defendant Nos.1, 2 and 3

have proceeded to file the affidavit in terms of the liberty granted.

From a reading of the said affidavit it is manifest that the Defendants

contend that there has been a deliberate suppression of material facts

and a failure on the part of the plaintiff to bring on record relevant

documents and consequently the SoT suffers from fundamental

defects and the suit therefore is liable to be rejected on that score.

7.

Mr. Sethi, learned Senior Counsel appearing for the Defendant

Nos.2 and 3, has drawn the attention of the Court to the provisions

contained in Order VI Rule 15A and which mandates a SoT

accompanying pleadings which form part of a commercial dispute.

Apart from the provisions of Order VI Rule 15A, Mr. Sethi also

placed re