The judgement in the case of Aditya Khaitan And Ors vs Il And Fs Financial Services (AP/206/2020) was served by The Hon’ble JUSTICE MOUSHUMI BHATTACHARYA
FACTS OF THE CASE:
This is an application under Section 9 of The Arbitration and Conciliation Act, 1996, in which the petitioners seek to restrain the respondent from selling or dealing with 1,61,29,000
Compulsorily Convertible Preference Shares (CCPS) of the petitioner No.3, McNally Bharat Engineering Company Ltd. which were subscribed by the Respondent on a private placement basis under agreements entered into between the parties herein. The dispute touches three agreements, namely, a Share Subscription and Shareholders’ Agreement, an Option Agreement and two Pledge Agreements, all of which were executed on 27th March, 2018. The trigger to the application is a notice dated 2nd July, 2020 issued by the respondent for invoking and selling the shares pledged to the Respondent. By an order dated 30th July, 2020, the respondent had been restrained from selling any further shares which form the subject matter of the notice of invocation dated 2nd July, 2020. The order was passed on the premise that the respondent had proceeded to sell the pledged shares and that the matter would be considered further after a complete disclosure of the relevant documents by the parties.
The Court after going through the facts and the arguments advanced observed that these cases cannot assist the petitioners for injuncting IFIN from proceeding in terms of enforcing its right under the Pledge Agreements. Even if this Court were to disregard the annual returns of Williamson Magor for 2019-2020, the question with regard to IFIN being lawfully entitled to enforce its right under the Pledge Agreements remains undisturbed. For the above reasons, the order dated 30th July, 2020 restraining IFIN from exercising its rights under the relevant agreements and selling the balance shares, is vacated. AP 206 of 2020 does not disclose any grounds for granting the reliefs prayed for and is accordingly dismissed without any order as to costs.
JUDGEMENT REVIEWED BY AKANKSHA