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Showing contexts for: invocation of pledge in Icici Securities Primary Dealership ... vs Goodwill Enterprises Limited on 22 May, 2020Matching Fragments
38. It is imperative to note that both the aforesaid clauses are conspicuous by their absence in the Letter of Lien. The Letter of Lien does not record that the pledge shall be a continuing security coextensive and coexisting with the liability of the borrower.
39. Even the consequences which would emanate after the invocation of pledge and sale of the shares have been distinctly provided for. In Clause Mrs.S.K. Talekar, PS 34/38 COMS-8-1998-J.doc
(e) of the Deed of Pledge (Exh.C) which corresponds with Clause 7 of the Letter of Lien (Exh.I), the following portion is added :
"..........and if the net proceeds are insufficient to discharge the full amount of the said liability, the company will immediately pay to the Bank the balance left outstanding."
The absence of this stipulation in Clause 7 of the Letter of Lien speaks for itself. In the Deed of Pledge, the liability of defendant No.1 as a pledger was made coextensive and coexistent with the liability under the agreement. Even after invocation of pledge, the defendant No.1 continued to be liable to make up the short-fall in the event the sale proceeds fell short of the liability. That is not the case qua defendant No.5 under the Letter of Lien.
43. The upshot of the aforesaid consideration is that though the Letter of Lien is not unenforceable on account of the blank spaces therein, as contended by the defendant No.5, yet the liability of defendant No.5 is restricted to the pledged securities only. Conversely, the plaintiff cannot enforce the liability qua defendant No.5 as a co-existent and coextensive liability with that of the defendant No.1-the principal borrower. The plaintiff's right under Letter of Lien is, thus, restricted to the invocation of the pledge and sale of the pledged securities, as provided in Clause 7 of the Letter of Lien (Exh.I). Issue No.3 is, thus, answered in the affirmative to the extent of right to sell the pledged shares and realise the sale Mrs.S.K. Talekar, PS 38/38 COMS-8-1998-J.doc proceeds and appropriate the amount towards the liability of defendant No.1, and issue No. 4 is answered in the negative.