Indian Kanoon - Search engine for Indian Law

15.3 By a common order dated 16.04.2021, the Division Bench of this Court disposed of the said appeals by suspending the order dated 23.03.2021 impugned in the aforementioned appeals and remanding the matter to the Single Judge, as the Court was of the view that it was incumbent on the Court to give reasons for passing the interim orders. During the said proceedings before the Division Bench, the learned counsel appearing for the Borrowers and Kadam expressed an apprehension that suspension of the orders dated 26.03.2021 passed under Section 9 of the A&C Act would leave Indiabulls free to invoke the pledge of shares in question and, this would irreparably prejudice the interest of the Borrowers and Kadam. In response to the aforesaid contention, it was stated on behalf of Indiabulls that "the invocation of pledge of shares will be undertaken in a completely transparent manner, on a fair evaluation of the shares and that the same would also be placed before the learned Single Judge". The Division Bench noted the aforesaid contention and also observed that any such invocation would be open to challenge before the Court.

- 116/2021], which were also listed on 22.04.2021, a statement was made on behalf of Indiabulls that it had sold the entire shareholding in Kadam to DLF for ₹900 crores. The same was disputed on behalf of the Borrowers/Kadam. In view of the controversy, this Court directed Indiabulls to produce the entire record relating to the sale of shares of Kadam in a sealed cover before the learned Arbitrator. This Court further directed that the Arbitrator would consider its effect on the prayer sought by the petitioner in terms of the observations made by the Division Bench in paragraph 10 of its order dated 16.04.2021. As noted above, in paragraph 10 of the order dated 16.04.2021, the Division Bench had noted the statement made on behalf of Indiabulls that the pledge of shares would be undertaken in a transparent manner on a fair valuation of the shares. The Court had also observed that since the lis between the parties was pending before the learned Single Judge, the invocation of pledge would "obviously be open to challenge before the Court". The petitions under Section 9 of the A&C Act were disposed of with the aforesaid directions and by directing that the same be considered as applications under Section 17 of the A&C Act.

15.15 Next, the Court noted a statement made on behalf of Indiabulls that the shares of Kadam had been sold to DLF. The Court prima facie found that the sale of the Pledged Shares (the entire issued and paid up equity shares of Kadam) was done in a transparent manner. It noted that "Indiabulls has disclosed the purchaser and also the amount at which the sale has been done". It was noted that Indiabulls had made an offer to the Borrowers to redeem the Pledged Shares on a payment of ₹900 crores. But the Borrowers had not done so. Insofar as the dispute regarding valuation of the shares is concerned, the Court observed that the same could be adjudicated only by the Arbitral Tribunal and the Court cannot interfere in this aspect. The Court further noted that a notice of invocation of pledge (Sale Notice) had been issued by Indiabulls to the Pledgors providing them an opportunity to redeem the Pledged Shares before proceeding with its sale. They had also failed to pay/deposit ₹900 crores, which was the stated sale consideration for the Pledged Shares. Accordingly, the petitions were dismissed as unmerited.

49. He also countered the contention that ATS was in its nature, determinable.

Reasons & Conclusions Sale of Sale Property and invocation of Pledge of Pledged Shares, not mutually exclusive

50. At the outset, it is necessary to state that Indiabulls has sought to interlink the controversy regarding termination of the ATS with the dispute raised by Shipra Group of entities in respect of its agreement with M3M for sale of the Pledged Shares. Some of the submissions made by the counsels for the parties were premised on the basis that the said transactions are mutually exclusive.