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Showing contexts for: invocation of pledge in Gtl Limited & Ors vs Ifci Ltd & Anr on 6 July, 2012Matching Fragments
c) In the present case, the notice requirement comes into play only at the time of sale and not at the time of invocation of pledge. Thus, when the defendant has sold 5,00,426 shares in the market, the defendant No.1 ought to have given the notice under Section 176 of the Act. Nevertheless, now as the sale has been effected, the only remedy lies to the plaintiff or defendant No.3 (plaintiff No.3 herein) is under the law of Torts
d) The foreclosed shares or 17,63,68,219 shares appropriated by the defendant to itself is done in contravention to the law of pledge as no such right to foreclosure is available to the pledge. His equitable title cannot exceed what has been permissible under the law. Accordingly, the defendant No.1 is still a pledgee of the said appropriated shares
e) The stipulation in agreement giving absolute right to sell after the invocation of pledge is contrary to the law and thus prima facie illegal and cannot come in the way of effecting the valid pledge.
f) Normally, the suit for redemption can be filed when there is a reciprocal act of paying at one hand and giving back the security at the other. As there is illegality in the sales and the plaintiff and defendant No.3 (plaintiff No.3) although are group companies but have separate performances to perform, such kind of arrangement is entered into and this Court has only passed this order to legitimize the relations so as to facilitate the immediate redemption legally.
g) The defendant No.1 is accordingly the pledgee of 27,37,29,000 equity shares in totality which it can treat them as per the law in view of the remedies available under Section 176 of the Act along with the remedies available under the contract. The said shares are open to redemption by either by the plaintiff and defendant No.3.
h) The event of default has accrued on account of non maintenance of topping up of security cover which is stipulated in clause v under the head of event of default and the redemption of shares is open on account of the occurrence of event of default and consequent invocation of pledge by the defendant No.1.