The Bombay High Court on Friday refused a plea by the promoter of DishTV India Pvt Ltd, seeking to restrain Yes Bank, a shareholder of DishTV, from exercising its rights – including voting rights – over shares held by the bank.
The single-judge bench of Justice Anil K Menon rejected an interim application for urgent relief by World Crest Advisors LLP, promoter group of DishTV, seeking to restrain Catalyst Trusteeship and Yes Bank from participating in and/or exercising any right, including voting rights, in the Extra-ordinary General Meeting (EGM) scheduled on June 24.
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Last month, DishTV had made an announcement about EGM to ratify and pass a resolution for re-appointment of the managing director, the whole-time director and a non-executive independent director of DishTV.
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An interim application was filed in a suit wherein World Crest has sought itself to be declared as owners of over 440 million (nearly 24.19% stake) shares of DishTV.
However, Yes Bank had claimed that the concerned shares have been pledged in favour of Catalyst Trusteeship, a security trustee, by five other companies to secure the term loans granted by the bank to them. Yes Bank claimed to be the beneficial owner of the shares and sought to exercise rights in respect of the same. The World Crest, in its suit, had claimed that the Catalyst had acted in collusion with the bank and transferred the shares to itself and later to the bank.
Plaintiff World Crest, through senior advocate Navroz Seervai, submitted that it had facilitated pledge of suit shares as security with Catalyst on the basis of assurances and representations made by defendants, including the bank, that the shares would at all times continue to be World Crest’s “absolute property,” unless the same are sold pursuant to default.
The DishTV promoter apprehended that the bank will seek to vote on the suit shares over which only the former had entitlement rights, and therefore sought a restraining order.
Yes Bank, through senior advocate Venkatesh Dhond, however opposed the application and claimed that it is entitled to exercise voting rights and that they have been exercising voting rights in the past hence the balance of convenience does not favour the applicant.
Dhond added that Rs 5,270 core are payable and overdue from the borrowers and the applicant is part of the group controlling the borrowers. He added that it is one more attempt to stall the bank’s participation at the ensuing meeting, since the applicant failed to obtain a favourable order last year.
After perusing submissions, the bench accepted the bank’s submissions and held, “The applicant (World Crest) has not made out a prima facie case nor is the balance of convenience favouring grant of relief. No irreparable harm is likely to be caused to the plaintiff/applicant. There is no occasion to once again consider the grant of relief… Accordingly, ad-interim relief is refused.”
The court also directed the defendants, including the bank, to file their replies if any within four weeks in the pending suit and asked plaintiff World Crest to file its rejoinder two weeks thereafter.