TaxTMI 
TaxTMI 
TaxTMI 
2020 (6) TMI 273
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.... in terms of the SC Order by creating an appropriate security in respect of such number of the Unsold Units in Towers C1 and C2 in Defendant No. 4's Project and/or by creating a hypothecation on the future receivables of sold units in Towers C1 and C2 in Defendant No. 4's Project as detailed in Paragraph 65 above without the requirement of any consent from the Plaintiffs in that regard ; (b) grant a mandatory injunction and pass such necessary orders and directions against Plaintiff No.2 to enable Defendant No. 4 to undertake its business and affairs including by raising finance for re-commencing and completing the development of the Project including Towers C1 and C2 by creating appropriate security in respect of Defendant No. 4's Project including the Land and the development of Towers C1 and C2 thereon and future receivables of units in Towers C1 and C2 in Defendant No. 4's Project as detailed in Paragraph 65 above, without requirement of any consent from the Plaintiffs in that regard; (c) pass such prohibitory orders and injunction restraining the Plaintiffs and/or their employees, servants, affiliates, associates from interfering and/or obstructing in the business of Defen....
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....ng which the interim stay granted by the Bombay High Court against the execution of the arbitral award would stand vacated. 6. Since defendant No.4 was short of funds in order to comply with the order dated 4th February, 2020 an email dated 21st February, 2020 was addressed to the plaintiffs requesting their permission for generating funds by availing secured/unsecured loan facility, sale of remaining stock of flats etc. It is the case of the applicants that vide their reply dated 2nd March, 2020, plaintiffs made wrongful allegations against the applicants and rejected the proposal made by the applicants for generation of the funds. Due to the nationwide lockdown due to outbreak of COVID-19, defendant No.4 was unable to deposit the amount as directed by the Supreme Court. Consequently a miscellaneous application being Misc.Appl. No.927/2020 in SLP (C) No.25412/2019 was filed before the Hon'ble Supreme Court inter alia seeking extension of time to comply with the directions passed vide order dated 4th February, 2020. 7. According to the applicants vide order dated 11th May, 2020 the Hon'ble Supreme Court granted extension of time and directed defendant No.4 to pay an amount of Rs.....
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....tters' agreed to between the plaintiffs and defendant No.4 no major decision in regard to project can be taken without prior written approval of the plaintiff No.2. Under the Debenture Trust Deed (DTD) and the amended Article of Association (AOA), plaintiff No.2 has a right to appoint the majority Directors on the Board of defendant No.4 and from 2nd March, 2015 onwards till 31st September, 2019 the plaintiff No.2 was in control of the management of defendant No.4. All the nominee Directors of plaintiff No.2 resigned from the Board w.e.f. 31st September, 2019 so as to wriggle out of the rigours of RERA and other laws. The plaintiff No.2 has also not chosen to appoint any Director on the Board of defendant No.4 since 31st September 2019. Since in the suit the defendant No.4 is not being represented by any Advocate the applicants being the 100% shareholders of defendant No.4 have filed the present application in the representative capacity of defendant No.4 to secure its beneficial interest and recognised investment. In compliance with the terms relating to 'reserved matters' defendant No.4 sought consent of plaintiff No.2 for conducting its affairs including for reviving the project....
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....ea for the reason there was no agreement between the parties for investment in equity as the DSA superseded the Term Sheet. Further this grievance was never raised by the applicants and only when in the month of 2019 the plaintiffs issued notice of default to the applicants, a suit was filed in Pune to circumvent the plaintiffs' actions against the defendants. Further even by the resolution dated 15th January, 2018 defendant No.1 was absolved to the limited extent of maintenance of customer relationship, delay in the project and any workman related issue or any accident however, defendant No.3 was never absolved. Further defendant No.1 was also not absolved of any other duties cast on him and specifically the liability with regard to the POSCO litigation. Referring to various provisions in the DSA, the schedule thereto and the resolution, learned counsel for the plaintiffs submits that the relief sought by the applicants is not maintainable. 12. The applicants have not challenged the provisions of DSA till date. The plaintiffs are secured creditors and have first charge with the right to sell or create charge on the project of defendant No.4 and POSCO being at best an unsecured cr....
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....in equity or extend any further loan to defendant No.4. The sale/allotments of the apartments as informed during the course of the arguments in the project were made prior to the disbursement of the loan by plaintiff No.2, that is, before 2nd March, 2015 and the submission of learned counsel for the applicants that the apartments were allotted/sold between 2015 to 2018 is factually incorrect. Even if there is a liability of POSCO on defendant No.4 the same is at best like an unsecured creditor and cannot triumph the rights of plaintiff No.2 who is a secured creditor. 14. Learned counsel for the plaintiffs contends that a party who has not purged the contempt till date has no right of hearing as despite directions of this Court to file an affidavit by the defendant Nos.1, 2 and 3 in terms of the decision of this Court in M/s Bhandari Engineers & Builders Pvt. Ltd. vs. M/s Maharia Raj Joint Venture & Ors., Execution Petition No.275/2012 decided on 5th December, 2019, no affidavit has been filed. As regards the affidavit of assets filed earlier by defendant Nos.1 and 3 the plaintiffs have pointed out how there was embezzlement of funds. It is further contended that the present applic....
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....jurisdiction of the Courts to try all suits of civil nature is very expensive as is evident from the plain language of Section 9 of the CPC. The two tests, relevant in dealing with the question about the exclusion of civil courts' jurisdiction are (a) whether the special statute which excludes such jurisdiction has used clear and unambiguous words indicating that intention; and (b) does that statute provide for an adequate and satisfactory alternative remedy to a party that may be aggrieved by the relevant order under its material provisions. Reliance is placed upon the decisions of the Supreme Court reported as AIR 1969 SC 78 Dhulabhai v. State of M.P.; (2009) 4 SCC 299 Rajasthan SRTC v. Bal Mukund Bairwa (2); (2002) 6 SCC 416 Dhruv Green Field Ltd. v. Hukam Singh. 17. It is further contended that on a plain reading of Section 430 of the Companies Act it is clear that the civil Court's jurisdiction is not ousted in so far as the relief of injunction against the person from interfering with the smooth management of the company and its affairs by the directors of the said company is concerned. Reliance is placed on the decisions reported as 2016 SCC OnLine Del 512 Rajeev Saumit....
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....ntative capacity, in case the wrongdoers themselves control the company or if the directors are in the wrong and carry out the affairs of the company in a prejudicial manner. [see (2002) 3 CompLJ 331 (Del) Spectrum Technologies USA Inc. v. Spectrum Power Generation Company Ltd. and ILR [1976] MP 30 : 1975 MPLJ 390 Prakashchandra Rajmal Jain v. Firm Swarupchand Hukumchand and Co.] 21. Heard learned counsel for the parties. 22. Present suit has been filed by Vistra ITCL (India) Ltd. and Ammon Holdings Pte. Ltd. as plaintiff Nos.1 and 2 respectively impleading Lalit Kumar Jain, Pranay Lalit Kumar Jain, Kumar Urban Development Private Limited (in short 'KUDPL'), Sinew Developers Pvt. Ltd. (in short 'SDPL') and Kumar Housing Corporation Pvt. Ltd. (in short 'KHCPL') as defendant Nos.1 to 5 respectively. 23. Case of the plaintiffs is that a resolution dated 3rd December, 2014 was passed by the Board of Directors and Shareholders of SDPL in relation to raising of funds by way of issuance of non-convertible debentures (NCD's) on a private placement basis in two tranches. On 5th December, 2014 Series A debenture Subscription agreement Series A ( in short DSA) was executed between the plai....
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....entures and remitted an amount of Rs.30 crores to defendant No.1. Thus the total investment of plaintiff No.2 with defendant No.4 was a sum of Rs.190 crores. After the subscription of the debentures by the plaintiff No.2 in defendant No.4, defendant Nos.1 to 4 continuously defaulted in complying with their obligations resulting in plaintiffs issuing a default notice being Series A default notice on 5th October, 2018 and Series C default notice on 11th October, 2018. 26. As the project was suffering the Board of Directors of defendant No.4 vide its Board Resolution No.19/2017-2018 dated 15th January, 2018 appointed an independent management team of professionals to aid the defendant Nos.1 to 3 to expedite the development, construction, marketing and sale of the project. However, due to subsequent events the independent management team fearing for their life, safety and career resigned from their posts for the reason there were various threats, hindrances and obstacles at the project site. The parties thereafter exchanged replies to the notice and the rejoinder thereto whereafter the defendant Nos.1 to 3 filed a civil suit before the District Court Pune seeking a restraint on the pl....
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....tempting to Transfer any Pledged Shares, being 65,00,000 equity share constituting 100% of the share capital of Defendant No.4. 28. Vide order dated 30th July, 2019 this Court decided the question regarding the viability of the security option given by the defendants, to secure the amount claimed by the plaintiffs in the present suit till final adjudication of the injunction application and modified the order dated 28th May, 2019 as under: 42. Till the application is heard and decided, the Court will also have to ensure that Defendant No. 3 does not fetter away its assets to render the Plaintiff without any effective recourse. Having given my thoughtful consideration on every aspect, I feel that since the security being offered by the Defendants in the nature of Options 1, 2 & 3 cannot be accepted, the alternate proposal of depositing an amount, in a separate no lien account, generated from the sale of each flat or unit from any of Defendant No. 3's ongoing project or projects proposed to be launched in future, till further orders of this Court, is a more viable and a purposeful approach in the current scenario. Thus, notwithstanding the rejection of the options given by Defenda....
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.... No. 3 to carry out its routine/ordinary course of business which includes the construction and development of its projects, undertake sale of flats/units being developed by Defendant No. 3 and to receive sale proceeds therefrom; enter into fresh development agreements, joint ventures agreements and to receive consideration therefrom. However, the sale of flats/Units being developed by Defendant Nos. 1 to 3, is subject to the above-mentioned conditions. Defendants have sought further clarification by way of seeking permission to undertake corporate restructuring in the nature of Mergers and Amalgamations with Defendant No. 3. However it is not within the purview of this Court to expand or dilute the scope of its own order by way of a clarification to its previous order and therefore no clarification is necessary on the above aspect. 46. Needless to say that this order only clarifies the injunction order dated 28th May 2019 as modified on 9th July 2019 and the opinion expressed by the Court is only a prima facie view and contentions of the parties and merits of their case shall be examined uninfluenced by the observations made in this judgment. 29. Thus, so that further developme....
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.... 2.5 Tenor and Redemption. 2.5.1 The Series A Debentures shall have a maximum tenor of 60 (sixty) months from the Tranche1 Deemed Date of Allotment ("Tenor"). The Company shall proportionately redeem all the Series A Debentures collectively through reduction in face value of each Series A Debentures without distinguishing between the Series A Debenture Holders. An indicative schedule for redemption is set forth at Schedule XV hereto. Notwithstanding anything contained in this Agreement, the Company shall mandatorily redeem all and not less than all of the Series A Debentures in full by paying the entire Redemption Amounts on or before the expiry of the Tenor ("Final Redemption Date"). 2.5.2 Notwithstanding anything contained in this Agreement and without prejudice to all the rights and entitlements of the Series A Debenture Holders under the Law or the Transaction Documents, (i) if an Event of Default has occurred and has not been rectified within the Rectification Period to the satisfaction of the Series A Debenture Holders; or (ii) if the Company, by the expiry of the Final Redemption Date, has not redeemed all and not less than all the Series A Debentures by paying the enti....
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....ly to the development rights and, or, leasehold rights/ entitlements granted to the Company into the Project Land, the Additional Leased Lands and, or, the ATSL Land, and, or, any other rights, titles, interest that the Company has or it may acquire in the Project Land, the Additional Leased Lands, the ATSL Land and, or, the Project. In the event the Company, by the expiry of the Final Redemption Date, has not redeemed all and not less than all the Series A Debentures by paying the entire Redemption Amounts to the Series A Debenture Holders, the Series A Debenture Holders shall be entitled to take over the management, control and operations of the Company, including the Board of directors (in which event the Series A Debenture Holders shall be entitled to nominate and appoint all of the directors on Board of Directors of the Company) and the development rights, leasehold rights to the Project Land and assign/ transfer the said development rights/ leasehold rights to any person or persons on such terms and conditions as the Series A Debenture Holders may in its sole discretion determine and shall also be entitled to remove and replace the Person/ employees, officers and, or, board m....
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....dge, hypothecation, grant of security interest in, exchange or other disposition of any asset/ property of the Company or any business restructuring, merger, demerger, spin off or reconstruction of the Company, except the sale of units/ spaces/ built up area in the Project to its customers not below the price set forth in the Approved Business Plan. (iii) Obtaining secured and unsecured financing/ lending facilities (construction, permanent, working capital, bridge, mezzanine or any other financing). (iv) Guaranteeing of debts or obligations of any Person by the Company; and, or, recommending, giving or renewing any guarantee, indemnity or security' in respect of obligations of the Company. (v) xxx xxx xxx (vi) Any divestment or sale (including but not limited to a lease or exchange) of assets of the Company. (vii) xxx xxx xxx 31. The applicants heavily relied on the document titled as Head of Terms, a document of 2013 which stands superseded by the DSA and hence no reliance thereof can be placed. However, it would still be appropriate to note the Head of Terms' clause as under: "HEADS OF TERMS 1. Ownership Xxx xxx &nbs....
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....a as mentioned above. 2. Rs. 500 MM Obtaining approval of building plans to build 7,15,763 Sq. ft. FSI totaling to saleable area of 1,009,689 Sq. ft. and achievement of at least a base sales price of Rs. 9,500 / Sq. ft. for 25 new units sold over and above 86 units already sold till date. This investment amount may reduce on account of any downward variation in FSI or saleable area as mentioned above. 3. Rs. 350 MM Achieving base sales price of Rs. 11,000 / Sq. ft. for 30 new units sold over and above those sold for meeting the milestones for previous tranches. 4 Rs. 450 MM Project achieving base ales price of Rs. 12,000/ Sq. ft. for 100 new units sold over and above those sold for meeting the milestones for previous tranches and receipt of 40% of the sale consideration of these units. The Company will have the option to request for disbursement of this tranche within a fixed period of time as may be specified in the definitive agreements. Total Rs. 2800 MM 9. Exclusivity Developer / Company and all their affiliates, management, related p....
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.... and they will keep the Board informed of the same." "RESOLVED FURTHER THAT the aim of the Independent Management will be to maximize profits of the Company, efficiently manage the Project, repay all the debenture holders of the Company, maximize profits in the hands of original promoters and the Independent Management shall work within the framework of a business plan approved by the Board." "RESOLVED FURTHER THAT the Independent Management shall undertake and be in control of all of the operations and management of the Company under the sole supervision of the Board and to the exclusion of supervision, control or direction of any specific shareholders of the Company, including without limitation in relation to: (i) undertaking the development, construction, marketing and sale of the Project; (ii) to take decisions towards cost of construction and development within the business plan sanctioned by the Board. All decisions beyond the approved business plan shall require Board approval; (iii) liaising with Government authorities in respect of the business of the Company and the management of the Project; (iv) engaging, monitoring and supervising the contractors, consulta....
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....." "RESOLVED FURTHER TBLAT appointment of Ms. Sonica Tater, as the company secretary of the Company, is hereby approved. It is taken on record that, Ms. Sonica Tater will be the company secretary of the Company, and shall at all times report to the Board and act as per the instructions of the Board. Ms. Sonica Tater shall be responsible for compliance with applicable laws and regulations by the Company." "RESOLVED FURTHER THAT it be taken on record that. Mr. Lalit Kumar Jain and KUDL (directly or indirectly or through its directors, shareholders, employees, agents, representatives etc.) shall continue to have all rights as shareholders and director on the Board, as set out in the Articles of Association of the Company and other agreements entered into by the Company. Subject to the conditions set out herein, Mr. Lalit Kumar Jain with effect from the date of this resolution, shall not be liable for: (i) maintenance of customer relationships or customer communications in relation to the Project; (ii) delays in the Project; or (iii) any workmen related or other accidents on the site of the Project." "RESOLVED FURTHER THAT it be taken on record that the debenture holders shal....
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....ively for the Company, unless otherwise agreed as above or by KUDL and the Series A Debenture Holders of the Company in writing; (ii) all of the personnel/ employees will be given new email addresses, visiting cards, etc., by the Company having no reference to KUL and, or, KUL group of companies. It is clearly agreed that the Company is a subsidiary of KUDL. It is clarified that in line with the matters set out herein, this arrangement will not take away the rights available to KUDL, set out in the articles/ agreements in any manner. Further, any employee of the Company or nominees of the debenture holders shall not defame KUDL or Lalit Kumar Jain or other group companies of KUDL. KUDL shall be entitled to name the Project as its project in all corporate and marketing material and also direct customers to the sales team of the Company. Similarly, no employees or representatives of the Company, or of KUDL or KUL group of companies shall defame Ammon Holdings Pte. Ltd. and, or, their affiliates or their representatives." "RESOLVED FURTHER THAT, approval is hereby granted that the management of the entire finances and accounts of the Company (including the Project) and all record....
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....os. 1965-1966 of 2014 decided on January 08, 2019. In the said order the Hon'ble Supreme Court reiterated the bar under Section 430 of the Companies Act, however what is required to be seen is whether the relief sought in the present application arises from a dispute between the parties which would be amenable to the jurisdiction of the Tribunal or the Appellate Tribunal under the Companies Act so as to oust the jurisdiction of the civil Court. Learned counsel for the plaintiffs has adverted to Section 241 of the Companies Act stating that in case oppression is alleged in regard to management of the affairs of the company, then the remedy lies under Section 241 Companies Act and the present application would not be maintainable under Section 430 of the Companies Act. 35. Section 241 of the Companies Act provides the remedy to any members of the company who complains that the affairs of the company has been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company. 36. As held by the 7 Judge Bench of the Supreme Court in AIR 1965 SC 1942....
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....res being the principal sum of the Series A Debentures and Rs.30 crores being the principal sum of Series C Debentures along with the interest thereon, which amounts to Rs.250 crores and Rs.8,30,00,000/- approximately at the time of filing of the suit; decree of permanent injunction restraining defendants No.1 and 2 from selling, alienating, disposing of or transferring their movable or immovable assets, shares, etc., injunction against defendant No.1 and 2 restraining them from taking any step adversely affecting their net worth etc. Thus the relief sought in the present suit by the plaintiffs is recovery of money with interest, invested by plaintiff No.2 in defendant No.4, enforcement of its right to recover from defendants No.1 and 2 who executed personal guarantee and restrain the transfer or attempt to transfer any pledged shares of defendant No.4. It is in this suit that the applicants have filed the present application seeking a mandatory injunction against the plaintiffs seeking their approval in terms of clause 15.14.1(iii) of the Articles of Association which mandates consent of plaintiff No.2 for obtaining secured and unsecured finances/lending facilities by defendant No....
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....omplained of is ultra vires the company; (ii) where the act complained of is a fraud on the minority; or (iii) when there is an absolute necessity to waive the rule in order that there may not be a denial of justice. 45. As per the applicants, the act of plaintiffs in declining to accede to the request of the defendant Nos.1 and 3 for deposit of a sum of Rs.4 crores by defendant No.4 by creating a charge on its properties, which it could have done only with the approval of the plaintiffs, though not an act complained of as ultra vires the company or an act of fraud on minority but would fall in the category of absolute necessity to waive the rule in order that there may not be a denial of justice. The applicants have pleaded that in case the sum of Rs.4 crores is not deposited by 15th June, 2020 by creating charge on the flats of the defendant No.4, the defendant No.4 company, would suffer an irreparable loss. Thus this Court has no hesitation in holding that the defendant No.3 as the 99% shareholder of defendant No.4 due to the necessity pleaded in the application in the interest of defendant No.4 can file the present application in the representative capacity. 46. As regards th....
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....e power by virtue of Order 39 Rule 2 of the CPC to issue temporary injunction in a mandatory form and differed from Beaman's view accepting the view in Champsey Bhimji & Co. v. Jamna Flour Mills Co. (supra). In Israil v. Shamser Rahman MANU/MH/0046/1914, it was held that the High Court was competent to issue an interim injunction in a mandatory form. It was further held in this case that in granting an interim injunction what the Court had to determine was whether there was a fair and substantial question to be decided as to what the rights of the parties were and whether the nature and difficulty of the questions was such that it was proper that the injunction should be granted until the time for deciding them should arrive. It was further held that the Court should consider as to where the balance of convenience lie and whether it is desirable that the status quo should be maintained. While accepting that it is not possible to say that in no circumstances will the Courts in India have any jurisdiction to issue an ad interim injunction of a mandatory character, in Nandan Pictures Ltd. v. Art. Pictures Ltd. and Ors.} MANU/WB/0126/1956: AIR 1956 Cal 428 a Division Bench was of t....
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....some cases, but only in cases where the defendants claim to relief arises out of the plaintiff's cause of action, or is incidental to it." [Emphasis supplied] 49. From the decisions qua the grant of mandatory injunction noted above the following principles emerge i.e., firstly, the relief of mandatory injunction sought as an interim injunction should be capable of being granted as a final relief, secondly, the applicants should have a strong case for trial which is a standard higher than the prima facie case, thirdly the mandatory injunction at an interlocutory stage is required to be granted only to restore the status-quo ante and not to establish a new state of things differing from the state which existed on the date when the suit was instituted and fourthly, if the defendants seek a mandatory injunction without filing a counter claim, the said relief must arise out of the plaintiffs' cause of action or the reliefs incidental thereto. 50. Applicants in the present application are defendant No.1 and 3 in the suit who are acting in representative capacity of defendant No.4. As noted above, the present suit has been filed by the plaintiffs for recovery of a sum of Rs.448,75....
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....e Civil Court but are in no way incidental to the reliefs sought by the plaintiff in the present suit. Hence this Court finds no ground to grant the reliefs of mandatory injunction as prayed by the applicants/defendant Nos.1 and 3 under Order XXXIX Rule 1(a) CPC. 52. Learned counsel for the applicants vehemently states that even if not under Order XXXIX Rule 1(a) CPC this Court to meet the ends of justice and in the exigencies of the situation which is emergent, failing which there will be serious financial loss to defendant No.4, claims exercise of jurisdiction of this Court under Section 151 CPC and in equity. 53. Challenging the plea of equity learned counsel for the plaintiffs states that the express terms of contract cannot be ignored on a vague plea of equity and as noted above relies upon the decisions of the Supreme Court in Energy Watchdog (supra) further followed in M/s Halliburton Offshore Services (supra). Learned counsel for the plaintiffs contends that as per the express terms of the contract the plaintiff No.2 is a secured creditor of defendant No.4 and the claim of POSCO at best is of an unsecured creditor thus cannot be over and above the claim of the plaintiffs.....
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....efendant Nos. 1 to 4 with a third party cannot change the status of the plaintiff No.2 from an investor to a partner in a joint venture. Further by virtue of clause 16.6 of the DSA dated 5th December, 2014 as reproduced in para 30 above, all the earlier agreement including the share subscription agreement dated 26th July, 2014 relied upon by learned counsel for the applicants stood rescinded. 56. Considering the competing rights of secured creditors vis-a-vis unsecured creditors of a company, Supreme Court in the decision reported as 2019 (16) SCALE 319 Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta & Ors., held as follows: "47. The impugned NCLAT judgment has applied an equality principle down the board stating that whether creditors are secured or unsecured, financial or operational, equitable treatment demands that they all be treated as one group of creditors similarly situate, as a result of which no differences can be made in terms of the amount of debt to be repaid to them based on whether they are secured or unsecured, and whether they are financial or operational creditors. The aforesaid judgment relies upon certain paragraphs of this Court&#....
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....or creditors who can be persuaded to receive different treatment from the general class of unsecured creditors, where that treatment may be necessary to make the plan feasible. Classification can, however, increase the complexity and costs of the insolvency proceedings, depending upon how many different classes are identified. An alternative, to ensure that creditors who should receive special treatment are not oppressed by the majority, may be to give those groups the opportunity to challenge the decision of the majority in court if they have not been treated in a fair and equitable manner. The fact that such a facility exists may operate to discourage majorities from making proposals that would unfairly disadvantage priority creditors. x x x x x 58. Quite clearly, secured and unsecured financial creditors are differentiated when it comes to amounts to be paid under a resolution plan, together with what dissenting-secured or unsecured financial creditors are to be paid. And, most importantly, operational creditors are separately viewed from these secured and unsecured financial creditors in S. No. 5 of paragraph 7 of statutory Form H. Thus, it can be seen that the Code and ....
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....it has been agreed that any action of defendant No.4 has to be by approval of the plaintiffs and due to this covenant the defendant Nos.1 and 3 seek approval of the plaintiffs to create a charge on the properties i.e. three flats of defendant No.4 to raise a further sum of Rs.4 crores besides Rs.1 crore already paid from the accounts of defendant No.4. In this regard this Court made queries from learned counsel for the defendants/applicants as to the total flats partly constructed in the project as only one model flat is ready and rest of the construction is incomplete. Learned counsel for the applicants fairly states that in the project four towers were required to be constructed and presently 11 floors in two towers, that is, C-1 and C-2 have only been constructed. Further these 11 floors are also with the basic structure wherein the walls only have been erected and thus major portion of the construction remains to be carried out. On further queries, learned counsel for the applicants also pointed out that out of 55 partly constructed flats in C-1 tower 21 flats have already been sold and in the 65 partly constructed flats in C-2 tower 40 flats have already been sold from which a....
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....and discussions between the parties including the Debenture Subscription Agreement dated 26th July, 2014. Further the term of this term sheet had already expired as the same was for 180 days. Hence the plea of the applicants that the plaintiffs not being mere lenders but partners in the joint venture were required to agree to creating a charge on the property of defendant No4 cannot be accepted. 62. This Court specifically put to learned counsel for the applicants/defendant Nos.1 and 3 as to why the defendant No.3 has not deposited the sum of Rs.4 crores from its accounts or by creating a charge on any of its properties subject to the interim injunction passed by this Court whereby 25% was required to be kept in a no lien account with and no further permission was required as defendant No.3 was a 99% shareholder of defendant No.4 and was purportedly acting in the best interest of defendant No.4 by filing the present derivative application. Learned counsel for the applicants in response stated that the liability in respect of the award in favour of POSCO was of defendant No.4, thus defendant No.3 was not required to deposit any amount from its own accounts or by creating a charge o....