TaxTMI 
TaxTMI 
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2022 (6) TMI 1188
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....ata, Senior Advocate, with Mr Venkatesh Dhond, Senior Advocate, and Shyam Kapadia, Indranil Deshmukh, Gathi Prakash, Nidhi Asher, Arushi Pddar & Priyanka Desai, i/b Cyril Amarchand Mangaldas For respondent no.3 ("Dish TV") : Mr Aspi Chinoy, Senior Advocate, with Zal Andhyarujina, Senior Advocate, and Rugved More, Maithili Parekh, Tanya Mehta & Vaibhavi Bhalerao For respondents nos. 4 to 9 : Mr Sayeed Mulani. ORAL JUDGMENT (Per GS Patel J):- 1. The original Plaintiff is in appeal against an order of 17th June 2022 of a learned Single Judge of this Court, AK Menon J, declining, in his discretion, to grant ad-interim relief in the Plaintiff's Interim Application (L) No. 17730 of 2022. The impugned order is a speaking order (notwithstanding that the Plaintiff assails it for insufficiency of reasons). Menon J's exercise of discretion in refusing relief is important in view of the decision of the Supreme Court in Wander Limited And Another v Antox India Private Limited. 1990 (Supp) SCC 727. In paragraph 14, the Supreme Court said: "14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the Appellate Court will not int....
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....enable. The reasons that weighed with the learned trial Judge, as already noticed, according to us, do not indicate that the view taken is not a possible view. The appellate court, therefore, should not have substituted its views in the matter merely on the ground that in its opinion the facts of the case call for a different conclusion. Such an exercise is not the correct parameter for exercise of jurisdiction while hearing an appeal against a discretionary order. While we must not be understood to have said that the appellate court was wrong in its conclusions what is sought to be emphasised is that as long as the view of the trial court was a possible view the appellate court should not have interfered with the same following the virtually settled principles of law in this regard as laid down by this Court in Wander Ltd. v. Antox India (P) Ltd. [1990 Supp SCC 727] (Emphasis added) 4. It is also well settled that when considering an application for interim relief, a Single Judge is not expected and is in fact not permitted to conduct mini-trial. It is the prima facie case that is to be assessed. SM Dyechem Ltd v Cadbury India Ltd, (2000) 5 SCC 573; Anand Prasad Agarwalla v Tark....
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....eal before us, represented by Mr Seervai. Before the learned Single Judge, he would undoubtedly have had to show that all three well-established ingredients or components for ad-interim relief were met: a strong prima facie case, that the balance of convenience favours the Plaintiff, and demonstrating irretrievable prejudice if relief was denied. Once that discretion was exercised at the ad-interim stage by the learned single Judge, in appeal, the burden on Mr Seervai is much heavier following the Wander v Antox principle. For Mr Seervai must now show that, despite that long-understanding principle of law, we must exercise our discretion and must grant the ad-interim relief refused by the learned Single Judge. This requires Mr Seervai to now make out an overwhelming prima facie case. It is not enough for him to merely demonstrate that a view and conclusion different from that of the learned Single Judge is possible, but to show that the relief he seeks is the only possible view, that the impugned order is not even remotely plausible, and therefore the learned single Judge fell into error. As we shall presently see, and for the reasons that follow, despite a day-long hearing, we are....
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...."). party D. The repayment of this loan was secured by a pledge of shares held by World Crest in Dish TV. These shares are all in what is called demat form. There are no physical shares. The shares are lodged with one of the depositories, viz., National Securities Depositories Ltd ("NSDL") or the Central Securities Depositories Ltd ("CSDL"). The pledge in question is created in favour of a security trustee, Catalyst. YBL is not a party to the pledge document, although it fits the definition of a 'lender' in the pledge document. The document or contract of pledge specifically permitted Catalyst as the pledgee to transfer the pledged shares to itself. This it could do only if there is an event of default as defined in the pledge deed. There was an event of default. Catalyst transferred the pledged Dish TV shares to itself. It got its name noted as the 'beneficial owner' as required by law (and Regulation 58(8)) with the depository in question, NSDL, where the shares are held in demat form. Catalyst then further transferred the shares to YBL or constituted YBL as its nominee; at any rate, it was YBL that exercised rights arising from those shares. One of the central questions that ari....
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....YBL would have it that this formulation is incorrect and has never been the position in law. Once Catalyst, as the pledgee, is shown as the beneficial owner of the shares, it exercises all rights as a shareholder of Dish TV. Indeed, once this change happens, only Catalyst can exercise those rights. There is no concept of a 'beneficial owner with restricted rights' for the purposes of the Companies Act, 2013 or any other law relating to shares and shareholdings. It the other way around: none except the beneficial owner can exercise those rights. Once World Crest ceases to be recorded as the beneficial owner, it cannot continue to exercise its rights as a beneficial owner. There is nothing in the Contract Act or in PTC India to suggest that there is such a restriction on the rights of the beneficial owner. He also submits that there is no prohibition in either the Contract Act or PTC India that prevents the parties from entering into a contract (or restricting the rights of the World Crest and Catalyst to enter into a contract) that permits a transfer by Catalyst of the shares - but without affecting a sale-toself. He accepts that a pledgee cannot sell the pledged security to itself.....
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....rict Court in Delhi at the instance of Defendants Nos. 4 to 9. These Defendants assailed show-cause notices issued by YBL to declare some of the borrowers as wilful defaulters under the relevant RBI Master Circular. The borrowers also sought a declaration that the invocation of the pledge was bad in law. This was the first attempt by the borrowers to stall the pledge. Ultimately, these proceedings were withdrawn after the long gap of nine months on 3rd August 2021, during which a restraint operated against YBL. 18. We pass over certain intermediate events. In April 2021, there appears to have been some settlement proposal, but that need not detain us today. On 7th August 2021, Catalyst transferred 24.19% of the shares in Dish TV i.e. the pledged shares, to YBL. On 12th August 2021, Dish TV issued notice of its Annual General Meeting to be held on 27th September 2021. YBL, claiming entitlement as a transferee or nominee of the pledged Dish TV shares from Catalyst, issued notices on 4th September 2021 under Sections 160 and 169 of the Companies Act 2013 demanding the appointment of certain directors to Dish TV's board. A few weeks later, on 21st September 2021, YBL issued notice und....
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....g to World Crest in respect of the said shares in the upcoming Annual General Meeting scheduled to be held on 30th December 2021". 23. As we shall immediately see, this is really the heart of the dispute, for World Crest claims that notwithstanding the invocation of the pledge; notwithstanding the transfer by Catalyst of the pledged shares to its own name; and even assuming that this was permissible, notwithstanding the second transfer by Catalyst to YBL, only World Crest could exercise general property dominion over and in respect of those shares. This includes all rights associated with that shareholding; in particular, the voting rights in relation to the pledged shares. 24. The reply to this from Dish TV is important for two reasons. The first reason is what Dish TV said in immediate answer. The second is the complete U-turn that Dish TV now takes before us today. Dish TV's reply to World Crest is of 12th December 2021[7]. It said, inter alia- "In this connection, we would like to inform you that Dish TV India Limited ("the Company") is following the due process in respect of the proposed Annual General Meeting scheduled to be held on December 30, 2021. As per the defined ....
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....Crest as a shareholder. Next comes a prayer for a declaration that Dish TV's recognition of YBL as the "registered holder/owner" of the shares is bad in law. Thus, what World Crest contends in these original prayers is that as a pledgee of the Dish TV shares, although Catalyst would transfer the shares to its name, it could do so only for the purposes of safeguarding or securing those shares for implementation of its rights as a pledgee and for no other purpose. As Mr Seervai and Mr Chinoy urge today, even if there is a transfer to Catalyst as a beneficial owner and we will shortly see what this means, that transfer is only to ensure that the shares are safe until they are put to sale by Catalyst to a third party or until Catalyst files a recovery action. Under no circumstances as a pledgee can Catalyst sell the shares to itself. That is forbidden by the law relating to pledges. Important in all of this, according to them, are the rights of World Crest as the pledgor. An overriding right or entitlement of World Crest, as the pledgor, is to seek redemption. If, in the meantime, Catalyst further transfers the shares, or itself or through its transferee or nominee, purports to exercis....
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....erim Application No. 121 of 2022 (the Dish TV's Interim Application) inter alia seeking that it be permitted not to disclose the outcome of the Annual General Meeting on the ground that this might 'adversely affect' the hearing of World Crest's main Interim Application. YBL replied to this Interim Application. It is still pending though it may well be infructuous by now. 30. On 17th February 2022, World Crest filed an Interim Application (L) No. 4788 of 2022. In this, it again sought a restraint against YBL from transferring, selling, acting upon, using or exercising any rights in respect of the pledged Dish TV's shares. It also sought a restraint against both Catalyst and YBL from exercising any rights in respect of these shares. Then it sought an injunction against YBL from interfering or seeking to participate in the management of Dish TV. Finally, it asked for a disclosure of YBL's complaint to the EOW. 31. The order that came to be passed on Interim Application (L) No. 4788 of 2022 is important.[10] It features quite prominently in the impugned order.[11] "1. By the Interim Application No. 376 of 2022 the applicants seek a direction to defendant no. 3 to declare results of....
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....wing order: (i) Interim Application(L) No. 4788 of 2022 is taken on board and disposed as infructuous without prejudice to the Applicant's right, if any, to seek review of order dated 23rd December, 2021. (ii) List on 24th February, 2022." (Emphasis added) 32. A few days later, on 22nd February 2022, World Crest did in fact file a Review Petition (L) No. 5303 of 2022 in its main Interim Application seeking a review of the 23rd December 2021 order (the one that said that the 30th December 2021 Annual General Meeting would be subject to the outcome or abide by the order in World Crest's main Interim Application). World Crest mentioned the Review Petition twice seeking an urgent listing. The Court declined, saying there was no urgency. 33. World Crest then sought an amendment of the Plaint. This was allowed. 34. We are passing over certain parallel proceedings in other applications. In April 2022, World Crest filed yet another Interim Application (L) No. 1315 of 2022 for production of YBL's EOW complaint of with all annexures and particulars. 35. For its part, Catalyst has filed Interim Application (L) No. 17490 of 2022 seeking a return of the Plaint. That Interim Application....
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....ond then appearing for YBL pointed out the amount that was due and said this was yet another attempt to prevent the YBL's participation at the ensuing meeting. The submission on behalf of the Catalyst then and now before us was that YBL had no right whatsoever to vote. The transfer by Catalyst to YBL was illegal. Catalyst had unlawfully parted with custody of the pledged security. There appears to be some error in the wording of paragraph 7 because the reference there is to Clause 5 of the Pledge Deed. That clause, as we shall see when we examine the provisions of the Pledge Deed, relates to the rights of the pledgor before the event of default and not rights of the pledgee. Then Menon J noted that there was a serious dispute as to whether YBL was a nominee or a transferee. World Crest argued that YBL was never a pledgee. It was not even a party to the Pledge Deed. There was no way in law for YBL to exercise any rights let alone any proprietary rights or rights as a beneficial owner over the pledged suit shares. In paragraphs 10 and 11, Menon J noted the submissions canvassed on behalf of the YBL. Finally, in paragraph 13, Menon J said that Interim Application (L) No. 4788 of 2022 ....
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.... of the pledged shares to itself? Mr Seervai's response was to say that the transfer to Catalyst was not per se challenged by World Crest but, in his submission, that transfer allowed Catalyst only to hold the shares until they were sold to a third party or until Catalyst filed a recovery suit. He clarified this to mean that under no circumstances on account of the transfer could Catalyst become the true or full "owner" of the shares such that it exercise dominion over them. It could not exercise plenary rights such as voting or further transferring those shares. He maintained in clarification that World Crest disputed, as a necessary corollary of this formulation, Catalyst's right, power or authority to transfer the shares to YBL or, in any shape, fashion or form, to confer any downstream rights in respect of and over the pledged shares of YBL. It made no difference whether YBL was said to be a nominee or a transferee. Catalyst simply could not bring YBL into play to give it any rights in respect of these shares. 43. This takes us to the Pledge Deed. There are two pledge deeds (because there are different borrowers). All have concentrated on one, agreeing that there is no differe....
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....ion therewith or accruing thereto and proceeds arising therefrom for the time being and from time to time, any distributions received/ to be received and moneys, including but not limited to interests, dividends, income and revenue therefrom" "Security Asset" means any or all of: (a) the Pledgor's DP Accounts; (b) the Securities; (c) instruments, records, forms, confirmations, consents, approvals, agreements, writings, powers of attorney, deeds and documents relating to the Pledgor's DP Accounts and the Securities together with all rights in connection therewith or accruing thereto and proceeds arising therefrom from time to time and any securities and monies derived from such Securities, including but not limited to: (i) dividends paid or payable in cash and other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for any of the Securities. (ii) dividends and other distributions paid or payable in cash in respect of or in connection with any liquidation or dissolution or in connection with a reduction of the share capital of the Company; and (iii) cash paid, payable or otherwise dis....
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....resenting the Securities, to the Pledgee with such rankings as detailed in Schedule III hereto; (c) pledges, assigns, transfers, hypothecates and charges to the Pledgee, as a continuing security interest, all of its benefits, allotments, powers, authorities, claims and demands whatsoever in, to under or in respect of the Securities and any indemnity, warranty or guarantee payable by reason of loss to or otherwise with respect to any of the Securities; (d) pledges and agrees to charge to the Pledgee with such rankings as detailed in Schedule III hereto all dividends and other distributions, income, cash flows, revenue, profits, payments and other property due, accruing or owing to, to be turned over to or to be disbursed to, such Pledgor after the date of this Deed with respect to any of the Securities (including by way of redemption, bonus, preference or option or in situation or by way of conversion, distribution or exchange for or otherwise derived from, any of the Securities, but excluding any distributions and other payments permitted to be paid to the Pledgor(s) pursuant to and in accordance with the (Transaction Documents); and (e) pledges and agrees to charge to the Pl....
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....ents. Therefore, this clause clearly spells out who could act on the pledged shares before an Event of Default. 48. The mirror image, as it were, of Clause 5 is to be found in Clause 7, the contentious clause. Clauses 7 and 7.1 (we are not concerned with the rest) read thus: "7. EVENTS OF DEFAULT AND ENFORCEMENT OF SECURITY 7.1 Enforcement of Security If any Event of Default occurs and is continuing, the Pledgee shall be entitled to enforce the security created pursuant to this Deed and to exercise immediately or as and when it may deem fit and without any further consent, notice of any kind (other than as contemplated by paragraph (c) below, demand or authority on the part of the Pledgor(s), any and every power possessed by the Pledgee by virtue of this Dees, other Transaction Documents and available to a secured creditor (in the name of the pledgor(s) or otherwise) under Law, and in particular (but without limitation), the Pledgee shall have the power to. (a) enforce all or any part of the security interest created by this Deed and take possession of or dispose of all or any of the Security Assets in any manner permitted by Law upon such terms as the Pledgee determines; ....
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.... the Pledgee may require for exercising such voting (including but not limited to e-voting) and other rights as are granted by this Deed and/or available under any applicable Law/regulation. (h) exercise all rights under the applicable Law including the right envisaged under section 176 of the Indian Contract Act, 1872 as amended from time to time. (j) execute and do all such acts, deeds and things as the Pledgee may consider being necessary or appropriate for or in connection with any of the above purpose." (Emphasis added) 49. On the face of it, Clause 7 begins to operate only once there is an Event of Default. It continues so long as the Event of Default continues, i.e., until the default is cured. Given that this is a question of a pledge there are only two ways in which the curing of a default can happen: either by redemption by the pledgor or by a sale to the third party. (We leave aside the so-called 'third' route, of Catalyst filing a recovery suit, because even there the pledgor would be required to make payment to retrieve the pledged shares). But what is to happen in the meantime is the question. 50. Two clauses are of particular importance, 7.1(c) and 7.1(g). Alt....
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.... therefore, conversion. This is forbidden. In other words, without actually formally putting the pledged shares to sale, by the device of a mere transfer, Catalyst sought to constitute YBL as a full-spectrum owner of the pledged shares. This, in his submission, it could not do. (g) Thus, in his formulation, YBL is a totally illegal transferee of the pledged shares. It has no rights under the Pledge Deed. (h) Finally, this entire action of Catalyst and YBL in purporting to vest YBL with the complete envelope of ownership rights in respect of the pledged shares is directly contrary to the Supreme Court decision in PTC India. 53. We come now to that decision. Both sides have read this at such length to us that we would probably be required to reproduce the whole of it as part of this judgment. Evidently, that is unworkable. We will endeavour, instead, as best we can to draw out the emergent principles. As we noted at head of this judgment, the Supreme Court had before it a question arising under Regulation 58. The law on pledges under Sections 176 and 177 has long been settled including, authoritatively by the exposition by Chagla CJ in the Division Bench judgement of this Court ....
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....st the pawnor upon the debt or promise, and retain the goods pledge as a collateral security; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale. If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor. Section 177. Defaulting pawnor's right to redeem. If a time is stipulated for the payment of the debt, of performance of the promise, for which the pledge is made, and the pawnor makes default in payment of the debt or performance of the promise at the stipulated time, he may redeem the goods pledged at any subsequent time before the actual sale of them; but he must, in that case, pay, in addition, any expenses which have arisen from his default. (Emphasis added) 56. When there is a default by the pledgor, i.e., the pledgor does not fulfil his promise to pay the debt, the pledgee has the right (but not an obligation) to sue on the date and to continue retention of the pledged goods as a collateral security and also the right to sell the goods bu....
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....ntrary". The notice, that is to be given for the intended sale by the pawnee, is a special protection that the statute has given to the pawnor, and the parties cannot agree that the pawnee may sell the pledged goods without notice to the pledgor. Dwelling on the aspect of the pawnor's right of redemption under Section 177, the judge held that the right remains till the 'actual sale' of the pledged goods. The expression 'actual sale' in Section 177 must be a sale in conformity with the provisions of Section 176 which gives the pledgee the right to sell; and if the sale is not in conformity with those provisions, then the equity of redemption with the pledgor is not extinguished. 48. The sale by the pawnee to himself being void does not put an end to the pledge, but the pawnor is bound by resale(s) duly effected by the pawnee to the third parties after such abortive sales to himself. 49. Chagla J. on the rights of the pawnee held that the Contract Act provides two rights to the pawnee when the pawnor makes a default in payment of the debt : (a) bring the suit against the pawnor for the debt and retain the goods pledged as collateral security; and (b) sell the goods pledged, w....
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....fore, said that where the Contract Act says a particular term or provision is binding, that is the mandate of the statute. It must be followed by the parties. Neither party can contract out of it. Otherwise, the legislative imperative would be violated by merely incorporating a term of waiver and this would deprive the weaker party of the benefit of the legal protection. It is a rule of public policy, for the requirement of reasonable notice is to protect and benefit the public. Yet there is a difference between a statutory provision meant for the benefit of a person and one that requires a contract to be in a particular manner. A statutory obligation cannot be waived where the statute restrains explicitly, or mandates explicitly, that parties must contract in a particular manner. Where a statute prescribes a form, it must be followed. Even if there is a general autonomy to contract, that autonomy does not permit parties to enter into an agreement contrary to express provisions of the law. 59. At this point, the Supreme Court considered a decision of the Delhi High Court which disagreed with the view taken by Chagla J in Madholal Sindhu. This was considered at some length and the ....
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....n that there came to be established two central depositories, NSDL and CSDL. This introduced the concept of what is called the 'registered owner' - a perhaps infelicitous terms because it may have all kinds of unintended implications and suggestions. The registered owner is of necessity the depository i.e. NSDL or CSDL. All that this signals is that the demat shares in question are lodged with that particular depository. The depository itself is not the 'owner' in law, strictly speaking, of those demat shares. Then there is a Depository Participant or DP. Typically, this is an entity that is an intermediary between the investor and the depository. It is the DP that trades in the demat shares on behalf of the investor. The shares of the company may be listed on or more stock exchanges but when shares are bought and sold, they are required to be moved from one investor's account with his DP to the other investor's account with perhaps another DP. There is no physical transfer of shares simply because there is no longer a physical artefact of a share. 63. The right of ownership of a demat security (share) vests in what is known as the "beneficial owner". Every person or entity who or....
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....e in exercise of his Section 176 rights is possible without the pledgee being first noted as a 'beneficial owner'. As the Supreme Court put it: "to reiterate, this requirement of sub regulation (8) to Regulation (58) does not circumscribe or limit the contractual rights and obligations agreed upon between the parties on the agreed terms including the pawnee's right to sale the pawned goods". 66. In the same paragraph, the Supreme Court also said that the terms of the contract between pledgor and pledgee are not permitted to override the Contract Act as explained earlier and the requirement of compliance with Regulation 58(8). Parties cannot contract out of Regulation 58 any more than they can contract out of Sections 176 and 177. In other words, Regulation 58(8) was harmonized with the Contract Law on pledges in Sections 176 and 177. 67. Importantly, the Supreme Court explained that the object was to ensure compliance with the procedural requirements for sale of demat securities. Regulation 58(8) was not intended to interfere with the freedom to contract consistent with the Contract Act and other laws. Even if the pledged document violated Regulation 58(8), the pledge itself wo....
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.... it could only sell to a third party. In other words, the moment Catalyst exercised its rights under Regulations 58(8), and which right is to facilitate a sale of the pledged shares, Catalyst made an election in its capacity as a pledgee and took one of the two steps required to give effect to its rights as a pledgee, namely recording itself as a beneficial owner. What would then remain is the question of notice of proposed sale by Catalyst to a third party. Until that sale actually took place, World Crest had the right of redemption. 70. At this stage we believe it is important to reproduce paragraph 104 of PTC India: 104. PIFSL by the letter dated 23rd January 2018 had informed MHPL in terms of Clause 6.1 that there has been an occurrence of default, which has continued and, therefore, they, on 16th January 2018, in exercise of its right under Clause 6.1 of the pledge deed, have applied for transfer of the pledged shares in its name. Consequently, all the rights in the pledged shares, including but not limited to the right of attending general body meetings, voting rights, and rights to receive dividends and other distributions, now vests with them as per Clause 2.3(A)(ii)(b)9....
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....Court did not return a finding that the transfer of these voting rights, etc., was contrary to law, i.e. contrary to the Contract Act, the Depositories Act or Regulation 58(8). We do not think we can read such a finding into PTC India. 72. Mr Chinoy for Dish TV addressed us on a correct reading of the law. His submission was that neither under the pledge document nor in law could Catalyst as the pledgee act as the whole owner with full-envelope dispositive rights over the pledged securities. Regulation 58 introduces a concept of 'invocation', notably absent in Sections 176 and 177, but this was needed because without an invocation there is simply no occasion for a pledgee to call for a change in the depository's records to show the pledgee as the 'beneficial owner'. This change required by Regulation 58 is not a transfer of general property, he submits, but is only for the purposes of sale and is one of the two required stages (the other being reasonable notice). Viewed from any perspective, a nominee falls outside the frame of Regulation 58. To use the 'beneficial owner' change to further transact is illegal. YBL as a nominee gets no rights. 73. Mr Khambata for YBL first present....
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.... an unviable and thoroughly inequitable situation. The PTC India decision does not interpret Regulation 58(8) as being restrictive. It is only a necessary step to facilitate the sale - without it being operated, i.e. without the pledgee being first recorded as the beneficial owner in the depository's records, the next step of a sale to a third party (after reasonable notice) is not possible. A mere transfer by the pledgee to itself is not inconsistent with Sections 176 and 177. The pledgor's rights are intact until the sale. But, in the meantime, there is no restraint on exercising all powers as what we may call a "pledgee-transferee". 76. Mr Khambata also points out that the contract, i.e. the pledge document, contain an important negative covenant in clause 10.3, which reads:[20] 10.3 Negative Covenant by the Pledgor(s) During the currency of this Deed and/or Agreement, the Pledgor(s) shall not. (a) further pledge, sell, transfer or otherwise create any charges or other encumbrances or liabilities of any nature whatsoever or dispose off or deal with any of the securities without the prior written consent of the Pledgee and nor shall they, in any manner do or permit or caus....
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....ing to pledges. Clause 2.1 says that it preserves all rights under Section 176. Therefore, the parties knew exactly what they were about when they entered into the contract. PTC India restates long-standing law on pledges; it does not re-write it. PTC India's focus was, in fact, Regulation 58(8), and whether this created any new rights or obligations, and, specifically, whether it changed the law under Sections 176 and 177. The Supreme Court held that it did not. Therefore, the law on pledges is, even after PTC India, exactly as it stood before; as it stood at the date of the institution of the suit; and as it stood when the pledge agreement was entered it. There are no changed circumstances. Further, it is emphatically not shown that even in the pre-Regulation 58(8) period, a pledgor could not contract to give the pledgee voting rights in the pledged shares. No such prohibition is shown to us. 80. An interesting thought experiment might be to consider the situation as its stood before the era of the dematerialization at a time of physical securities when they were accompanied with blank transfer forms. If there was a power of such transfer, Mr Khambata argues, and it was effected....
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....y the terms of the bargain it struck. That is merely asking for the impossible. Catalyst cannot be compelled to sell. World Crest will not redeem. In the meantime Catalyst can do nothing. This, we are asked to believe, is an equitable approach that the learned Single Judge should have been mindful of at World Crest's instance. 84. In our view, on the equitable considerations, apart from the lakh of a prima facie case, and on the questions of balance of convenience and irretrievable prejudice, World Crest has made out no case whatsoever. 85. We find it impossible to fault the decision of the learned Single Judge. He correctly refused to exercise the discretion vested in him. So do we. 86. The Appeal has no merit. It deserves to be dismissed. It is. No costs. 87. In view of this, the Interim Application does not survive and is also disposed of. 88. Finally, we must make some note of the time frames given the evident urgency. We heard the matter for the entire day yesterday (22nd June 2022) until 5.00 pm. We said we would pronounce the judgment in Court today. We have done so from 10.30 am until about 1:30 pm. Meanwhile, though a member of the Bench (Madhav J Jamdar J) is indispo....