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Temporary relief for Zee as HC admits appeal against selling of shares
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SME Times News Bureau | 08 Jul, 2020
The Delhi High Court in an interim relief to Zee Entertainment
Enterprises Ltd stayed IDBI Trusteeship and Franklin Templeton from
selling or transferring the company's shares worth Rs 740 million, after
the court admitted an appeal filed by Zee.
A division bench of
the high court presided by Justices Rajiv Sahai Endlaw and Asha Menon
admitted the appeal challenging the order passed by the single judge
bench of the court. The orders were passed while the two judge bench was
hearing an application filed by Cyquator Media Services Pvt Ltd, the
holding company of Zee Entertainment.
Advocate Vijay Aggarwal had filed the plea seeking the stay on invoking pledge on the shares.
During
the course of hearing, senior advocate Neeraj Kishan Kaul argued that
the interim measure sought by Cyquator was denied in the order of the
single judge, following the statutory provisions which are unambiguous.
"Any
interference with the sale by the respondent no. 1 (IDBI Trusteeship
Services Ltd) of the pledged shares would affect the investors in the
mutual fund on a day to day basis and may also result in irreparable
injury inasmuch as if the price of the said shares were to fall, the
security created by way of pledge of the shares would cease to exist
and/or diminish," Kaul told the court.
The appellant through its
counsel advocate Vijay Aggarwal submitted that severe prejudice would be
caused to Cyquator if the shares of Zee Entertainment are sold in open
market during the present market conditions.
The court has now posted the matter for further hearing on July 13.
The plea filed by Cyquator has sought the setting aside of the single bench order of the high court passed on July 3.
It
also sought the court's directions to restrain IDBI Trusteeship
Services Ltd from invoking the pledge or acting upon it, including by
creating third party rights in the pledged shares for a period of six
weeks.
"The Impugned Order fails to appreciate that in the
present situation of COVID-19, all parties need to act fairly and
reasonably and it would be ex facie wrong to put the Appellant
(Cyquator) to prejudice alone when in fact a balanced outcome is
achievable by waiting for 4-6 weeks," the plea said.
It added
that the Impugned Order failed to consider that while there may have
been no urgency qua the invocation of the corporate guarantee, the
pledge invocation was imminent and as such relief ought to have been
granted at least vis-A-vis the Pledge Invocation Notice if not the
Corporate Guarantee Notice.
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