Research › Search › Judgment

Madras High Court · body

2015 DIGILAW 1538 (MAD)

R. Vijaykumar v. Punjab National Bank

2015-03-19

R.SUBBIAH

body2015
Judgment :- 1. This Original Application coming on this day before this Court for hearing the court made following order: This Application has been filed seeking interim injunction, restraining the first respondent/first defendant Bank from alienating the pledged shares of the applicants/plaintiffs. 2. The first and second applicants/plaintiffs are Directors and major shareholders of M/s. Gemini Communication Ltd. and the third applicant/plaintiff is a shareholder in M/s. Gemini Communication Ltd. According to the applicants/plaintiffs the company has a market capitalization of about INR 260 crores and a turnover of about INR 310 crores. According to the applicants/plaintiffs, the company is a market leader in wireless space in India for field operation services and holds major market share with leading telecom service providers. 3. It is stated in the affidavit filed in support of this application that they were awarded a prestigious project for supply, installation, commissioning and maintenance support of Wave-2 certified WiMAX in Phase II of the overall project. Hence they approached the first respondent/first defendant Bank for credit facilities. After thorough review of the finance of the Company and studying the contract from BSNL in depth, the first respondent/first defendant-Bank agreed to provide the requisite funding subject to the provision of various securities. One of the collateral securities demanded for providing working capital facilities was a pledge of the shares held by the plaintiffs in the company. 4. According to the applicants/plaintiffs, the following are the shares they pledged with the first respondent/first defendant Bank for raising the fund for execution of the BSNL project. S.No. No.of shares Name of the Bank Shares pledged by 1. 23,84,705 PNB Vijay Kumar (1st applicant/plaintiff) 2. 5,57,523 PNB Ram Kumar (2nd applicant/plaintiff) 3. 33,19,400 PNB Radhika Vijay Kumar (3rd applicant/plaintiff 5. Learned counsel appearing for the applicants/plaintiffs submitted that the first respondent/first defendant Bank initiated proceedings before the Debts Recovery Tribunal-II, Chennai seeking the relief of selling the pledged shares. It is further submitted that though the Debts Recovery Tribunal did not give any relief as prayed for the first respondent/first defendant-Bank, they have proceeded to sell the pledged shares of the applicants/plaintiffs in violation of Section 176 of the Indian Contract Act, 1872. 6. It is further submitted that though the Debts Recovery Tribunal did not give any relief as prayed for the first respondent/first defendant-Bank, they have proceeded to sell the pledged shares of the applicants/plaintiffs in violation of Section 176 of the Indian Contract Act, 1872. 6. Learned counsel for the applicants/plaintiffs would further submit that the act of the first respondent/first defendant Bank is in contravention of Section 176 of the Indian Contract Act, 1872 and in the instant case, they have not even issued any notice to the applicants/plaintiffs before selling their shares. He also relied upon the judgment of the Allahabad High Court in the case of Prabhat Bank Ltd., and Another vs. Babu Ram. 7. Keeping the submission made by the learned counsel for the applicants and on perusal of the affidavit filed in support of the above application, I find prima facie case in favour of the applicants/plaintiffs. Hence, there shall be an order of interim injunction for a period of two weeks. Notice to the respondents returnable in two weeks. The applicants shall comply with Order 39 Rule 3 C.P.C. Notice to the respondents returnable by then. Post after two weeks.