Shampa Sarkar, J. - (1.) The Court : This is an application under Section 9 of the Arbitration and Conciliation Act, 1996. The petitioners pray for an urgent inter relief against the respondent no. 1 who have allegedly converted and transferred valuable securities pledged by the petitioners with the respondent no. 1 to secure a loan availed by the respondent no. 2, in spite of the fact that the respondent no. 2 had repaid the entire loan amount along with interest. The facts are that the respondent no. 2 had taken a loan of Rs.112 crores from the respondent no.1. In order to secure the loan, the petitioners nos. 1 and 2 had pledged shares belonging to them in the respondent no. 2 and also another company called Scavo Steel Private Limited. Separate pledge agreements were executed. According to the petitioner, the respondent no. 2 repaid the entire loan amount within March 20, 2020 along with the interest. According to the petitioners instead of returning the shares the respondent No.1 invoked the pledge and transferred the shares to their own name.
(2.) Mr. Rohatgi, learned senior counsel appearing on behalf of the petitioners submits that in July, 2020 the respondent no. 1 was informed about the repayment of loan and demands were made for return of the shares pledged. He points out to a letter dated 15th July, 2020 and a chart contained therein written by Transform Steel Private Company to the respondent no. 1 which records the date of payment of the loan and also records the claim for issuance of the 'No Dues Certificate' and also release of the securities. Mr. Rohatgi submits that instead of responding to the said request the respondent no. 1 by a letter dated September 18, 2020 avoided the question of repayment of the loan and release of the securities and insisted on entering into an equity transaction on the basis of whatsapp messages and also on the basis of a Binding Term Sheet. He submits that the Binding Term Sheet was a document in which there was an agreement for transferring of 26%, 19.50% and a further 26% equity shares in different companies in favour of the respondent no. 1, but the said Binding Term Sheet was never acted upon and the Term Sheet provided that the same should be executed not later than November 30, 2018. According to Mr. Rohatgi this Binding Term Sheet was not a part of the loan agreement entered into between the parties at a later stage. He further submits that fraudulently these shares have been transferred by the respondent no. 1 to its own name by invocation of the pledge securities. He refers to the agreement of pledge and submits that the said loan agreement was entered into on February 28, 2019, subsequent, to the Binding Term Sheet which was never acted upon and as a security to the said loan given by the respondent no. 1 to the respondent no. 2, these shares held by the petitioners to the respondent no. 2 company were pledged. Once the loan agreement had come to an end upon the repayment of the entire loan amount with interest, Mr. Rohatgi submits that these shares should be returned to the petitioners. He prays for an order restraining the respondents from dealing with the shares in any manner whatsoever and exercising any rights out of the said shares.
(3.) Mr. Mookherji, learned senior counsel appearing on behalf of the respondents submits that the application before this Court were not maintainable as the dispute being a commercial dispute, the provision of Section 10 and Section 16 of the Commercial Courts Act, 2015 would be required to be followed by the petitioners. He refers to the definition of 'commercial dispute' and submits that as the dispute relates to financial agreements, the same fell within the category of a commercial dispute under Section 2 (1)(c)(i) of the Commercial Courts Act, 2015. According to him, the affidavit should have been in the form as prescribed in the Appendix and without the required statements, the application could not be entertained. He next submits that the application has been filed by suppressing material facts. He hands up some whatsapp messages before this Court in support of his contention that the parties had agreed over a period of time for transferring some of the equity shares in the name of the respondent no. 1 and on the basis of such messages and on the clauses of the Binding Term Sheet, the respondent no. 1 had not returned the shares and had transferred the same in its name.;