ADITYA KHAITAN Vs. IL AND FS FINANCIAL SERVICES

JUDGEMENT

(1.) The Court : This is an application under Sec. 9 of The Arbitration and Conciliation Act, 1996, in which the petitioners seek to restrain the respondent from selling or dealing with 1,61,29,000 Compulsorily Convertible Preference Shares (CCPS) of the petitioner No.3, McNally Bharat Engineering Company Ltd. which were subscribed by the Respondent on a private placement basis under agreements entered into between the parties herein. The dispute touches three agreements, namely, a Share Subscription and Shareholders' Agreement, an Option Agreement and two Pledge Agreements, all of which were executed on 27/3/2018. The trigger to the application is a notice dtd. 2/7/2020 issued by the respondent for invoking and selling the shares pledged to the Respondent.

(2.) By an order dtd. 30/7/2020, the respondent had been restrained from selling any further shares which form the subject matter of the notice of invocation dtd. 2/7/2020. The order was passed on the premise that the respondent had proceeded to sell the pledged shares and that the matter would be considered further after a complete disclosure of the relevant documents by the parties.

(3.) Since the parties have argued on the maintainability of the application, this issue is being considered first.