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Srei Infrastructure Finance Ltd. v/s Violet Arch Capital Advisors Pvt. Ltd & Others

    A.P. Nos. 1577 of 2013, G.A. No. 47 of 2014 (Original Side)
    Decided On, 13 January 2014
    At, High Court of Judicature at Calcutta
    For the Petitioner: Debashis Kundu, N. Chatterjee, R. Maity, Advocates. For the Respondents: Abhrajit Mitra, Jishnu Chowdhury, Saumavo Ghose, R2, R3, Mrs. Aindrila Biswas, Advocates.

Judgment Text
The petitioner entered into several agreements with the respondents on August 16, 2011 and August 30, 2011. The petitioner has shown that two agreements executed between the parties on August 16, 2011, termed as the loan agreement and as the hypothecation agreement, contain arbitration clauses of similar import. The petitioner apparently gave credit facilities of value of Rs.31 crore to the first respondent against hypothecation of all assets of the first respondent. The petitioner says that the petitioner is also entitled to appropriate orders against the respondent nos.2 and 3 since the respondent no.2 is the holding company of the respondent no.1 and the respondent no.3 is the son of the principal shareholders of the respondent no.2. The entire arrangement between the parties appears to have been for the first respondent to set up business asa merchant banker. A company under the control of close relatives of the third respondent was identified as the company that would undertake the merchant banking business. The petitioner was ultimately to acquire complete control of the merchant banker that the first respondent was proposed to be made into. The petitioner, however, says that the petitioner was not to be the controlling shareholder of the first respondent but the shares of the first respondent were to be held as escrow by the petitioner till such time the petitioner’s dues was cleared by the first respondent. It appears that the venture has failed and the third respondent has removed himself from the first respondent. The third respondent was contemplated to be the face of the first respondent and was engaged with a huge salary. The appearing parties say that the business did not take off and the third respondent has given up his claim on account of salary. The petitioner perceives that the amount lent and advanced to the first respondent cannot be recovered and seeks orders against the subsidiaries of the first respondent though, admittedly, the subsidiaries of the first respondent are neither parties to any of the agreements which are relied upon by the petitioner nor are the subsidiary companies parties to any arbitration agreement involving the petitioner.

The first respondent is not represented since its office is said to be closed. The second and third respondents claim that the first respondent is the alter ego of the petitioner since the Board of the first respondent is packed with nominees of the petitioner and the second respondent has no say in the Board of the first respondent notwithstanding the second respondent till now being the 80 per cent owner of the shares in the first respondent. Such position has been disputed by the petitioner. In view of the hypothecation agreement, the petitioner seems to be entitled to an order restraining the first respondent from receiving any payment due from any person without first discharging the dues of the petitioner. The petitioner has recalled the loan. The first respondent has not repaid about Rs.28 crores as claimed by the petitioner. There will be an ad interim order restraining the first respondent from dealing with or disposing of any of its assets or receiving any payment due to the first respondent from any other without first discharging the entire dues of the petitioner. However nothing in this order will affect any subsidiary or associate of the first respondent which is neither a party to the agreement nor governed by any arbitration clause with the petitioner.

Affidavits-in-opposition be filed within six weeks from date; reply thereto, if any, be filed within four weeks thereafter. The petition will appear for hearing in the monthly list of April, 2014. GA No.47 of 2014 is an application to bring certain subsequent events on record and for further orders. GA No.47 of 2014 is disposed of without costs by permitting the petiti

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oner to rely on the application as part of the petition and the orders prayed for therein as if such orderswere contained in the petition. Accordingly, the affidavits-in-opposition that may be filed should deal with the contents of the application relating to GA No.47 of 2014. Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.