Full Text
HIGH COURT OF DELHI
Decision delivered on: 29.05.2024
M/S MORGAN SECURITIES AND CREDITS PVT. LTD. ..... Appellant
Through: Mr Abhishek Puri, Ms Surbhi Gupta and
Mr Sahil Grewal, Advs.
Through: Mr Arun Kumar Verma, Sr Adv.
Kuljeet Rawal, Ms Iti Sharma and Mr Aditya Joshi, Advs.
HON'BLE MR. JUSTICE AMIT BANSAL [Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J. (ORAL):
JUDGMENT
1. This appeal is directed against the judgment dated 31.10.2023, passed by the learned Single Judge in OMP(I)(COMM)No.338/2023.
2. We have heard the learned counsel for the parties for some time.
3. Mr Abhishek Puri, learned counsel, who appears on behalf of the appellant, says that for the moment, the appellant will be satisfied if the appeal is disposed of with the following directions:
(i) That any funds obtained by the respondent hereafter, via issuance of securities, would be detailed out in the form of an affidavit, which will be filed with the court. The affidavit will also indicate utilisation of funds, and at which stage the appellant should have the liberty to object the utilisation which is not in the usual and ordinary course of business, including investment which further the interest of the respondent.
(ii) The negative covenants incorporated in clauses 12 and 13 of the ICD agreement dated 07.03.2000 [in short, “ICD Agreement”] will continue to operate and shall not be stalemate on account of the observations made in paragraphs 6 to 8 of the impugned judgment.
4. Mr Arun Kumar Verma, learned senior counsel, who appears on behalf of the respondent, says that as indicated by Mr Puri, insofar as informing the court with regard to the funds obtained through issuance of security and its utilisation is concerned, the respondent can have no objection if such a direction is passed. 4.[1] Mr Verma further submits that as regards the impact of the negative covenants is concerned, that issue can be kept open for adjudication, if and when recourse is taken by the appellant with regard to the said clauses of the ICD Agreement.
5. Having heard the learned counsel for the parties, the appeal is disposed of with the following directions:
(i) If and when funds are obtained by the respondent through issuance of securities, an affidavit will be filed in the court, disclosing the relevant details. In the event the respondent is desirous in utilising the funds, the information in that behalf will be provided by way of an affidavit to the court, i.e., before the learned Single Judge, where enforcement action under Section 34 of the Arbitration and Conciliation Act,1996 is pending.
(ii) As regards the observations made by the learned Single Judge on the negative covenants are concerned, which finds mention in paragraphs 6 to 8 of the impugned judgment, the questions of law arising therefrom, as raised in the instant appeal, are kept open. As and when recourse, as per law, is taken with regard to the said negative covenants by the appellant, the same will be addressed, if necessary, by the concerned court.
6. The appeal is disposed of in the aforesaid terms. Consequently, the pending application shall also stand closed.
RAJIV SHAKDHER, J AMIT BANSAL, J MAY 29, 2024