CLIX CAPITAL SERVICES PRIVATE LIMITED v. FUTURE CAPITAL INVESTMENT PRIVATE LIMITED & ORS.

(i) Security: The Borrower agrees and undertakes that all Outstandings in relation to the Facility and the Drawdown hereunder shall be secured by an exclusive pledge and charge over the Pledged Shares created in favour of the Lender, in the manner stated in Annexure I hereto and as more fully detailed in the Deed of Pledge ("Security"). The said Security shall provide a minimum cover of 2.5x of the outstanding Facility ("Security Cover").

(ii) Other Security Interest: In addition to the

Security, the following Security Interest shall be provided in favour of the Lender for securing/ guaranteeing the Outstandings under the Facility ("Other Security Interest"): (a) irrevocable and unconditional Deeds of Guarantee issued by the Guarantors in favour of the Lender; (b) Post-dated cheques from the Borrower; and

(c) Promissory Note from the Borrower;”

6. As is apparent from a reading of Clause 2.5(i), the Loan Agreement contemplated a security cover of a minimum of 2.[5] times the outstanding loan.

7. In accordance with the covenants in the aforesaid Agreements dated 21st March, 2018, the petitioner, on 27th March, 2018, disbursed a loan of ₹ 58 crores to R[1]

8. Clause 2.[6] of the Loan Agreements (also referred to as “Facility. Agreements”), provided for the dispensation to be followed, in case of deterioration in the value of the security furnished, for securing the loan extended under the Loan Agreements and read thus: “2.[6] Conditions relating to the Security, Notwithstanding anything contained herein, in addition to the Security and Other Security Interest, the Lender may, in its absolute discretion, ask the Borrower to furnish security other Security Interest, as it may require, in such form and substance which is satisfactory to the Lender, if in the reasonable opinion of the Lender there has been a deterioration in the value of the Security furnished by the Borrower under the Facility Documents or that such Security is insufficient to protect the rights of the Lender under the Facility Documents. Notwithstanding anything contained herein, in addition to the Security and Other Security Interest, the Lender may, in its absolute discretion, ask the Borrower to furnish additional security, for satisfaction of an Outstanding due and payable to the Lender under the Facility, in such form and substance which is satisfactory to the Lender, in case the same is demanded by the Lender in case of an Event of Default or whilst providing consent/waiver under the Facility Documents, The Borrower shall execute such deed, document and writing, if necessary, as may be required by the Lender to its sole discretion, to give effect to the provisions of this Clause.”

9. It is not in dispute that, with effect from 12th March, 2020, the value of the pledged shares of FCL and FRL started falling. According to the recitals in the petition, which have not been seriously traversed by the respondents, on and after 12th March, 2020, the value of the said shares fell below the stipulated 2.[5] times the outstanding amount of the loan. Apparently, in exercise of the dispensation contemplated by Clause 2.[6] of the Loan Agreement, the following communication was addressed, by the petitioner to R[1], on 30th March, 2020, which reads thus: “March 30, 2020 Mr. Sanjay Jain Group Chief Financial Officer Future Capital Investment Private Limited Mumbai Subject: Addendum for additional security for existing Term Loans of INR 90 crores Dear Sir, We refer to our Sanction Letter dated March 21, 2018 ("Sanction Letter(s)") issued by Clix Capital Services Private Limited (Lender) to Future Capital Investment Private Limited (hereinafter "Borrower"), under which a term loan facility of INR 58,00,00,000/- (Indian Rupees Fifty Eight Crore only) and INR 32,00,00,000/- (Indian Rupees Thirty Two Crore only) [Facility(ies)"] was extended vide Loan Agreement(s) dated 21 March 2018 ("Loan Agreement(s)") respectively. As mutually agreed between the Lender and the Borrower, the Lender through this Letter wishes to inform the Borrower about additional security to be furnished and change in terms as identified below: Additional Security and Nature and Ranking of Security First &Exclusive charge over mortgage of Commercial Shopping Mall "Dreamplex" situated on Plot No. Bulk Block/Sector No. City Centre, CS Plot No. 3601 (part), Mouza Faridapur, Touzi No.20, Khaitan No.1362, Near Income Tax Office / City Centre, Durgapur, West Bengal.("Secured Property") owned by Acute Realty Private Limited. The Secured Property shall be referred as "Security". Creation and perfection of charge over the Security shall be completed within 15 days from the date of lifting of lockdown due to COVID. In the event, the Borrower fails to adhere to the stipulated timeline, the Borrower shall be liable to pay 2% penal interest in addition to the Default interest and the rate of interest agreed in the Facility Agreement for the period of delay. Corporate Guarantor Acute Realty Private Limited Security Provider Acute Realty Private Limited having its registered office at [Knowledge House, Shyam Nagar, Jogeshwari Vikroli Link Road, Jogeshwari East, Mumbai - 400060.] Put Option The Lender, on providing a written notice to the Borrower of at least seven 7) days ("Put Option Notice"), shall have the option to call upon the Borrower to repay the entire Outstanding under the Facility, during the tenure of the Facility ("Put Option"). In the event that the Lender does not exercise its right of Put Option, the Lender shall not have deemed to have waived it unless the Borrower receives written communication from the Lender. Security Documents The Security Provider will be required to execute all relevant documentation in respect of the Security to the satisfaction of the Lender in all respects and such documents will contain such conditions, representations and warranties, affirmative and negative covenants, reporting covenants, indemnification provisions, events of default and remedies as are customary for facilities of the type described in Sanction Letter. Security Documents would include, among others:

1. Indenture of Mortgage

2. Amendatory Loan Agreements

3. Corporate Guarantee

4. Any other documents required for purpose of security creation and/ or perfection. Other Documents and conditions

1. Certified true copy of the charter and constitutional documents including but not limited to Memorandum and Articles of Association of the Security Provider

2. Certified true copy of the all board resolution(s) of the Security Provider to create the Security in favour of the Lender to the satisfaction of the Lender.

3. Certified true copy of the shareholder resolution of the Security Provider to and create the Security in favour of the Lender, if required.

4. Valuation report & Title search report of the Secured Property from a third party valuer/advocate acceptable to the Lender.

5. Duly filed form CHGl by the Security Provider registering the Security created in favour of the Lender

6. Signatures, duly verified by the bankers of the authorized signatories of the Security Provider

7. Satisfactory compliance with Lender's "Know Your Customer" and "Anti Money Laundering" requirements including, but not limited to; a. Self-attested photograph of the Managing Director and authorised signatories of the Security Provider; b. Certified copies of ID Proof (PAN Card) and Aadhar Card of the authorised signatories of the Security Provider; c. Certified copies of ID Proof (PAN Card) and Address Proof(latest Utility Bill) of Security Provider; and d. Details of Shareholders and Board of Directors of the Security Provider; List of shareholders and the board of directors of the Borrower; If any shareholder holds > 10% in the Security Provider, we would require list of their Board of Directors e. Original ultimate beneficial ownership declaration by the authorised signatory of the Security Provider.

8. Payment of all fees and expenses as directed by the Lender

9. Such other documents as requested by the Lender Event of Default In addition to the Event of Default provided in the Facility Agreement(s), delay, noncreation/perfection of security over the aforesaid property shall be treated as an Event of Default under the Facility Agreement(s) Miscellaneous The Borrower shall provide any other additional security to the Other terms All other terms of the Facility Agreement(s) and related transaction documents shall continue to govern the Facility. All capitalized terms used but not defined herein shall have the same meaning ascribed to them as the Facility Agreement. This letter shall remain in force as long as the Loan Agreement(s) is in force or until superseded by any other amendment or addendum to the Sanction Letter. Other than the modifications made herein, all other paragraphs, clauses, terms or conditions of the Sanction Letter shall remain unchanged and continue to be in full force and effect in their current form as contained in the Sanction Letter. This letter shall be governed by and construed in accordance with the laws of India. All capitalised terms used herein but not defined shall have their meaning ascribed to the Loan Agreement(s). This letter is, confidential and the property of the Lender and neither this document nor the contents hereof shall be reproduced, communicated to or used without the Lender's prior written consent to persons other than those individuals or entities who are directors, officers, employees or advisors of the Borrower and/ or the Security Provider (s) on a confidential and need-to-know basis and for the purposes of their evaluation of this letter or as may be compelled in a judicial or administrative proceeding or as otherwise required by applicable law. We look forward to a mutually beneficial business association Yours sincerely, For Clix Capital Services Private Limited _________________ _________________ Authorised Signatory Authorised Signatory Agreed and accepted; We accept the revised terms and conditions set out in this letter as above. We authorise you to collect information about us, our Directors (s), the Promoters, Security Provider, our affiliates and any person associated with us, as may be required for verification/ evaluating the Facility, including, gathering information from credit information companies. We also authorize you to share information furnished by us with credit bureaus or any statutory agency as you may deem fit. We further authorize the Lender to use the information furnished by us for offering other financial products offered by the Lender. Authorised Signatory(ies) of Borrower Authorised signatory(ies) of Security Providers (Please sign in full on all pages and affix the rubber stamp of the company on each page.) CC Mr. Kishore Biyani (Personal Guarantor to the Facility) 406, Jeevan Vihar, Manav Mandir Road, Malabar Hill, Mumbai – 400006”

10. The petition alleges that, consequent to further decline in the value of the pledged shares, the petitioner again wrote to R[1], on 8th April, 2020, requiring R[1] to pledge further shares of FCL and FRL, so as to top up the security cover to reach the minimum stipulated level of 2.[5] times the outstanding loan amount. This was followed by a reminder dated 6th May, 2020.

11. On 7th May, 2020, an “Amendatory Agreement” was executed between the petitioner and R[1], changing certain terms and conditions of the Loan Agreement dated 21st March, 2018, whereby the loan of ₹ 58 crores was extended by the petitioner to R[1]

11. The ad interim relief, claimed by the petitioner and with respect to which the present order is principally concerned, essentially revolves around the aforesaid added Clause 2.5(A), whereby and whereunder the outstanding loan, under the Loan Agreement, was secured by a first and exclusive charge over the “Dreamplex” commercial shopping mall, admittedly owned by R. Among the amendments carried out by the said Amendatory Agreement was the addition, after Clause 2.[5] in the Loan Agreement, of the following Clause: “2.5(A) Additional Security: In addition to the existing Security, the Borrower agrees and undertakes that all the Outstanding in relation to the Facility shall be secured by first & exclusive charge over Commercial Shopping Mall "Dreamplex" situated on Plot No.Bulk Block/Sector No. City Centre, CS Plot No. 3601 (part), Mouza Faridapur, Touzi No.20, Khatan No.1362, Near Income Tax Office / City Centre, Durgapur, West Bengal("Secured Property ") created in favor of the Lender. The Borrower further agrees and undertakes to provide the irrevocable and unconditional guarantee of the Security Provider/Corporate Guarantor in favor of the Lender for securing the Outstanding in relation to the Facility. The aforesaid additional security shall be created in the manner as stated in Schedule I of this Amendatory Agreement.” (Emphasis supplied)

2. It is also necessary, in this context, to reproduce Schedule I to the Amendatory Agreement, as the added Clause 2.5(A) contemplated creation of the additional security of the Dreamplex mall, in the manner stipulated in the said schedule. Schedule I to the Amendatory Agreement, dated 7th Security Provider/Corporate Guarantor May, 2020, read as under: “

SCHEDULE I ADDITIONAL TERMS AND CONDITIONS Acute Realty Private Limited having its registered office at Knowledge House, Shyam Nagar, Jogeshwari Vikroli Link Road, Jogeshwari East, Mumbai –

400060. Additional Security and Nature/Ranking of Security a) First & Exclusive charge over mortgage of Commercial Shopping Mall "Dreamplex" situated on Plot No.Bulk Block/Sector No. City Centre, CS Plot No. 3601 (part), Mouza Faridapur, Touzi No.20, Khaitan No.1362, Near Income Tax Office / City Centre, Durgapur, West Bengal.(“Secured Property”) owned by the Security Provider. b) Irrevocable and unconditional guarantee by the Corporate Guarantor. Manner of security creation: The Borrower further agrees, undertakes and ensures the creation and perfection of charge over the Secured Property and execution of guarantee in favor of Lender within 15 days from the date of lifting of lockdown due to COVID by the Security Provider/Corporate Guarantor. In the event, the Borrower and/or Security Provider/Corporate Guarantor fails to adhere to the stipulated timeline, the Borrower shall be liable to pay 2% of penal interest in addition to the Default Interest as applicable on the Facility, till the time security is created and perfected in favor of the Lender. The Borrower agrees and undertakes to provide any other additional security to the satisfaction of the Lender. Any delay in creation/perfection/ execution of the additional security shall be treated as an Event of Default under the Loan Agreement. Security Documents The Borrower and/or Security Provider/Corporate Guarantor agrees, undertakes and ensures to execute all the documents required for purpose of security creation and/ or perfection of security to the satisfaction of the Lender. Security Documents would include, among others; a) Indenture of Mortgage/Mortgage Declaration b) Irrevocable and unconditional guarantee by the Corporate Guarantor c) Undertaking from the lessee/tenant occupying the Secured Property in a format and manner acceptable to the Lender d) Any other documents required for purpose of security creation and/ or perfection to the satisfaction of Lender Other Conditions The following documents, executed by its authorized signatories, shall be provided by the Borrower and/or Security Provider/Corporate Guarantor in form and manner satisfactory to the Lender: (i)Certified true copy of the charter and constitutional documents including but not limited to Memorandum and Articles of Association of the Security Provider/Corporate Guarantor.

(ii) Certified true copy of the all board resolution(s) of the Security

(iii) Certified true copy of the shareholder resolution of the Security

(iv) Valuation report & Title search report of the Secured Property from a third party valuer and advocate respectively acceptable to the Lender.

(v) Duly filed form CHG[1] by the Security

(vi) Signatures, duly verified by the bankers of the authorised signatories of the Security Provider/Corporate Guarantor;

(vii) Satisfactory compliance with

(viii) Self-attested photograph of the

(ix) Certified copies of ID Proof (PAN

(x) Certified copies of ID Proof (PAN

(xi) Details of Shareholders and Board of

Directors of the Security Provider/Corporate Guarantor; List of shareholders and the board of directors of the Borrower; If any shareholder holds > 10% in the Security Provider, we would require list of their Board of Directors

(xii) Original ultimate beneficial ownership declaration by the authorised signatory of the Security Provider/Corporate Guarantor.

(xiii) Payment of all fees and expenses as directed by the Lender

(xiv) Such other documents as requested by the Lender ”

12. On 5th June, 2020, the following communication was addressed by R[2] to the Chief Executive Officer (CEO), Asansol Durgapur Development Authority, West Bengal: “ Dear Sir, Sub: Request for Issue of NOC for Mortgaging the lease hold commercial space measuring 31,100 Sq.Ft. situated on leasehold lay out area Ground Floor and 1st Accordingly, we hereby humbly request you to kindly issue Floor Anchor Store Space of Dreamplex Complex (Big Bazaar), City Center, Durgapur – 16, owned by Acute Retail Infra Pvt.Ltd. (erstwhile known as Acute Realty Pvt. Ltd.) We wish to inform you that our associate concern M/s. Future Capital Investment Pvt. Ltd. has availed term loan from Clix Capital Services Private Limited against one of the security by way of charge on the lease hold land and constructed structure thereon. your NOC for mortgaging the captioned property in favour of Clix Capital Services Private Limited, 901, 9th Floor, Two Horizon Center, DLF Phase-V, Gurgaon 122 002, Haryana. Thanking you, Yours faithfully, For Acute Retail Infra Private Limited Sd. Directors/Authorised Signatory”

13. On 1st July, 2020, R[1] addressed the following communication to the petitioner, seeking a moratorium on payment of the outstanding loan amount till 31st August, 2020: “Dear Sir, Sub: Facilities availed by Future Capital Investment Private Limited We refer to the aforementioned facilities availed by Future Capital Investment Private Limited ("FCIPL" or the "Company") vide sanction letters dated March 21, 2018 as amended, supplemented, modified or amended and restated from time to time ("Sanction Documents") from Clix Capital Services Private Limited ("Clix Capital") We draw your attention to our email dated May 27, 2020 where-in we had requested for moratorium till 3rd In view of the above, we once again request you to reconsider August 2020 in view of the continued extension of lockdown as permitted by RBI vide its statement dated May 23, 2020. Due to extended lock-down, business of our operating companies continues to be affected. While commercial establishments are slowly starting to open up, malls are still closed due to which the retail businesses of the group are operating well below normal pre COVID levels. This has affected the cashflows of our Company. our moratorium request for principal and interest payments due till August 31, 2020. Yours faithfully. For Future Capital Investment Private Limited Sd/- Rajkumar Pande Director”

14. Vide letter, dated 15th July, 2020, the aforesaid request of the respondent was declined by the petitioner.

15. On 27th July, 2020, R[1] addressed the following communication to the petitioner: “ Dear Sir, Sub: Facilities availed by Future Capital Investment Private Limited We refer to the aforementioned facilities availed by Future Capital Investment Private Limited ("FCIPL" or the "Company") vide sanction letters dated March 21, 2018 as amended, supplemented, modified or amended and restated from time to time ("Sanction Documents") from Clix Capital Services Private Limited ("Clix Capital"). We are fully committed to provide additional security in line with the documents executed in March. The delay in deposit of title deeds for the Durgapur property is on account of issues faced by Bank of India in locating the original title documents in their central vaults due to lock-down since their facility (now repaid) for which the property was mortgaged was also a very old one. We are in continuous discussion with the bank to find a solution to this issue. On the commercials, while we agree to continue with the monthly coupon of 12.30% p.a., we request you to reconsider the fee % as it is very high. We once again request you to consider our request for moratorium till 31st August 2020. Due to extended lockdown, business of our operating companies continues to be affected. While commercial establishments are slowly starting to open up, malls are still closed due to which the retail businesses of the group are operating well below normal pre COVID levels. This has continued to affect the cashflows of our Company. We understand that FRL and FCL shares pledged in favour of Clix Capital have been invoked. We would also like to assure you that we are very near to finding a commercial solution to address concerns of lenders. In light of this, we urge you to not take any action for sale of shares in the current circumstances. Your continued support is highly solicited in these difficult times. Yours faithfully, For Future Capital Investment Private Limited Sd/- Rajkumar Pande Director” (Emphasis supplied)

16. Admittedly, vide communication, dated 8th August, 2020, addressed to R[1], R[3] and R[4], the petitioner intimated that it had sold some of the pledged shares of FCL and FLR and adjusted the proceeds, therefrom against the overdue instalments payable on 7th June, 2020 and 7th July, 2020. Two days later, on 10th the petitioner again wrote to R[1] intimating R[1] that the security interest in respect of the Dreamplex Mall had yet to be perfected by way of a formal execution of the Mortgage Deed, and calling upon R[1] to take appropriate action immediately.

17. I may note that it is an admitted position, ad idem, between learned Senior Counsel of the parties that, till date, the charge over the aforesaid Dreamplex Mall is yet to be perfected, as no formal document, mortgaging the mall in favour the petitioner, as security towards the loan extended by the petitioner to R[1], has been executed.

18. On 9th September, 2020, the petitioner again wrote to R[1] requiring creation of security by way of mortgage over the Dreamplex Mall, and pointing out that the outstanding loan amount had stood augmented by then, to ₹ 20,60,54,398.27.

19. Clearly, therefore, there are disputes between the petitioner and the respondents.

20. Clause 13.[7] of the Agreement, dated 21st March, 2018 provides for resolution of such inter se disputes by arbitration, and reads thus: “13.[7] Arbitration 13.7.[1] The Parties shall endeavour to settle any dispute arising in connection with the interpretation, performance, termination of this Agreement, or otherwise in connection with this Agreement ("Dispute"), through consultations and negotiations. 13.7.[2] If the Parties are unable to resolve the Dispute within 15 (fifteen) days of service of the notice of Dispute, then each Party shall be entitled to refer the Dispute to arbitration under the (Indian) Arbitration and Conciliation Act, 1996, as amended. The arbitration shall be referred to a sole arbitrator appointed by the Lender who shall be a retired judge of a High Court in India. 13.7.[3] The Parties agree with respect to such arbitration that:

(i) The arbitration proceedings shall be conducted in English at New Delhi, India.

(ii) The arbitration award shall be final and binding on the Parties, and enforceable in accordance with its terms. The arbitrators shall state reasons for their findings in writing. The Parties agree to be bound thereby and to act accordingly. Judgment upon any award rendered by the arbitrator may be entered, and application for judicial confirmation or recognition or enforcement of the award maybe made in the court specified in Clause 13 hereof.

(iii) The costs of such arbitration shall be borne by the losing Party or otherwise as determined in the arbitration award. If a Party is required to enforce an arbitral award by legal action of any kind, the Party against whom such legal action is taken shall pay all reasonable costs and expenses and attorneys' fees, including any cost of additional litigation or arbitration taken by the Party seeking to enforce the award.

(iv) When any Dispute occurs, which is submitted to arbitration, except for the matter under Dispute, the Parties shall continue to exercise their remaining respective rights and fulfill their remaining obligations under this Agreement.”

21. The petitioner claims that it has been constrained to approach this Court, by way of this petition under Section 9 of the 1996 Act, following on a communication, dated 10th September, 2020, from R[1] Cc: to the petitioner, which read thus: “From: CeoOffice@futuregroup.in To: aakash.desai@clix.capital ravi.kumar@clix.capital,ashish.kalani@clix.capital,abhishek.j ain@clix.capital,Sadik.Sunasara@futuregroup.in,Akhilesh.Kalra@futuregroup.in,shamik.bagchi@jmfl.com,ad i.patel@jmfl.com Date: Thu, 10 Sep 2020 09:56:08 +0530 Subject: Business Update ============ Forwarded Message ============ Privileged and Confidential Dear Mr. Desai Please refer to the facilities availed from you against security of shares (held by my family & associates) of various listed companies forming part of Future Group. As you are aware, the COVID-19 pandemic has had a significant impact on businesses worldwide. This impact has been particularly severe for consumer-facing and retail sector businesses like the Future Group, and the decline of the stock prices of the key operating companies including FRL, FLFL, FCL, FSC, FEL and FMNL has also primarily been on account of the pandemic. In our earlier email communications sent in the month of March &April 2020, we had mentioned that the group had initiated a process of suitable capitalization of our underlying companies to mitigate the impact of Covid and/or monetization of various assets. In this regard, we would like to update you on the following:

1. Future Group has announced a major reorganization of its businesses on August 29, 2020 in which the key group companies would get merged into FEL ("Composite Scheme of Arrangement").

2. FEL will subsequently sell by way of a slump sale the retail and wholesale business that includes key formats such as Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory to Reliance Retail and Fashion Lifestyle Limited ("RRFLL"), a wholly owned subsidiary of Reliance Retail Ventures Limited ("RRVL"). FEL will also sell the logistics and warehouse business to RRVL by way of a slump sale.

3. Future Group will retain its FMCG and Integrated Fashion Sourcing & Merchandising businesses in FEL, and its Insurance JVs with Generali along with NTC Mills JVs. FEL will have strategic supply and distribution arrangements for the FMCG and fashion businesses with Reliance Retail.

RRFLL will additionally invest Rs. 2,800 Cr in equity & warrants of FEL (at price per share of Rs. 17.65) to acquire 13.15% stake, showcasing strategic intent.

4. The debt at the operating companies will be either be transferred to RRFLL and RRVL as a part of the Composite Scheme of Arrangement or will be serviced by FEL from the cash consideration received as a part of the slump sale and equity infusion by RRFLL. The transaction with RRFLL and RRVL ensures (a) continuity for the retail & logistics businesses and their stakeholders; (b) The residual businesses gets a strong strategic partner with distribution and supply arrangements that can allow it to unleash its growth potential; and (c) all stakeholders' viz. operating lenders, creditors, employees and shareholders interests gets protected. Please find attached a brief presentation outlining the details of the merger scheme and prospects of the emerging FEL The process for implementing the Composite Scheme of Arrangement will take some time as the scheme would be subject to requisite approvals from NCLT, Stock Exchanges, SEBI, Competition Commission and other statutory / regulatory authorities, including those from the shareholders and creditors and other applicable contractual approvals. There is tremendous value in the underlying operating /listed companies which is reinforced by the proposed investment of Rs. 2,800 cr by RRFLL into equity shares of FEL. In view of the above, we request for a standstill of 4 months to enable timely completion of all the approvals. As we urgently endeavour to complete the above process, we request your support for successful completion of the Scheme of Arrangement by maintaining the status quo. We would request you to not take any action which could jeopardise the implementation of the Scheme and/or affect the market value of the pledged shares for you as well as for other lenders. We have appointed an investment banking firm - JM Financial to advise us on the entire process and to find a solution in fair and transparent manner. We will soon reach out to you individually and collectively with all the lenders with a potential solution which would involve equity and/or other options, wherever feasible. We look forward to your continued support and co-operation in this respect. While I would be in direct touch with you on progress and on the next steps, also providing below contact details of the relevant persons from JM Financial and Future Group: JM Financial: Mr. Adi Patel (adi.patel@jmfl.com: +91 98217 31511) Mr. Shamik Bagchi (shamik.bagchi@jmfl.com: +9199200 51471) Future Group: Mr. Akhilesh Kaira (Akhilesh.kalra@futuregroup.in: +9190294 83908) Mr. Sadik Sunasara (Sadik.sunasara@futuregroup.in: +65 9392 5872) Regards, Kishore Biyani”

22. The submission of the petitioner, as articulated by Mr. Rajiv Nayar, learned Senior Counsel is that if the assets of the respondents, which include the Dreamplex Mall, owned by R[2], were to be alienated in the process of the reorganization envisaged by the aforesaid communication dated 10th September, 2020, it would result in irremediable injury to the petitioner and would also affect the corpus of the arbitrable dispute between the parties, as the aforesaid Mall was secured against the loans extended by the petitioner to R[1], which still remains outstanding as on date.

23. Mr. Rajiv Nayar has also invited my attention to Clause 8.11 of the Loan Agreement, which read thus: “8.11 Security and Other Security Interest. Any Security or Other Security Interest required to be created is not so created within the time period specified in,this Agreement or any event or circumstance occurs or any action or inaction on the part of the Borrower or any of the Guarantors occurs which results in the Facility Documents pertaining to Security and/ or Other Security Interest once executed and delivered to fail to provide the Security Interests, rights, title, remedies, powers or privileges intended to be created thereby (including the priority intended to be created thereby) or the Security Interest to fail to have the priority contemplated in such Facility Document or any Facility Document to cease to be in full force and effect, or the value of the Security falls below the requisite Security Cover value, unless the same is restored in the manner stated in Annexure I hereto, or the Security Interest purported to be created thereby to be jeopardised or endangered in any manner whatsoever or any other obligations purported to be secured or guaranteed thereby or any part thereof to be disaffirmed by or on behalf of the Borrower or any other Party thereto.”

24. In these circumstances, Mr. Rajiv Nayar submits that a clear case for grant of the prayers in the petition under Section 9 of the 1996 Act exists. In any event, he submits, in order to ensure that the present proceedings are not frustrated, ad interim relief to the extent of a restraint against R[2], from alienating or creating any third party interest qua the Dreamplex Mall, certainly exists.

25. Mr. Dayan Krishnan, learned Senior Counsel, for R[2] and Mr. Sandeep Sethi, learned Senior Counsel, for R[1], R[3] and R[4], have sought to traverse the submissions of Mr. Rajiv Nayar.

26. The submissions of Mr. Dayan Krishnan, learned Senior Counsel for R[2], are as under:

(i) The letter, dated 30th March, 2020 amounted, at best, to an agreement to agree and was not, therefore, enforceable at law.

(ii) R[2] was a stranger to the Amendatory Agreement, dated

(iii) Without prejudice, even if, it were to be assumed that the security cover was required to be topped up, failure to do so would, at worst, trigger an event of default, which, at the highest, could entitle the petitioner to enforce the security under Clause 9.[2] of the Loan Agreements. Having already invoked the pledges over the shares of FCL and FRL 8th Clause 9.[2] stood worked out, and it was not permissible for the petitioner to ask for further enforcement of the security against the Dreamplex Mall, premised on the letter dated 30th March, 2020 or the Amendatory Agreement dated 7th

(iv) The petitioner had not disclosed the amount earned by sale of the shares of FCL and FRL, pledged with the petitioner, in its letter dated 8 May, 2020. th August, 2020 addressed to R[1], R[3] and R[4]. The petitioner was in possession of further pledged shares, which could be sold by it, assuming there was any outstanding loan amount. The value of the remaining pledged shares was also not disclosed by the petitioner.

(v) Even on the basis of the covenants contained in the letter dated 30th March 2020 (supra), the consequence of default in the matter of perfection of the security created over the Dreamplex Mall, was only the liability of R[1]

(vii) The prerequisites of Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 (CPC), read with the judgment of the Supreme Court in Raman Tech. & Process Engg. Co. v. Solanki Traders to pay 2% penal interest, in addition to the default interest.

(vi) The charge over the aforesaid Dreamplex Mall, had to be perfected. No charge, therefore, as recognized in law under Section 77(3) of the Companies Act, 2013, therefore, existed. This Court, in exercise of its jurisdiction under Section 9 of the 1996 Act, would not issue a direction to execute a Mortgage Deed. (2008) 2 SCC 302, were not satisfied in the present case. Indeed, there was no pleading, at all, to that effect, contained in the petition.

30. As such, submitted Mr. Dayan Krishnan, no case, for grant of any relief, whether final or ad interim, exists in the present case.

31. Mr. Sandeep Sethi argued on behalf of R[1], R[3] and R[4]. While acknowledging, at the outset, that superficially seen, the ad interim relief sought by the petitioner essentially affected R[2], Mr. Sethi sought to question the very bonafides of the present litigation. He submitted that the petitioner was actually acting as a front for the Amazon Group of Companies, and that this litigation is intended to stymie the reorganization process, whereby the businesses and assets of the respondents, including the Dreamplex Mall, were to be reorganized with the Reliance Group of Companies. He drew my attention, in this regard, to the fact that, though the main cause of action, forming subject matter of dispute between the petitioner and the respondents, is the alleged failure of R[1] to liquidate the outstanding loan amount and maintain the requisite security cover as per the Loan Agreements, primary interim relief was being sought, not against R[1], R[3] and R[4], but against R[2]. This, submitted Mr. Sethi, was because the petitioner was well aware that, consequent to the reorganization of the affairs of the respondents with the Reliance Group, the value of the pledged shares would stand enhanced manifold. As such, he submitted, the petitioner does not seek to proceed against the pledged shares, but merely seeks to proceed against the Dreamplex Mall. Mr. Sethi submitted that the bonafides of the petitioner are also rendered suspect by the fact that, instead of waiting for the value of the pledged shares to increase, the petitioner has, in a pre-emptive manner, moved this Court under Section 9 of the 1996 Act. In fact, therefore, submitted Mr. Sethi, the petitioner is seeking to arm-twist the respondents and unduly enrich itself thereby. Mr. Sethi also echoed the submission of Mr. Dayan Krishnan that the petitioner was in possession of 5,25,49,134 shares of FCL, which could also be utilized by the petitioner against the outstanding loan amount. Essentially, therefore, the petitioner desires, as per Mr. Sethi, specific performance of the loan agreements at the interim stage, which is not permissible under Section 9 of the 1996 Act. The petition, therefore, Mr. Sethi submits, is an abuse of process of Court and is required to be dismissed.

32. Arguing in rejoinder, Mr. Rajiv Nayar, learned Senior Counsel, addresses the submissions advanced by Mr. Dayan Krishnan and Mr. Sandeep Sethi, learned Senior Counsel, seriatim, thus:

(i) Qua the submission of Mr. Dayan Krishnan that the charge on the Dreamplex Mall was yet to be perfected, and the reliance by Mr. Krishnan, on Section 77(3) of the Companies Act, Mr. Rajiv Nayar submits that the necessity of filing the present petition arose precisely because of the fact that, without perfecting the said charge, attempts were being made to alienate the property in question. My attention was re-invited, in this context, to the communication dated 10th September, 2020, from R[1]

(ii) Qua the submission of Mr. Dayan Krishnan that the communication dated 30 to the petitioner, which intimated the petitioner that all assets of the respondents, including the Dreamplex Mall would be alienated in the transactions with the Reliance Group. th March, 2020 was merely, at best, an agreement to agree, and was not enforceable at law, Mr. Rajiv Nayar seriously disputes this position. According to Mr. Nayar, the communication was a self-contained document with nothing more being required to be agreed upon between the parties and amounted to an enforceable contract per se, inasmuch it defines the security offered as well as the conditions on and under which the offer was made. Mr. Rajiv Nayar has placed particular emphasis on the recitals with respect to the security documents, as contained in the communication, which read thus: “The Security Provider will be required to execute all relevant documentation in respect of the Security to the satisfaction of the Lender in all respects and such documents will contain such conditions, representations and warranties, affirmative and negative covenants, reporting covenants, indemnification provisions, events of default and remedies are customary for facilities of the type described in Sanction Letter. Security Documents would include, among others:

1. Indenture of Mortgage

2. Amendatory Loan Agreements

3. Corporate Guarantee

4. Any other documents required for purpose of security creation and/or perfection.”

33. As such, submits Mr. Nayar, it cannot be contended that this document represented only an agreement to agree, and was not enforceable at law. In fact, he submits, had the security over the Dreamplex Mall been perfected, he would have had no occasion to approach this Court qua the said property. This submission of Mr. Dayan Krishnan, according to Mr. Rajiv Nayar, stands further discountenanced by the communication dated 5th June, 2020 addressed by R[2] to the Asansol Durgapur Development Authority.

34. Mr. Nayar also relies, for this purpose, on paras 48 to 50 of the judgment of a learned Single Judge of this Court in Old World Hospitality Pvt. Ltd. v. India Habitat Centre[2], and para 62 of the decision in KSL & Industries Ltd. v. National Textiles Corporation Ltd.3, which read thus: Paras 48 to 50 of Old World Hospitality Id Certum Est Quod Certum Reddi Potast; Sed Id Magis Certum Est Quod De Semet Ipso Est Certum - that is certain which can be made certain, but that is most certain which is certain on the face of it. Nobody can dispute the proposition that a fair agreement to negotiate has no legal content. But that is not the position here, for a considerable length of time the parties had acted on the terms and conditions and nowhere it is stated by the defendant that the plaintiff acted beyond the terms of the agreement except stating that the bargain is not beneficial to the defendant. That is a different aspect which will be dealt with in the course of this judgment. "There is an interesting case in Nicolen Ltd. v. Simmonds, 1953 (1) AIR 882, a decision by the Court of Appeal in England. There the “(48) The argument on behalf of the defendant is that there has been no concluded contract. But a perusal of the Memorandum dated 5.4.1994 and the 'Draft Agreement' would show that the contract is 'symbiotic' containing not only reciprocal obligations, complete duties and responsibilities and parties had agreed and come to a complete understanding about the operations by the plaintiff. The further argument is that there has been no consent by the defendant. Section 2-H of the Contract Act states an agreement enforceable in law is a contract. Section 13 of the Contract Act defines consent "Two or more persons are said to consent when they agreed upon the same thing in the same sense". It is axiomatic that a contract is complete as a contract as soon as the parties have reached an agreement as to what to each of the essential terms is or with certainty be ascertained. It is an elementary principle: MANU/DE/0580/1996 (2012) 3 Arbitration Law Report, 470 (Delhi) contract was for the sale of 3,000 tons steel reinforcing bars. The seller broke his contract. The buyer claimed damages. The defense by the seller was that there was no contract at all. The seller expressed his acceptance in the following terms: “WHERE any agreement with the usual conditions of acceptance apply.” The Court took the view that the words 'usual conditions of acceptance' are meaningless. The Court observed that “a clause which is meaningless can often be ignored while still leaving the contract good; whereas a clause which has yet to be agreed may mean that there is no contract at all, because the parties have not agreed on all the essential terms.” (49) The Court indicated a test to find out the intention, that on a true construction of the document essential terms are yet to be agreed then there is no contract, but if vague and uncertain words can be ignored without impairing the efficacy of the other terms the parties can be said to have had consensus ad idem with reference to material terms. The Court of Appeal eventually held “in the present case there was nothing yet to be agreed. There was nothing left to further negotiation. All that happened was that the parties agreed that the usual conditions of acceptance apply. That clause was so vague and uncertain as to be incapable of any precise meaning. It is clearly severable from the rest of the contract. It can be rejected without impairing the sense or reasonableness of the contract as a whole and it should be so rejected. A contract could be held good and the clause ignored. The parties themselves treated the contract as subsisting. They regarded it creating binding obligations between them; and it will be most unfortunate if the law should say otherwise. You would find faults by scanning their contracts to find some meaningless clause on which to ride free”. (50) In the instant case, everything had been done and there was no scope for any further negotiations and Therefore, it cannot be said that there was no concluded contract. The principle applicable is that where you have proposal or agreement made in writing expressed to be subject to a formal contract being prepared, it means what it says; it is subject to and is dependent upon a formal contract being prepared. When it is not expressly stated to be subject of a formal contract it becomes a question of construction whether the parties intended that the terms agreed on are merely be put into form, or whether they should be subject to a new agreement, the terms of which are not expressed in detail. If the principle is applied to the facts in the instant case, there is no room for any argument that the parties had not come to a concluded contract.” Para 62 of KSL & Industries Ltd.[3] “62. Firstly, I may deal with the respondent's defence that the MOU dated 14.11.2008 is not an enforceable agreement but it is only an agreement to enter into further agreements. In my view, prima facie, this submission of the respondent is not correct. At this stage, I may note that Mr. Parag Tripathi, learned ASG did not press this defence with any seriousness and proceeded to argue the case on the assumption that the MOU in question is a binding agreement. In any event, it appears from clause 4.1(ii) that the parties understood the MOU as creating legal, valid and binding obligations on the parties. Both the parties acted in terms of the MOU to a certain extent. Forms of formal agreements i.e. definitive agreements formed part of the MOU and, therefore, the parties were aware of the essential terms of the definitive agreements even when they signed the MOU.”

35. Mr. Nayar also relies, for this purpose, on the communication dated 27th July, 2020 (supra), from R[1] to the petitioner, which sought to explain the delay in furnishing security and reiterated the “full commitment” of R[1]

36. Mr. Nayar also relies on the covenants in the letter, dated 30, to provide additional security in line with the Amendatory Agreement. th March, 2020 (supra), to the effect that all other terms of the Facility Agreement and related transactions document would continue to govern the facility. He draws attention, further to a specific recital, in the said letter, to the effect that the letter would remain in force as long as the loan agreements were in force or until superseded by any other amendment or addendum to the sanction letter. As such, submits Mr. Nayar, the Loan Agreements were almost made a part of the letter dated 30th March, 2020.

37. Mr. Nayar further submits that he was not seeking specific performance of the agreement but only preservation of the corpus of the disputes between the parties, which the Court was eminently empowered to grant, under Section 9(1)(ii)(b) of the 1996 Act. He has placed reliance on paras 106 to 110 of the recent decision of this Court in Big Charter Private Limited Vs. Ezen Aviation Pty. Ltd. & Ors., passed in O.M.P.(I) (COMM.) 112/2020 on 23rd “106. Interim relief, under Order XXXIX, is in the nature of an interlocutory order pending disposal of a suit. Pre-arbitral interim relief under October, 2020, which read thus: Section 9 of the 1996 Act, on the other hand, is primarily aimed at securing the corpus of the dispute so that arbitral proceedings are not rendered a futility before they commence. It is for this reason that, apart from the aforesaid three criteria, of prima facie case, balance of convenience and irreparable loss, a Section 9 petitioner is also required to demonstrate that, were urgent interim reliefs not granted, there is a chance of the arbitral proceedings being frustrated, even before they take off, and of the award, if any, which may come to be passed, being rendered futile. For this reason, the principles governing Order XXXVIII Rule 5 CPC have, for that reason, also been held to be applicable, while directing the furnishing of security, under Section 9(1)(ii)(b).

107. A Section 9 court has also to be circumspect and should not take care not to entrench on the jurisdiction vested in the arbitrator by Section 17. The 1996 Act, it has to be remembered, is an Act dealing with arbitration and conciliation, and not with proceedings before a civil court. The base provision, for seeking interim relief in arbitral proceedings, is, therefore, Section 17, and not Section

9. Section 9 is, in fact, in the nature of an emergency clause, inserted to circumvent the possibility of either party, to the proposed arbitral proceedings, taking steps to render the proceedings futile, even before they commence. The court has been conferred power, to grant pre-arbitral interim relief, under Section 9 only in order to counter any attempt, by either party, to frustrate the arbitral proceedings, between the stage of arising of the dispute and, the moving the arbitrator under Section 17 of the 1996 Act. Section 9, at the prearbitral stage, is, therefore, a provision in aid of the arbitral proceedings, intended to provide ad hoc protection, till Section 17 could be invoked.

108. The sequitur is that the degree of satisfaction, of the Section 9 court, at the pre-arbitral stage, is not the same as the degree of satisfaction of the arbitrator, while exercising jurisdiction under Section 17 of the 1996 Act. The Section 9 court is essentially concerned with the issue of whether an arbitrable dispute, deserving of resolution by arbitral proceedings, exists, or not. If the case set up by the Section 9 petitioner is devoid of merit altogether, so that no dispute, worthy of arbitration, exists, the Section 9 court would be justified in declining relief. If, on the other hand, an arguable case is found to exist, which deserves resolution by arbitration, and the court finds that, were interim protection, under Section 9, not granted, there is a likelihood of frustration of the arbitral proceedings, the court would proceed to grant relief under Section 9.

109. This aspect is underscored by a comparison of the words used in Order XXXIX of the CPC, vis-a-vis those employed in Section 9 of the 1996 Act. Order XXXIX of the CPC empowers the court to "grant a temporary injunction", till the disposal of the suit, or till further orders. Section 9 of the 1996 Act, per contra, empowers the court to grant "an interim measure of protection". The word "protection", as used in Section 9(1)(ii), underscores, as it were, the raison d'etre of the provision.

110. A section 9 court is, therefore, concerned with protecting the corpus of the arbitral dispute, so that the arbitration can take off and fructify. Once a dispute, amenable to, and deserving of, resolution by arbitration, is found to exist, and the apprehension, of dissipation of the assets forming the corpus of the dispute, is found to be real and subsisting, or where the circumstances indicate that enforcement of the award, as and when delivered, would otherwise be hindered, a Section 9 can grant "interim measures of protection.”

38. Mr. Nayar also disputes the submission of Mr. Dayan Krishnan that the liability of the respondents, even in the event of nonperfection of the security over the Dreamplex Mall, would only be of 2% penal interest. He draws my attention to the following Clause in the Amendatory Agreement, which reads thus: “Manner of Security Creation: The Borrower further agrees, undertakes and ensures the creation and perfection of charge over the Secured Property and execution of guarantee in favor of Lender within 15 days from the date of lifting of lockdown due to COVID by the Security Provider/Corporate Guarantor. In the event, the Borrower and/or Security Provider/Corporate Guarantor fails to adhere to the stipulated timeline, the Borrower shall be liable to pay 2% of penal interest in addition to the Default Interest as applicable on the Facility, till the time security is created and perfected in favor of the Lender.”

39. As such, submits Mr. Nayar, the levy of 2% interest was only till the time of creation and perfection of security and did not serve to discharge R[2]

40. Mr. Nayar relies further on Clause 9.[4] of the Loan Agreement, of its obligations to perfect the security over the secured property, i.e. the Dreamplex Mall in favour of the petitioner. dated 21st March, 2018, which reads thus: “9.[4] Independent Rights. The Lender's rights for enforcement of each of the Security and / or Other Security Interest shall be independent of each other and the Lender shall be entitled to pursue each Security and each remedy simultaneously and the Lender shall not be required to first seek or exhaust any remedy against the Borrower, its successors and assigns, or any other person obligated with respect to the obligations, or to first foreclose, exhaust or otherwise proceed against any other collateral or security which may be given in connection with the obligations.” As such, submits Mr. Nayar, the right of the petitioner, for enforcement of the security created over the property pledged vide the letter dated 30th March, 2020 read with the Amendatory Agreement, was independent of the security created by way of pledge of the shares of FCL and FRL and that the petitioner was entitled to proceed against each of the securities independently and simultaneously. As such, he submits, the plea of the respondents, that, having sold some of the pledged shares on 8th August, 2020, the petitioner could not proceed against the properties secured vide letter dated 30th March, 2020 and the Amendatory Agreement, i.e. Dreamplex Mall, owned by R[2]

43. I am not, presently, deciding this petition under Section 9 of the 1996 Act finally. The present order is limited to the consideration of whether ad interim relief ought or ought not to be granted pending was entirely bereft of substance.

42. I have considered the submissions advanced by the learned Senior Counsel, which are comprehensive and exhaustive. disposal of the present petition. While taking a decision on a prayer for ad interim relief, I have had occasion to observe, in earlier orders, that the prime consideration of the Court is whether there is any requirement to pass any protective orders, pending disposal of the petition under Section 9 of the 1996 Act. The extent to which the considerations of prima facie merit, balance of convenience and irreparable loss are to be gauged at the ad interim stage, in my view, are somewhat lesser than at the stage of final hearing of the Section 9 petition.

44. The submissions of Mr. Nayar, even in the face of the response thereto by Mr. Dayan Krishnan and Mr. Sandeep Sethi, in my view, make out an arguable case for the petitioner. The letter, dated 30th March, 2020, read with the letters dated 1st July, 2020 and 27th July, 2020 from R[1] to the petitioner and the Amendatory Agreement, dated 7th May, 2020, clearly indicate that the commercial shopping mall Dreamplex was also pledged as additional security towards the loan extended by the petitioner to R[1]. There is, prima facie, nothing to indicate that resort to such additional security would be permissible only if the security, in the form of the pledged shares of the FCL and FRL stood exhausted in the first instance. There is, prima facie, substance in the submission of Mr. Rajiv Nayar that, by virtue of Clause 9.[4] of the Loan Agreement (supra) the petitioner was entitled to proceed against each of the securities, pledged against the loan advanced by the petitioner to R[1]

45. As such, the submission that the petitioner could not proceed, separately. against the Dreamplex Mall, or seek protection in that regard, having sold some of the pledged shares on 8th August, 2020, prima facie, fails to appeal.

46. It was emphatically contended before me that the petitioner has not disclosed the amounts earned by the petitioner by selling some of the shares of FCL and FRL on 8th

47. That aspect, in my view, may not, prima facie, be of much significance, insofar as the present petition is concerned. The case of the petitioner, simply put, is that, because of the reduction in the value of the shares of the FCL and FRL, the security cover has fallen below the minimum prescribed in the Loan Agreements. That the values of the shares of FCL and FRL have fallen during the course of time, is not disputed, though it was sought to be contended that consequent on the reorganization of the affairs of the respondents, once the transaction with the Reliance Group materialized, the values of the pledged shares would increase manifold. There is, however, in my view, prima facie, no requirement in law for the petitioner to wait for the value of the pledged shares to increase, or any embargo on the petitioner enforcing the security once the value of the pledged shares had fallen below the minimum security cover. The petitioner’s case is that the value of the pledged shares has fallen, resulting in the reduction of the security cover and that, in order to bring up the security cover to the prescribed minimum under the Loan Agreements, August, 2020, or, indeed, the value of the 5,25,49,134 shares of FCL which still remain pledged with the petitioner. additional security was required. It is important to note that at this ad interim stage, the petitioner is not seeking perfection of the security created over the Dreamplex Mall, but only a direction restraining the respondents from creating any third party interest in respect of the said Mall, so that the purpose of the present petition would not be frustrated.

48. In my view, this submission, as well as the other submissions advanced by Mr. Nayar in response to the submissions of Mr. Krishnan and Mr. Sethi, already enumerated hereinabove, merit acceptance.

49. There can be no dispute about the fact that the Dreamplex Mall was provided as additional security, for securing the loan advanced by the petitioner to R[1]

51. As such, pending final hearing of the present petition, R. Neither there is, prima facie, any dispute about the fact the security cover has fallen below the minimum as stipulated in the Loan Agreements. As such, the possibility of enforcement of the security created over the Dreamplex Mall, cannot be ruled out.

50. In view thereof, as an ad interim measure and pending disposal of the present petition under Section 9 of the 1996 Act, I am of the view that there is substance in the submission of the petitioner that status quo, regarding the title and property over the Dreamplex Mall, be directed to be maintained, so that the present petition is not frustrated. 2 is restrained from alienating or creating any third party interest in respect of the commercial shopping mall ‘Dreamplex’, situated at Plot No. Bulk Block/Sector No. City Centre, CS Plot No. 3601 (part), Mouza Faridapur, Touzi No.20, Khatan No. 1362, Near Income Tax Office/City Centre, Durgapur, West Bengal.

52. It is made clear that this order is being passed only pending and subject to the outcome of the present petition, preferred under Section 9 of the 1996 Act.

53. Parties are directed to complete the pleadings before the next date of hearing in the OMP, so that the OMP could be taken up for hearing and disposed of.

54. List the petition on 18.02.2021, the date already fixed.

C. HARI SHANKAR, J