Avantha Holdings Limited v. Vistra ITCL India Limited

1. After this judgment was uploaded, certain inadvertent clerical errors were noticed, which require correction.

2. These are the following:

(i) In para 34 of the judgment, in the sentence reading “In actual fact, the respondent would seek to contend, the “transfer” of the pledged CGP shares to the DEMAT account of Respondent was, actually, a transfer simplicitor, accompanied 2020:DHC:2553 by an “oral agreement” – the existence of which the respondent emphatically denies – but was by way of invocation, of the pledged shares, in accordance with Clauses 9.[1] to 9.[3] of the Debenture Trust Deeds, as the failure, on the part of the petitioner, to maintain the requisite Security Cover constituted an “Event of Default”, within the meaning of Clause 1.1.41 of the Debenture Trust Deeds, read with Schedule 3 thereto”, towards the conclusion of the sentence, the word “not” is missing, after the word “was”. The sentence should actually read thus: “In actual fact, the respondent would seek to contend, the “transfer” of the pledged CGP shares to the DEMAT account of Respondent was not, actually, a transfer simplicitor, accompanied by an “oral agreement” – the existence of which the respondent emphatically denies – but was by way of invocation, of the pledged shares, in accordance with Clauses 9.[1] to 9.[3] of the Debenture Trust Deeds, as the failure, on the part of the petitioner, to maintain the requisite Security Cover constituted an “Event of Default”, within the meaning of Clause 1.1.41 of the Debenture Trust Deeds, read with Schedule 3 thereto.”

(ii) Similarly, in the extract from the judgment of High Court of

Madras in V. Sevkar v. Akash Housing[1], in para 31 of the judgment, there are some clerical errors. The extract should read thus: “The purpose of Section 9 is to provide an interim measure of protection to the parties to prevent the ends of justice from being defeated. Section 9(2)(e) vests the Court with the power to grant such interim measures of protection as may be just and convenient. The jurisdiction AIR 2011 Mad 110: (2011) 3 Arb LR 327 (DB) under the “just and convenient” clause is quite wide in amplitude, but must be exercised with restraint. Interim measures are to be granted by the Court so as to protect the rights in adjudication before the arbitral tribunal from being frustrated. It does not allow the Court the discretion to exercise unrestrained powers and frustrate the very object of arbitration” (Emphasis supplied)

3. Paras 31 and 34 of the judgment, dated 14th August, 2020 would, therefore, as corrected, read thus: “31. The categories of “interim measures”, which could be directed under Section 9, stand specifically delineated in the provision itself. The Court can, under Section 9, (i) appoint a guardian for the purposes of arbitral proceedings, (ii) direct preservation, interim custody or sale of the goods which are subject matter of the arbitration agreement, (iii) secure the amount in dispute in the arbitration, (iv) direct detention, preservation or inspection of any property or thing which is the subject matter of dispute in arbitration, or as to a breach any question may arise therein, (v) grant interim injunction or appoint a receiver and (vi) grant such other interim measure of protection as may appear to the court to be just and convenient. The ambit of sub-clause (ii)(e) of sub-section (1) of Section 9, which empowers the Court to grant “such other interim measure of protection as may appear to the court to be just and convenient” – specifically the ambit of the expression “just and convenient” – constitutes subject matter of the following enunciation of the law, by Banumathi, J. (as she then was), speaking for the High Court of Madras, in V. Sekar v. Akash Housing12. “The purpose of Section 9 is to provide an interim measure of protection to the parties to prevent the ends of justice from being defeated. Section 9(2)(e) vests the Court with the power to grant such interim measures of protection as may be just and convenient. The jurisdiction under the “just and convenient” clause is quite wide in amplitude, but must be exercised with restraint. Interim measures are to be granted by the Court so as to protect the rights in adjudication before the arbitral tribunal from being frustrated. It does not allow the Court the discretion to exercise unrestrained powers and frustrate the very object of arbitration.” (Emphasis supplied) *****

34. According to the respondent, the invocation, by the Respondent, of the pledged CGP shares, took place because of continuous default, on the part of the petitioner, in maintaining the Required Security Cover, in terms of Clause 3.[4] of the Debenture Trust Deeds. The respondent also alleges that the petitioner has suppressed, from this Court, the communications, between the petitioner and the respondent, evidencing this fact, and that, in order to conceal the real reason, for invocation of the pledged CGP shares, the petitioner has created a Machiavellian smokescreen, of a fraudulent conspiracy, between KKR, Mr. Narayan Seshadri and Vaish & Co., whereby the shares of CGP were, in the first instance, transferred to the DEMAT account of the Respondent, their value artificially depressed and, thereafter, purchased, by KKR and L & T themselves from the open market, at throwaway prices. In actual fact, the respondent would seek to contend, the “transfer” of the pledged CGP shares to the DEMAT account of Respondent was not, actually, a transfer simplicitor, accompanied by an “oral agreement” – the existence of which the respondent emphatically denies – but was by way of invocation, of the pledged shares, in accordance with Clauses 9.[1] to 9.[3] of the Debenture Trust Deeds, as the failure, on the part of the petitioner, to maintain the requisite Security Cover constituted an “Event of Default”, within the meaning of Clause 1.1.41 of the Debenture Trust Deeds, read with Schedule 3 thereto.”

4. This order shall be treated as a corrigendum to the aforesaid judgment, dated 14th August, 2020.

5. In order that the record is not incorrect, the Registry is directed to remove the already uploaded judgment and replace it with the judgment, as corrected, in accordance with the above, forthwith.

C. HARI SHANKAR, J.