Delhi High Court
M/S Morgan Securities And Credits Pvt. ... vs M/S Ganesh Benzoplast Limited on 29 May, 2024
Author: Rajiv Shakdher
Bench: Rajiv Shakdher, Amit Bansal
$~16
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Decision delivered on: 29.05.2024
+ FAO(OS) (COMM) 263/2023 & CM APPL. 62498/2023
M/S MORGAN SECURITIES AND
CREDITS PVT. LTD. ..... Appellant
Through: Mr Abhishek Puri, Ms Surbhi Gupta and
Mr Sahil Grewal, Advs.
versus
M/S GANESH BENZOPLAST LIMITED ..... Respondent
Through: Mr Arun Kumar Verma, Sr Adv. with
Mr Ashwani Kumar Dhatwalia, Mr
Kuljeet Rawal, Ms Iti Sharma and Mr
Aditya Joshi, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MR. JUSTICE AMIT BANSAL
[Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J. (ORAL):
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.
7. Parties will act based on the digitally signed copy of the order.
RAJIV SHAKDHER, J
AMIT BANSAL, J
MAY 29, 2024
aj
