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2016 (1) TMI 44 - BOMBAY HIGH COURTRestraining the Appellants from selling 20,14000 shares of United Breweries Limited (the NDA shares) which were furnished as security under the Non-Disposal Agreement dated 12/11/2011 - appeal against the order of injunction granted by the learned Single Judge delivered in favor of Kingfisher Airlines Limited - maintainability of appeal - Held that:- no prima facie case has been made out by the Plaintiffs for grant of any interim relief and Plaintiff No.1 - United Breweries (Holdings) Limited was duty bound to pay the recompense amount and upon its non-payment of the said total short-fall of ₹ 146 crores, Defendant No.1 - 3i Infotech Trusteeship Services Limited became entitled to sell these shares to recover the said short-fall and to whom Plaintiff No.1 - United Breweries (Holdings) Limited has given Power of Attorney to sell in the event of default being committed by it. Non-payment of short-fall and recompense amount clearly constituted the event of default under clause 9.1 and 10 of the LPA which also has been incorporated under clause 3.1(h ) of the NDA. It is well settled that recitals alone do not spell out the intention of the parties but terms and conditions of the contract and intention of the parties have to be taken into consideration for arriving at any conclusion. The interest component could be converted into equity shares and the loan component would be reduced to 403.72 crores with interest. However, both these components have been fully secured; the loan component by the pledged shares and the top-up shares and equity component by the Fixed Deposit of margosa and 20,14,000 shares of United Breweries Limited which could be sold in the event of default. The questions are answered as follows:- (1) Whether 20,14,000 shares of UBL furnished as security (NDA shares) under Non-Disposal Agreement dated 12/11/2011 was available as security in favour of the Appellants for the payment of their recompense claim arising under Clause 10.1 of the Loan Purchase Agreement dated 21/12/2010? - Held Yes. (2) Whether the Appellants' recompense claim was capable of being collateralised or secured? - Held Yes (3) Whether the NDA shares were given in lieu of top-up obligation under clause 4.1.3 of the Loan Purchase Agreement only? - Held No. Decided in favor of appellant bank.
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