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2000 (4) TMI 759 - SC - Companies LawWhether the appellants herein had suffered a loss as claimed or at all? Whether respondent No. 2 had given the said shares as securities and/or the same were taken from him forcibly. If the said shares were given as securities then the question would also be as to whether it was by way of pledge or mortgage? Whether rights and bonus shares, dividend and interest on the said shares formed part of secured assets? Held that:- The decision of the Special Court holding that the appellants had been able to prove loss to the extent of ₹ 280.80 crores is affirmed. Bonus shares, dividend and interest were accretions to the pledged stock and have to be regarded as forming part of the pledged property which could not be ordered to be handed over unless redemption takes place. The letter dated 11-5-1992, addressed by Hiten P. Dalal to the appellants created a pledge in their favour not only of the shares and debentures worth ₹ 105 crores, particulars of which were given in the said letter, but also on the bonus shares, dividend and interest accrued on the said pledged shares and debentures. In reduction of Dalal’s liability to the appellants, they are entitled to sell the original shares, rights shares and the bonus shares and also to retain the dividend and interest accrued on the original shares. Cantriple Units referred to in the letter dated 11-5-1992 representing transaction value of ₹ 205 crores shall be returned to the custodian and his retention would be subject to the outcome of the other proceedings including Miscellaneous Application No. 36 of 1993 and the appellants and other parties would be entitled to try and establish their rival claims to the said units. The observations made by the Special Court with regard to the conduct of the appellants and their employees do not call for any interference.The award of costs by the Special Court for ₹ 30 lakhs against Hiten P. Dalal is affirmed.
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