Home Case Index All Cases Indian Laws Indian Laws + HC Indian Laws - 2020 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (1) TMI 1558 - HC - Indian LawsTerritorial jurisdiction of this court - restraint from creating any charge, mortgage, etc. on immovable properties/assets - whether defendants No. 1 to 15 are bound by the relevant clause of the Purchase Agreement dated 28.04.2011 and can be restrained from creating any charge, mortgage, etc. on their immovable properties/assets as prayed? - HELD THAT:- In terms of clause 12.1 of the Purchase Agreement, the plaintiff is barred from creating any lien, pledge, etc. on their properties etc. until the bonds in question remain outstanding. The plaintiff will also cause each of its subsidiaries not to do the same regarding its properties etc. The admitted fact is that defendants No. 1 to 15 who are the subsidiaries of the plaintiff are not signatories or parties to the Purchase Agreement dated 28.04.2011. It is the plaintiff who has been enjoined to or who has to cause each of its subsidiaries not to allow any lien on its assets and properties. Clearly, the settled legal position is that the holding company and the wholly owned subsidiary are two distinct legal entities. The holding company does not own the assets of the subsidiary - mere undertaking of a person that he will not dispose of his properties during the currency of the loan does not confer any charge on the immovable properties. Prima facie the plaintiff merely based on the terms of the Purchase Agreement cannot restrain defendants No. 1 to 15 from dealing with their immovable assets/assets. The Purchase Agreement between the plaintiff and defendant No. 20 is not executed by defendants No. 1 to 15. There is no commitment or promise held out by defendants No. 1 to 15 to the plaintiff that the said defendants will not deal with or encumber their immovable properties. Mere execution of the Purchase Agreement dated 28.04.2011 by the plaintiff does not prima facie oblige defendants No. 1 to 15 to abide by the terms and conditions of the purchase agreement. The plea of the plaintiff/defendant No. 20 essentially is that defendants No. 1 to 15 have made a categorical admission by their conduct including providing information in relation to its structure, future projects, financial statements, etc. to defendant No. 20 in compliance with the Purchase Agreement. It is also stated that despite knowledge of the Purchase Agreement dated 28.04.2011, none of the said defendants took steps regarding seeking a declaration that they are not bound by the terms of the said agreement - considering the nature of the transaction, the stated acts of defendants No. 1 to 15 on which reliance is placed by the plaintiff and defendant No. 20 prima facie, does not lead to a conclusion that there is Privity of Contract between defendants No. 1 to 15 and defendant No. 20/plaintiff. No such conclusion would follow merely because some interaction took place between the defendants No. 1 to 15 and defendant No. 20 whereby financial or operational details were shared. A categorical finding cannot be recorded that defendants No. 1 to 15 had by their conduct or acts committed to remain bound by the terms and conditions of the Purchase Agreement dated 28.04.2011. No doubt, a conclusive finding to the above effect based on the alleged conduct of defendants No. 1 to 15 etc. can be recorded after detailed evidence is led. Territorial jurisdiction of this court - HELD THAT:- The agreement is executed between the plaintiff and defendant No. 20. As per Clause 20 of the Agreement, all matters arising are to be governed and construed in accordance with internal laws of the State of New York applicable to agreements. Under Clause 20.2, the courts of the State of New York and the courts of the USA in each case located in the County of New York shall have jurisdiction to settle and to hear any suit, etc. connected with the agreement - By the present suit, the plaintiff is seeking an injunction to restrain defendants No. 1 to 15 not to pledge, mortgage, etc. the movable and immovable properties without prior permission of the Receiver of the plaintiff. A declaration is also sought that the charge created in favour of defendants No. 16 to 19 be declared non-est, null and void. The suit does not seek any relief encompassed within Section 16 of CPC. Admittedly some of the defendants have their registered office in Delhi. That apart, agreement dated 14.05.2018 with defendants No. 16 and 17 is said to have been executed in Delhi. In view of the above, at this stage, the suit cannot be returned for lack of territorial jurisdiction of this court. Keeping in view equities in these circumstances, it would be in the interest of justice to permit defendants No. 1 to 10 to complete their pending projects and unlock the unsold inventory of assets which is lying on account of non-completion of projects - Application disposed off.
|