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2020 (5) TMI 736 - HC - Indian LawsRecovery with future interest on the basis of written contract and negotiable instrument - It was contended that in view of the commencement of the proceedings under the SARFAESI Act there was a bar to institution of the suit - HELD THAT:- There can be no quarrel with the proposition that once the Pawnee invokes the pledge and sells the security the Pawnee is in law bound to give credit to the Pawner of the value of the sale proceeds. If the value of the sale proceeds exceeds the amount of debt the Pawnee is bound to refund the said excess amount to the Pawner. He would be entitled to institute an action to recover the balance amount of debt only. During the subsistence of the pledge the voting rights in respect of the pledged securities were to be exercised by Defendant Nos. 4 and 5. However, once the pledge was invoked the voting rights in respect of the pledged securities were to be transferred and exercisable by the Plaintiff. This stipulation by itself does not amount to the sale of the pledged securities. It is nobody’s case that the Plaintiff has in fact sold the pledged securities and realized the value thereof - A mere stipulation in the agreement of pledge that after the invocation of the pledge, the Pawner would exercise the rights in respect of the pledged securities does not ipso facto amount to sale of the pledged securities by the Plaintiff unto itself. The pronouncement of the Supreme Court in the case of IDBI TRUSTEESHIP SERVICES LTD. VERSUS HUBTOWN LTD. [2016 (11) TMI 1529 - SUPREME COURT], especially the proposition expounded in para 17.6 that, “if any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court” governs the facts of the case - conditional leave to defend the suit granted subject to deposit of the principal amount of Rs. 29 Crore and interest of Rs.3,94,71,781/- at the agreed rate of 13.50% p.a. as of 10th January, 2019. Summons disposed off.
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