SC stays FIR filed against YES Bank by Subhash Chandra in Dish TV case

Essel group founder Subhash Chandra
The Supreme Court has stayed the first information report filed with the Uttar Pradesh police by Essel group founder Subhash Chandra against YES Bank, and officials of Videocon D2H. As part of its investigation, the UP police had frozen the voting rights on YES Bank's stake held in Dish TV India.

The SC said it would not permit police officers sitting in Gautam Buddh Nagar to freeze voting rights of YES Bank's stake in Dish TV India. Dish TV announced last night that it had postponed its annual general meeting, scheduled for today, by a month.

The SC said the UP police had frozen YES Bank's voting rights which even company law tribunals had not done. This would only lead to lawlessness in the country, the court said.

The SC said the freeze on voting rights amounted to short-circuiting of judicial orders by using the police. "We can't allow this. Using the criminal law process to achieve results in civil proceedings will be dangerous. We have to look at the overall consequence," the SC said and issued notices to all the parties.

YES Bank had acquired a 24.5 per cent stake in Dish TV after its promoters failed to repay their debt and banks invoked the pledged shares. In September last year, the founder of Essel group, Subhash Chandra, filed a police complaint against the bank and its former management, led by Rana Kapoor, accusing them of fraud while brokering a merger transaction between Videocon D2H and Dish TV India. The matter is under investigation by the police.

Abhishek Manu Singhvi, senior counsel appearing on behalf of YES Bank said a loan of Rs 5,270 crore was disbursed by YES Bank to the Essel group and its sister concerns between 2016 and 2018 against a pledge of shares. The pledge of 445.3 million shares of Dish TV was invoked, following which, between May and July 2020, an intimation was furnished to the BSE, NSE and RBI. 

A complaint was lodged on June 22 last year by Subhash Chandra, complaining that they had been induced or pressured to take loans and an FIR on the basis of the complaint under the various provisions of the Indian Penal Code 1860 was registered on September 12, 2020.  

On November 5, 2021, the UP police issued notices to YES Bank, preventing the transfer of the shares and the exercise of rights under them.

Kapil Sibal, senior counsel, appearing on behalf of Chandra, submitted that there was neither a genuine loan transaction nor a valid pledge of shares in favour of YES Bank. 

But in its order, the SC said, at this stage it was of the view that it would be necessary to protect the interest of YES Bank in respect of the pledged shares. The court listed the matter to January 12, 2022.

The lender moved the highest court after the Allahabad High Court dismissed its petition on Thursday to quash the FIR filed by Chandra with the Uttar Pradesh police.

As part of its investigation, the crime branch of the Gautam Buddh Nagar police had frozen the voting rights on the stake held by YES Bank in Dish TV.

YES Bank wants to replace the current board of Dish TV with its own nominees as the lender is of the opinion that the board is siding with the Chandra family, whose stake in the company has decreased to 6 per cent.

YES Bank and Dish TV India did not comment on the matter.

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