In order to ensure that the obligations were met by the maturity, certain securities were incorporated in debenture trust deed (DTD). A first and exclusive pledge was created by Cyquator in favour IDBI Trusteeship (on behalf of NCD holders), over its holdings in Zee Entertainment. Similarly, an exclusive pledge was created by Direct Media in favour of IDBI Trusteeship, over its holdings in Dish TV. Khubsoorat Infra also executed a similar pledge.
In its observations, the division bench said, “the economic stress faced by the appellants in order to discharge their legal liabilities founded on the contractual obligations agreed to by them and as incorporated in the DTD and the share pledge agreements and the corporate guarantees, cannot be a ground to restrain the respondent No. 1/IDBI Trusteeship from exercising their rights as a pawnee as per their discretion”.
Further, the bench pointed out that dealing with the submissions made with reference to Covid-19, the single judge held that as Reserve Bank of India and Securities and Exchange Board of India had not issued circulars to restrict the right of pledgees of shares, the court could not read in to the contract, a clause akin to force majeure, “for postponing the obligations under the contracts and as the debentures had already reached maturity”.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.