The Supreme Court on Tuesday stayed the Uttar Police notice restraining Yes Bank from transferring and exercising voting rights in Dish TV on the basis of 44.53 crores shares pledged on disbursal of Rs 5270 crore loan in 2016-18 to Essel group and its sister concerns.
A bench presided over by Justice D Y Chandrachud wondered how the police could restrain someone from transferring shares and also not allow exercising of voting rights on shares.
"This will allow a lawless state of affairs," the bench, also comprising Justices A S Bopanna and Vikram Nath, said.
The court issued notice to the UP government, Essel group and others on Yes Bank's plea. It also stayed the operation of notice issued by the police on November 5 to the bank and also any further action based on the FIR registered on September 12, 2020, at police station Noida Sector 20.
The police had sent the notice to Yes Bank directing the bank not to transfer the 44.53 crores shares or to exercise rights in respect of the shares till completion of investigation by the Crime Branch or further orders.
Senior advocate Abhishek Manu Singhvi, representing the Yes Bank, submitted before the bench that police officers issuing notice to freeze rights of a bank was "bizarre, misuse of criminal law and beyond jurisdiction".
Senior advocate Kapil Sibal, representing Subhash Chandra, said these were tainted shares and the loan was not genuine, and invoking Dish TV's shares by Yes Bank was not valid.
"There was neither a genuine loan transaction nor a valid pledge of shares in favour of the petitioner," he contended.
Sibal asked why should a bank take over a company. He alleged that Yes Bank was trying to acquire Dish TV for someone else.
Singhvi, for his part, said the police action was nepotism at its best.
After hearing the detailed arguments, the bench said prima facie rights of the bank needs to be protected and added that police officers cannot be given such kind of power.
Yes Bank acquired a 24.5 per cent stake in Dish TV after the promoters failed to repay their debt and banks invoked the pledged shares.
Subhash Chandra, the founder of Essel Group, 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.
Yes Bank approached the top court after the Allahabad High Court on November 25 dismissed its plea seeking quashing of the FIR filed by Chandra. The court sought a response from Chandra and others and put the matter for consideration on January 12.
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