Shares dispute: Bombay High Court clears way for Yes Bank to attend and vote in DishTV EGM on June 24

World Crest Advisors LLP, promoter group of DishTV, had moved an appeal before a division bench of the High Court after a single-judge bench of Justice Anil K Menon on June 17 had rejected its interim application. World Crest, in its application, had sought to restrain Catalyst Trusteeship and Yes Bank from participating in and/or exercising any right, including voting rights, in the EGM scheduled on June 24.

Justice Menon had held that the applicant (World Crest) had “not made out a prima facie case nor is the balance of convenience favouring grant of relief” and “no irreparable harm is likely to be caused to the plaintiff/applicant”.

Last month, DishTV had made an announcement about the EGM to ratify and pass a resolution for re-appointment of the managing director, the whole-time director and a non-executive independent director of DishTV.

An interim application was filed in a suit wherein World Crest has sought itself to be declared as owners of over 440 million (nearly 24.19% stake) shares of DishTV.

However, Yes Bank had claimed that the concerned shares have been pledged in favour of Catalyst Trusteeship, a security trustee, by five other companies to secure the term loans granted by the bank to them. Yes Bank claimed to be the beneficial owner of the shares and sought to exercise rights in respect of the same. World Crest, in its suit, had claimed that Catalyst had acted in collusion with the bank and transferred the shares to itself and later to the bank.

Plaintiff World Crest, through senior advocate Navroz Seervai, had submitted that it had facilitated pledge of suit shares as security with Catalyst on the basis of assurances and representations made by defendants, including the bank, that the shares would at all times continue to be World Crest’s “absolute property”, unless the same are sold pursuant to default.

The DishTV promoter apprehended that the bank will seek to vote on the suit shares over which only the former had entitlement rights, and therefore sought a restraining order.

Yes Bank, through senior advocate Venkatesh Dhond, however, opposed the application and claimed that it is entitled to exercise voting rights and that they have been exercising voting rights in the past hence the balance of convenience does not favour the applicant.

Dhond had added that Rs 5,270 core is payable and overdue from the borrowers and the applicant is a part of the group controlling the borrowers. He added that it is one more attempt to stall the bank’s participation at the ensuing meeting, since the applicant failed to obtain a favourable order last year.

The World Crest argued in its appeal before a division bench that that order by a single-judge bench was “erroneous” and contrary to past Supreme Court judgments and the same needed to be quashed and set aside.

The Yes Bank, however, argued that it held shares with it by virtue of loans taken by certain other promoters for which Catalyst was a security trustee. It said that because the loan could not be repaid, the shares came to be transferred with the bank.

However, the bench refused to accede to World Crest’s appeal and dismissed the same.

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