A Bench of Justices Siddharth Mridul and Talwant Singh has stayed the Single Judge order directing for maintenance of status quo with respect to the repayment to be made by Indiabulls Housing Finance to its Non-Convertible Debenture holders.
Association of Mutual Funds of India, Securities and Exchange Board of India (SEBI) and IDBI Trusteeship has filed the appeal.
Solicitor General Tushar Mehta, Senior Advocate Neeraj Malhotra and Advocate Ashish Aggarwal represented SEBI.
Senior Advocate Neeraj Kishan Kaul with Advocate Somasekhar Sunderesan, briefed by Trilegal lawyer Shankh Sengupta, along with Tine Abraham, Vatsala Kumar, Sahiba, Ramchandra Madan and Deepak Joshi represented Association of mutual funds.
Advocate Abhishek Baid represented IDBI trusteeship.
Senior Advocate Rajiv Nayar with Advocates Karan Luthra, Rishi Agrawala, Kartik Nayar represented Indiabulls.
After hearing the appeal, the court ordered,
“In the meantime, having heard learned counsel appearing on behalf of the parties at length, we direct that, the operation of the impugned order dated 15.04.2020 in Writ Petition (Civil) No.2963/2020, granting ad-interim relief in CM APPL.10281/2020, shall remain stayed.”
The Association of Mutual Funds of India, which is the representative trade body of Asset Management Companies, contended that the order passed granted an open-ended moratorium in favour of Indiabulls drawing a parallel between the moratorium policy in case of term loans issued by the Reserve Bank of India (RBI) and the purported need for similar safeguard for debentures which are regulated by SEBI.
Indiabulls contended before the Court that in spite of the rendering of the Single Judge Bench’s order, it had continued to discharge its financial obligations qua all the non-convertible debenture holders.
Trilegal’s Shankh Sengupta said, “The appeal is expected to be heard finally soon. This is not only a relief for the Mutual Funds industry, but ultimately for the public at large who hold units in these Mutual Funds. Today’s order of the High Court comes as a relief in times such as this, when a fairly large part of the middle class would be looking to their savings.”
The matter would be heard next on May 4.