The Supreme Court on Tuesday stayed the Uttar Police notice restraining Yes Bank from transferring and exercising voting rights on its Dish TV shares.
A bench headed by Justice D.Y. Chandrachud remarked how could the police restrain someone from transferring shares and also not allow exercising of voting rights on shares?
"This will allow a lawless state of affairs...," said Justice Chandrachud. The bench, also comprising Justices A.S. Bopanna and Vikram Nath issued notice on Yes Bank's plea and stayed the operation of notice by the police to the bank and also any further action based on the FIR. The police had sent the notice to Yes Bank on November 5 this year.
Senior advocate Abhishek Manu Singhvi, representing the Yes Bank, submitted before the bench that police officers issuing notice to freeze rights of a bank is bizarre and termed it misuse of criminal law. Senior advocate Kapil Sibal, representing Subhash Chandra, said these are tainted shares and the loan (in excess of Rs 5,000 crore) was not genuine, and invoking Dish TV's shares by Yes Bank was not valid.
Sibal contended why should a bank take over a company, and alleged that Yes Bank was trying to acquire Dish TV for someone else.
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Singhvi 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. The police had registered an FIR and effectively frozen Yes Bank's rights on pledged shares.
Yes Bank acquired 24.5 percent 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, in September last year 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.
Yes Bank moved the top court after the Allahabad High Court dismissed its plea seeking quashing of the FIR filed by Chandra.
The crime branch and the UP Police in Gautam Buddha Nagar have frozen the voting rights on the stake held by Yes Bank in Dish TV India.
(Text input from IANS)