Allahabad High Court Judges Disagree On Grant Of Interim Relief To Indiabulls Officials' In Shipra Group's FIR

On Friday, a division bench of the Allahabad High Court comprising Justices Vivek Kumar Birla and Rajendra Kumar-IV delivered a split decision on interim plea to stay the FIRs under Sections 420 and 120B of IPC against the officers of Indiabulls Housing Finance Ltd., lodged by Mohit Singh, Director of Shipra Estate.

Indiabulls Housing Finance Ltd. (IHFL) sanctioned 16 loan facilities of Rs.2801.00 Crores to "Shipra Group/Borrowers" comprising of Shipra Hotels Ltd., Shipra Estate Ltd. and Shipra Leasing Pvt. Ltd. for the purposes of construction and development of housing projects. Shares of various companies were pledged in favour of IHFL.

M/s Kadam Developers Pvt. Ltd. was granted permission to mortgage its land allotted by Yamuna Expressway Industrial Development Authority (YEIDA) under its sub-lease with IHFL.100% equity shares (demated) of M/s Kadam Developers were pledged to secure the loan. Shipra Group committed default of approximately Rs.1763.00 Crores. Due to no response from Shipra Group, IHFL sold the pledged equity shares to one M/s Finalstep Developers Pvt. Ltd. with M3M India Pvt. Ltd. as confirming party for R.900.00 Crores.

M/s. Kadam Developers conveyed the factum of the sale to YEIDA within 45 days. However, YEIDA lodged FIRs against IHFL and its officers for selling the shares of M/s. Kadam Developers as it caused it a loss of Rs. 200 crores. Certain FIRs and proceedings by the Enforcement Directorate have been stayed by the Court.

Counsel for Petitioners contended that separate FIRs are being filed for separate mortgaged properties even though the loan transaction is the same. Multiplicity of proceedings are being created by the Respondents to harass the petitioners, it was argued.

Counsel for Respondents sought time for seeking instructions since the matter was taken out of turn on mentioning before the Chief Justice.

Noting the order of the Apex Court in Gagan Banga v. Samit Mandal and another (Contempt Petition (Civil) No.774 of 2023) and the interim protection granted by this Court in Niraj Tyagi and Another v. State Of U.P. and 3 Others, Justice Birla granted interim protection to the petitioners from any coercive action.

However, Justice Kumar passed a separate order noting that normally the bench does not hear the matters without instruction to AGA from the police station concerned. Based on the instruction, effective orders are passed. Court said no prima facie case was made out an refused to grant any interim order.

Accordingly, due to difference of opinion, the Division Bench directed that the matter be placed before the Chief Justice for nomination to a third judge for deciding the matter in accordance with Chapter VIII Rule 3 of the Allahabad High Court Rules, 1952.

Rule 3 of Chapter VIII of the Rules 1952:

Procedure when Judges are divided in opinion :- When a case [to which the provisions of the Code of Criminal Procedure do not apply,] is heard by a Division Court composed of two or more Judges and the Judges are divided in opinion as to the decision to be given on any point, such point shall be decided according to the opinion of the majority, if there shall be a majority,. Should the Judges be equally divided they may state the point upon which they differ and each Judge shall record his opinion thereon. The case shall then be heard upon that point by one or more of the other Judges as may be nominated by the Chief Justice and the point decided according to the opinion of the majority of the Judges who have heard the case including those who first heard it.

Similar orders were passed in the writ petition filed by Himri Estate challenging FIRs under Sections 420 and 120B of IPC by Mohit Singh, Director of Shipra Estate against Himri Estate and its officers. Himri Estate is an auction purchaser of the mall/ land previously owned by Shipra Group.

Case Title: Reena Bagga and Another vs. State of UP and 2 Others [Criminal MISC. Writ Petition No. – 11837/2023] and Himri Estate Pvt. Ltd. and 4 Others v. State of UP and 2 Others [Criminal MISC. Writ Petition No. – 11838/2023]

Case Citation: 2023 LiveLaw (AB) 234

Appearances: Rakesh Dwivedi and Anoop Trivedi, Senior Advocates, Raghav Dwivedi and Varad Nath for the petitioners, Manish Tiwari, Senior Advocate, Sayed Imran Ibrahim, for private respondent and Ratan Singh for State.

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