Case Summary: Pawan Gupta & Anr. v. Miton Credentia Trusteeship Services Ltd. & Ors. 

Summary:

The case revolves around a family dispute concerning the ownership and encumbrance of immovable property in Karol Bagh, New Delhi. The plaintiffs claim ownership of the property through family settlements. The property, owned by subsidiaries of a family-owned corporate entity, has been mortgaged by certain defendants to secure financial obligations without disclosing such transactions to the plaintiffs or the arbitrator handling the family dispute. The plaintiffs sought declarations to nullify the encumbrances and injunctions to protect their alleged property rights.

Facts:

1. Karol Bagh property is owned by Defendant Nos.4 to 6 but the Plaintiff have been claiming their right, title and interest in the said property by virtue of Family Settlement entered inter-se the family members on 30.09.2014, 20.06.2015 and 09.07.2019

2. The property in question, located at Karol Bagh, is owned by three subsidiary companies of Defendant No. 7, in which the plaintiffs hold a 26.4% share as Promoter Director. Defendant Nos.4 to 6 are subsidiary Companies of Defendant No.7 which is holding 99.90% shares in each of the aforesaid Companies.

3. Without informing the plaintiffs, Defendant Nos. 4, 5, and 6 created a charge on the property through a Debenture Trust Deed (March 2022) and Memorandums of Equitable Mortgage (April 2022). The plaintiffs then inspected the records maintained on the portal of the Ministry of Corporate Affairs, Government of India and discovered that the charge was shown to be registered on 06.06.2022 i.e. three days after the Judgment was reserved in the Petition under Section 9 of the Act, 1996.

4. The plaintiffs allege concealment of the charge during pending arbitration proceedings related to the family settlement and seek court intervention to declare the mortgage agreements void.

Plaintiffs Arguments:

Assert ownership of the property through family settlements and claim exclusive possession since October 2024. The Plaintiff has claimed that in the interregnum Defendant Nos.2 & 3 have exercised a “Put Option” in the Debenture Trust Deed dated 30.03.2022 vide Notice dated 08.10.2024, calling upon Defendant No.4 to repay the monies due along with interest within 60 days of issuance of the said Notice. The shares held by the holding Company, Defendant No.7 have also been pledged. Argue that the defendants’ creation of the charge was unauthorized, concealed, and aimed at defeating their rights. Emphasize the urgency of protecting the property to prevent further financial maneuvers by the defendants.

Defendants Arguments:

Challenge the maintainability of the suit, asserting that disputes concerning family settlements and corporate management fall under arbitration or the jurisdiction of the National Company Law Tribunal (NCLT) under Sections 241 to 246 of the Companies Act, 2013.

The Arbitrator has already directed the parties not to deal with the subject properties in any manner without first seeking liberty from the Tribunal. Therefore, the properties already stand protected and the present suit for seeking protection, is not tenable. It is asserted that unless the Subject Properties are protected, the bona fide claims of the Plaintiffs under the Family Settlement would be defeated.

Highlight procedural lapses, including non-compliance with pre-litigation mediation requirements under the Commercial Courts Act.

Court’s Findings:

1. The Application under Section 12A of the Commercial Courts Act is yet to be adjudicated. The court noted that the plaintiffs failed to establish immediate urgency justifying their exemption from pre-institution mediation.

2. It observed that the arbitrator had already issued interim orders protecting the disputed properties.

3. The court acknowledged the plaintiffs’ argument that Defendant Nos. 1 to 3 (financial entities) were not party to the arbitration and thus could not be subjected to its jurisdiction. However, it found that the plaintiffs could seek relief under Section 9 of the Arbitration Act against non-arbitrating parties as has been held in the case of Blue Coast Infrastructure Development P. Ltd vs. Blue Coast Hotels Ltd and Anr, AIR Online 2020 Del. 862.

Order:

The court declined to grant interim relief at this stage, stating that the plaintiffs had alternate remedies available and that the suit’s maintainability was under challenge.