The Karnataka High Court has granted temporary injunction restraining NRI entrepreneur and promoter of UAE-based NMC Healthcare, B.R Shetty, and his wife from alienating, transferring, dissipating and mortgaging their movable assets such as shares, mutual funds and deposits in banks.
A Division Bench comprising Chief Justice Abhay Shreeniwas Oka and Justice Sachin Shankar Magadum passed the order while allowing an appeal by the Bank of Baroda, which had questioned the August 28, 2020 order of the Commercial Court granting temporary injunctions in respect of only immovable properties of Mr. Shetty and his wife Chandrakumari R. Shetty.
Meanwhile, the Bench dismissed the appeals filed by Mr. Shetty and Ms. Shetty challenging the Commercial Court order of granting temporary injunction in respect of immovable properties.
The High Court said the Commercial Court was not right in denying temporary injunction in respect of movable assets merely because the bank had not furnished specific particulars of assets such as shares, mutual funds, bank deposits etc.
The bank was not in a position to provide these details as Mr. Shetty had failed to furnish details of all movable and immovable assets as per the undertaking given to the bank in the form of Letter of Negative Lien submitted to the bank, the High Court said, while pointing out that Mr. Shetty declined to provide details despite a notice issued by the bank to him in May 2020.
The bank had filed suit before the Commercial Court seeking direction to Mr. Shetty and his wife to comply with their obligations, made in the Letter of Negative Lien, to provide details of all movable and immovable assets, create mortgage in favour of bank and not to alienate, etc. the declared assets. Mr. Shetty and the Dubai-based companies/entities controlled by him had taken loan to the tune of ₹2,077 crore and as on May 5, 2020, liability of him and his companies to the bank is around ₹1,912 crore, the bank had told the court.