Bombay High Court sets aside City Civil Court order against Future Enterprises
Bombay High Court sets aside City Civil Court order against Future Enterprises
IDBI Trusteeship, in its suit filed against Future pertaining to its plans to sell 25 percent of its stake in the general insurance joint venture, was recently granted relief by the City Civil Court. On Monday, the Bombay High Court threw out an order of the Mumbai City Civil Court, which had temporarily barred Future Enterprises from selling its stake in Future Generali to the joint venture Generali Group.
IDBI Trusteeship Services recently won relief from the City Civil Court in Mumbai in their post-release statement of January 26, 2022, announcing Future's plans to sell 25 percent of its general insurance joint-venture for ₹ 1,252 crores.
In his ex-parte order, Additional Sessions Judge Kishore Jaiswal stated that if IDBI does not receive protection, it will be hampered by delay. Future Generali's stake in Future was therefore restrained from being sold until further orders.
Future challenged the order in the High Court on two grounds:
- A contract of privity was not formed between FEL and IDBI; and
- Order 39 Rule 3 of the Code of Civil Procedure requires that reasons be added to the ex-parte order, but those are not found in the ex-parte order.
Vikram Nankani and Ravi Kadam, senior advocates appearing for Future, stated that the amount of over ₹1,200 crores was beyond the City Civil Court's jurisdiction.
Additionally, IDBI contended that it had approached the Court a month after the January 26 public disclosure of the deal and that the deal would require regulatory approval, so nothing would have fallen if it hadn't been allowed to hear the opposing side first.
IDBI's Senior Advocates, Navroz Seervai and Birendra Saraf stated that they had sent several letters to the company but received no response related to the transaction, and as such were forced to apply to the Civil Court.
According to the suit, if debenture holders did not receive protection from the delay, they would have borne the brunt of it, adding that the bondholders had subscribed to debentures worth ₹1,070 crores.
Future's appeal was allowed by Justice Anuja Prabhudessai.
In a detailed order to be rendered later, the Court stated reasons for the stay of the case will be given.
Naik Naik & Co briefed Ameet Naik and Abhishek Kale for the Future Group on Kadam and Nankani.
Keystone Partners briefed Seervai and Saraf to represent IDBI Trusteeship Services.
