The Supreme Court on Tuesday stayed the Uttar Police Notice restraining Yes Bank from transferring and exercising voting rights on its Dish TV shares.
The bench of Justices D. Y. Chandrachud, A. S. Bopanna and Vikram Nath was hearing Yes Bank’s Special Leave Petition against the November 25 order of the Allahabad High Court dismissing the bank’s plea against an FIR and the consequent notices under Section 102 of the Code of Criminal Procedure.
“This will allow a lawless state of affairs,” said Justice Chandrachud. The bench issued notice on Yes Bank’s plea and stayed the operation of the 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.
“How could the police restrain someone from transferring shares and also not allow exercising of voting rights on shares?”
the bench asked.
Appearing for Yes Bank, Senior Advocate Abhishek Manu Singhvi said the police officers issuing notice to freeze rights of a bank is bizarre and termed it misuse of criminal law.
To this, Kapil Sibal, who was representing Zee chairman 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.
After hearing the detailed arguments, the bench said a prima facie right of the bank needs to be protected. The police officers cannot be given such kind of power, the bench added.
Concluding the hearing, Justice Chandrachud warned that the court can’t permit police officers sitting in Gautam Buddha Nagar to do this kind of an exercise. “We will grant a stay and you place your facts on record,” he said.
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Yes Bank acquired a 24.5% 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 police.
Yes Bank had moved the Apex 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.