In a major relief for realty major DLF Limited, the Delhi High Court on Wednesday suspended the sale of shares of Joyous Housing Ltd by Omkara Asset Reconstruction Company to a third party entity.
The HC order comes as a respite to DLF in its bid to preserve its stake and investment in Joyous Housing Limited, which is responsible for developing a prominent project in Mahalaxmi, Mumbai. DLF holds 37.5% in Joyous Housing.
PNB Housing Finance Limited (PNBHFL), which had sanctioned a loan of Rs 800 crore to the Joyous Housing in 2017, invoked the pledge over 100% of the shares of the company pledged to it by its three shareholders – DLF, Hubtown Ltd and Chinsha Property Pvt Ltd – after the account became NPA. The account was later transferred to Omkara Asset Reconstruction Company Limited, which sold 75% of the shareholding in Joyous Housing (including the entire shareholding of DLF) to an undisclosed entity.
As per DLF’s submission, the transfer of the loan account was in violation of the Indian Contract Act. DLF also pleaded in the court that Omkara clandestinely sold 75% of the shareholding in Joyous Housing without any notice. DLF also pointed out that it had accepted PNB Housing Finance’s offer to redeem 100% of shares pledged to PNBHFL.
The high court in its order not only rejected Omkara’s request to submit the name of the third party or details of such sale transaction in a sealed cover but also allowed DLF’s prayer directing Omkara to reveal such details by way of an affidavit.
The court also acknowledged the readiness and willingness exhibited by DLF to redeem 100% of the pledged shares as early as on 10 November 2022, held that the loss of its shares could not be remedied by compensation in terms of money. Therefore, it ordered that the shares sold by Omkara to any third party transferee be kept in “suspended animation” while simultaneously directing Joyous Housing not to recognise any further sale that may have been made by such third party transferee in its books.