Delhi HC orders maintenance of status quo with respect to payments to be made by Indiabulls to its Non-Convertible Debenture holders

The Delhi High Court has directed for maintenance of status quo with respect to the repayment to be made by Indiabulls Housing Finance to its Non-Convertible Debenture holders. (Indiabulls Housing Finance vs SEBI).The ad interim order was passed by a Single Judge Bench of Justice C Hari Shankar..Counsel for Indiabulls Housing Finance informed that Court in view of the RBI circular dated March 27, 2020, it was impossible for the Petitioner to effect recoveries of debts owed to it by various institutions..Seeking parity between its liability to pay and the rights to recover dues, Indiabulls sought to postpone its liability to pay its Non-Convertible Debenture Holders by invoking SEBI's power under Section 11(B) of the SEBI Act, 1992..Indiabulls thus prayed for an ad interim direction to restrain any coercive action against it with respect to the repayment to be made by it to its Non-Convertible Debenture Holders..Reliance was also placed on the Bombay High Court order in Transcon Skycity and Transcon Iconica case. .Bombay HC grants interim relief to Transcon Skycity, Transcon Iconica; excludes period of lockdown from 90-day period for NPA calculation.Counsel for SEBI disputed the applicability of the RBI Circular to the present case. It was submitted that the Circular did not affect any liability arising from Non-Convertible Debentures. .It was added that Regulations applicable to liabilities arising from Non-Convertible Debentures were of 2008 and 2015 and contained provisions which permitted rolling over of debt securities in the present case..SEBI further submitted that it would be appropriate that the persons to whom payments were required to be made in accordance with law are impleaded as parties..In response, Indiabulls submitted that it would implead the Non-Convertible Debenture holders as parties. .It was added that irrespective of the applicability of the RBI Circular to the respect case, it was willing to pay pay interest on the principal amounts to the parties as an ad interim arrangement, in accordance with the respective agreements, but without creating any equity on that ground..In view of the above, the Court directed for maintenance of status quo with respect to the repayment to Non-Convertible Debenture holders by Indiabulls..Given the peculiar facts of this case and the present lockdown, till the next date of hearing, there shall be an ad interim order, in terms of prayer (a) in CM Appl. No. 10281/2020, till the next date of hearing.Delhi High Court.The Court also issued notice to SEBI and other respondents and sought counter affidavits within a period of two weeks..The matter will be heard next on May 19..Indiabulls was represented by Senior Advocate Rajiv Nayar with Advocates Rishi Agarwal, Karan Luthra, Ankit Banati. .SEBI was represented by Senior Advocate Neeraj Malhotra and Advocates Ashish Aggarwal, Shefali Kishore..Read the Order: