A division bench of Chief Justice N H Patil and Justice N M Jamdar was hearing a petition by Reliance Power's promoter company Reliance Project Ventures and Management Pvt Ltd. The promoter entity has challenged a single judge bench's order that refused to stop sale of pledged shares by Edelweiss Group or grant any relief to Reliance Power Ltd (RPL).
The division bench suggested the parties concerned to try resolving the dispute out of court and said it would hear the petition after two weeks.
On February 13, a single bench presided by Justice K R Shriram said it found no merits in RPL's arguments prima facie and the entire pleadings made by RPL "smacked of deceit".
RPL argued before Justice Shriram's bench that the sale of its pledged shares byEdelweiss' ECL Finance Limited was illegal and must be stopped.
It urged the court to stop such sale as an interim relief and to subsequently declare the sale illegal and void,
It also requested the court to direct Edelweiss to pay it a compensation of over Rs 2,700 crore for the fiscal and reputational loss caused by such sale.
On February 4, RPL received a notice from Edelweiss' ECL Finance Ltd notifying the sale of its shares by the debenture holding companies of the Edelweiss group.
The next day, shares worth Rs 5.96 crore were sold. Some shares were also transferred to the debenture holders the same evening on the now lowered value.
ECL, through its lawyer Janak Dwarkadas, told the single bench on February 13 that it was well within its rights to sell the shares.
According to ECL, in August this year, RPL's share value plummeted and as per their contract, RPL was required to pay an additional two per cent interest on the amount it borrowed.
However, RPL refused to pay the additional amount.
"On February 1 this year, RCom announced bankruptcy. The share value began to drop. But RPL never bothered to communicate with us. We needed to protect our debenture holders and therefore, began the sale of shares pledged to us," Dwarkadas then argued.
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