In a petition filed before the Delhi High Court under Section 9 of the Arbitration and Conciliation Act, 1996 (Act) by IDBI Trusteeship Services Ltd seeking directions upon the respondents for status quo ante in respect of the secured assets, pending adjudication of the disputes between the parties and to restrain them from selling, transferring, or creating any third-party rights in respect of the secured assets forming part of the security package under the Debenture Trust Deed (DTD) dated 03-04-2023, a Single Judge Bench of Justice Tushar Rao Gedela directed the respondents to maintain status quo among other directions.
The petitioner was a SEBI-registered Debenture Trustee that acted on behalf of the lenders, i.e., debenture holders and lent an amount of Rs. 22 Crores to respondent 1 after debentures were issued as per the provisions of the Debenture Trust Deed. As per the DTD, respondent 3 had mortgaged properties, but had disposed of five properties. It was stated that the sale of some of the mortgaged properties was without the consent or permission of the petitioner and that no amount was ever repaid towards the loan secured out of the proceeds.
Upon gaining information about the illegal disposal of the mortgaged properties, the petitioner issued a legal notice on 16-02-2026, but received no reply. On 06-04-2026, another notice was issued including the purchasers’ names whose details were available on public records, due to the inaction by the respondent. Hence, the present petition was instituted.
The Court noted that the audit report mentioned not only the sale of the mortgaged properties, but also the fact that the same had been appropriated by the respondent without repaying the loan and that no title deeds had been released by the petitioner. It was stated that since the properties had already been sold, the status quo ante could not be passed, but the Court deemed it appropriate to direct status quo regarding the possession and title to be maintained by the respondents and the subsequent purchasers for the properties already sold till the next date of hearing.
Respondents 1 to 8 were also directed to file an affidavit regarding the details of the sales and to disclose the sale receipts along with the details of banks where such receipts might have been deposited. They were also directed to file the statement of accounts related to the said transactions. The Court directed for the amounts which had not been expended to be retained in the bank accounts till the next date of hearing.
Thus, the Court directed the respondents to maintain status quo for properties mentioned in the DTD, other than those that had been sold. Notice was issued and reply was directed to be filed within four weeks. The matter will now be listed before the Court on 30-11-2026.
