Future v. IDBI: Bombay High Court sets aside City Civil Court order against Future Enterprises

The Bombay High Court on Monday set aside an order of the Mumbai City Civil Court which had temporarily restrained Future Enterprises from selling its stake in Future Generali to joint-venture Generali Group..The City Civil Court in Mumbai had recently granted relief to IDBI Trusteeship Services in their suit raising grievance against Future's public disclosure statement of January 26, 2022 about its plans to sell 25 per cent stake in its general insurance joint-venture for ₹ 1,252 crore.Additional Sessions Judge Kishore Jaiswal passed the ex-parte order holding that if no protection is granted to IDBI, it would be defeated by delay. With this, Future was restrained from selling its stake in Future Generali till further orders.Future moved the High Court challenging the order on two grounds: there was no privity of contract between FEL and IDBI; andthe ex-parte order does not record reasons which are required to be given under Order 39 Rule 3 of Code of Civil Procedure..Senior Advocates Ravi Kadam and Vikram Nankani appearing for Future, submitted that the amount of over ₹1,200 crore was beyond the jurisdiction of the City Civil Court. It was also contended that IDBI moved the Court a month after the public disclosure of January 26 was made, the transaction was to require regulatory approval, so no heavens were going to fall if judge would not have permitted to hear other side first. .Senior Advocate Navroz Seervai and Dr. Birendra Saraf for IDBI submitted that IDBI had sent several letters to the company but failed to receive any response with regards to the transaction, and due to this they were compelled to approach the Civil Court.If no protection was granted, the debenture holders would have borne the brunt of the delay, their suit stated adding that the bondholders had subscribed debentures to the tune of ₹1,070 crore.Justice Anuja Prabhudessai allowed Future's appeal.The Court stated that reasons for stay will be given in a detailed order which will be rendered later..Kadam and Nankani were briefed by Ameet Naik and Abhishek Kale from Naik Naik & Co for the Future Group.Seervai and Saraf briefed by Keystone Partners appeared for IDBI Trusteeship Services.