Tops Security Limited & Ors v. Punjab National Bank (International) Limited & Ors

RAJIV SAHAI ENDLAW, J. MARCH 21, 2018 "ak/gsr".. (Corrected & released on 2nd May, 2018)

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 21st March, 2018 + CS(COMM) 517/2017, IA No.8950/2017 TOPS SECURITY LIMITED & ORS ..... Plaintiffs Through: Mr. Salar M Khan & Mr. Abhigyan Choudhary, Advs. Versus PUNJAB NATIONAL BANK (INTERNATIONAL) LIMITED & ORS. .... Defendants Through: Mr. Jagdeep Kishore, Adv. for D-1. Ms. Shruti Dhingra, Adv. for D-2 to 4. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. Tops Security Limited, Tops Electronic System Ltd. and Dr. Rahul Randhir Nanda, all giving their address as that of Mumbai, instituted this suit against (i) Punjab National Bank (International) Limited (defendant no.1), a banking company incorporated in United Kingdom and wholly owned subsidiary company of Punjab National Bank, India; (ii) The Shield Guarding Company Limited, London (defendant no.2), (iii) Topsgrup Security U.K. Limited, UK (defendant no.3) and (iv) Topsgrup Security Holding BV, Netherlands (defendant no.4), pleading: (i) that the plaintiffs are the alleged guarantors for the loan facility granted by defendant No.1 to defendant No.2; (ii) that the defendants No. 3 and 4 are the other alleged guarantors for the same loan facility; (iii) that the plaintiffs No. 1 and 2 and defendants No.2 to 4 are group companies; (iv) that the plaintiffs No. 1 and 2 are incorporated under the Companies Act, 1956 and having their registered office at Mumbai; (v) that the plaintiff No.3 is a majority shareholder and promoter of plaintiff No.1 and a Director on the Board of plaintiff No.2; (vi) that the defendant No.1, on request of the defendant No.2, on 21st November, 2012, granted a loan to the defendant No.2 primarily secured by the first and exclusive charge on all the current and fixed assets of defendant No.2 as well as by shares of defendant No.2; (vii) that by way of collateral security, a charge on property No. 239- 241 Kennigton Lane in London was also created in favour of defendant No.1; (viii) that the defendant No.1, vide its Sanction Letter also sought corporate and personal guarantees of plaintiffs and defendants No. 3 and 4; (ix) that a facility agreement dated 27th February, 2013 was entered into between the defendants No. 1 and 2 for a total sum of GBP 6.5 million; (x) that as per the facility agreement, all the securities mentioned in the Sanction Letter aforesaid were to remain as securities; (xi) that the officials of defendant No.1 assured the plaintiffs that the guarantees demanded from the plaintiffs were mere formalities; (xiii) that upon such assurances, the plaintiffs No. 1 and 2, on 16th July, 2013, executed Deeds of Guarantee at New Delhi and the plaintiff No.3 executed individual Deed of Guarantee on 25th February, 2013 at New Delhi; (xiii) that it was agreed that the guarantees and all documents in relation to the guarantees shall be governed and construed as per laws of India and it was further stated that any dispute arising in relation to the guarantees would be subject to non-exclusive jurisdiction of courts at New Delhi; (xiv) On request of defendant No.2, in and around 4th April, 2014, the credit facility was enhanced to GBP 7 million and owing to which the defendant No.1 demanded additional Deeds of Guarantee from the plaintiffs for the enhanced amounts; (xv) that the plaintiff No.3 signed the said Deed of Extension of Guarantee at London and the plaintiffs No. 1 and 2 signed the Deed of Extension of Guarantee at New Delhi; (xvi) that the officers of the defendant No.1 however, procured the signatures of the plaintiff No.3 on an entirely new Deed of Guarantee instead of Deed of Extension of Guarantee given as draft; the plaintiff No.3 was not aware of swapping of the Deed at the time of the signing in London; (xvii) that the defendant No.2 also did not furnish copy of the Deed got signed from plaintiff No.3, to the plaintiff No.3; (xviii) that by the said Deed of Guarantee, the defendant No.1 made plaintiff No.3 unknowingly subject to non-exclusive jurisdiction of High Court