BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No. 14 of 2012

Date of Decision : 29.02.2012

ECL Finance Limited
Edelweiss House,
Off. CST Road, Kalina,
Mumbai – 400 098.

…Appellant

Versus

1. Securities and Exchange Board of India,
   SEBI Bhavan, Plot No. C-4A, G-Block,
   Bandra-Kurla Complex, Bandra (East),
   Mumbai – 400 051.
2. Saraswati Vincom Limited
   224, AJC Bose Road,
   Krishna Building, 9th Floor,
   “909-910” Kolkata – 700 017

…Respondents

Mr. Somasekhar Sundaresan, Advocate with Mr. Paras Parekh, Advocate for the
Appellant.
Ms. Harshada Nagare, Advocate for Respondent no.1.
None for Respondent no. 2.
CORAM : P.K. Malhotra, Member
S.S.N. Moorthy, Member

Per : P.K. Malhotra, Member (Oral)

After hearing the learned counsel for the appellant and learned senior counsel
for the respondent Board, we are of the view that this appeal can be disposed of in
terms of the order passed by this Tribuna l in Appeal no. 186 of 2011 (Aditya Birla
Finance Ltd. vs. Securities and Excha nge Board of India & Anr.) decided on
November 2, 2011.

3. Learned senior counsel for the Board reiterates the stand taken by him in
   Aditya Birla case that the amount should not be allowed to be realized since a valid
   pledge has not been created. Learned couns el for the appellant disputes the same 2
   stating that there is indeed a securities interest created in terms of clause 3.2 of the
   master loan agreement date d August 5, 2009. We do not th ink it necessary to deal
   with this issue afresh as it already stands covered by para 6 of our order in Aditya
   Birla case. Following our earlier order, we set aside the impugned order and issue the
   following directions:-
   (i) The demat account of respondent no. 2 with the designated/approved
   depository participant shall be un frozen for the limited purpose of
   transfer of shares to the demat account of the appellant.
   (ii) The appellant shall be at liberty to sell the shares to the extent
   necessary to recover its outstanding dues. The shares, if any, that
   remain after recovering its dues shall be retransferred by the appellant
   to the demat account of respondent no. 2. The appellant is directed to
   inform the Board and respondent no. 2 soon after the sales are made
   and shall also furnish to them copies of the contract notes. The details
   of the loan adjustment shall also be furnished to them.
   (iii) The appellant undertakes that in the event it is called upon by the
   Board or by this Tribunal to bring back the money which it would
   have realized by the sale of shar es, it shall do so forthwith. The
   undertaking is recorded. It is, however, made clear that if and when the
   appellant is called upon to bring back the money, it shall be open to it
   to challenge the said direction and avail such remedies as are available
   in accordance with law.

In the result, the appeal is allowed as above with no order as to costs.
Sd/-
P.K. Malhotra
Member

                Sd/-  
                         S.S.N. Moorthy  
                        Member 

29.02.2012
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