Yes Bank-Dish TV dispute: SC stays criminal proceedings, notices to freeze voting rights

The Supreme Court on Tuesday stayed the criminal proceedings in the FIR initiated by Gautam Buddha Nagar police in Uttar Pradesh on the complaint of Essel Group against the Yes Bank officials.

A Bench of Justices DY Chandrachud, AS Bopanna, and Vikram Nath said that it cannot allow the police sitting in Gautam Buddha Nagar in Uttar Pradesh to freeze the voting rights of shareholders of a company.

The top court also stayed the operation of two notices issued by Gautam Buddha Nagar police to the stock exchange and the National Securities Depository Limited (NSDL) asking to not allow any transfer of shares of Essel group held by the bank.

The Bench said, "using the criminal procedure to achieve results of civil procedure will have a dangerous consequence. Tomorrow, anybody will catch a police officer and stall the voting of a shareholder. This will be the easiest thing to do. Can't allow the police sitting in Gautam Buddha Nagar to freeze voting rights of shareholders of a public listed company. Here, the police have done something which the Company Law Tribunal won't do."

"We don't want this kind of power to be given to the police or they will start interfering in corporate matters. This is short-circuiting the judicial process by getting orders from police officers. This we will not allow," the Bench further observed.

The apex court was hearing an appeal filed by the Yes Bank against the November 25 order of Allahabad High Court which had refused to quash the notices under section 102 CrpC and FIR lodged by the police.

The UP Police's Gautam Buddh Nagar Crime Branch had last week issued a notice freezing Yes Bank's voting rights in Dish TV operated by Subhash Chandra's Essel Group. The move of police came on a complaint made by Essel Group accusing its former chief executive, Rana Kapoor, of fraud.

Yes Bank had extended a loan facility of Rs 5,270 crores to Essel Group and its sister concerns between 2016 and 2018 against the pledge of Dish TV shares. When there was a default, Yes Bank had invoked the shares.

( With inputs from ANI )