Bombay High Court’s Decision on Wadia Group’s Plea
The Bombay High Court has declined to grant urgent relief to the Wadia Group in its attempt to prevent Bank of Baroda from enforcing a corporate guarantee provided to Go First Airlines. Nowrosjee Wadia & Sons Ltd (NWS), a group company of Wadia Group, had filed a plea seeking a temporary injunction to restrain Bank of Baroda from invoking the corporate guarantee worth Rs 500 crore.
Court’s Ruling and Reasoning
Justice Manish Pitale, in an order dated March 28, stated that since the bank had indicated its intention to proceed with legal action in accordance with the law, there was no justification for granting urgent interim relief to NWS. Before the court’s decision, senior counsel Navroz Seervai, representing the Wadia Group, argued that Bank of Baroda might resort to invoking provisions of the Insolvency and Bankruptcy Code, which could have adverse consequences for the applicant.
Response from Involved Parties
A spokesperson for the Wadia Group refrained from commenting on the matter, citing its sub judice status. Similarly, Nishit Dhruva, representing Bank of Baroda, declined to provide any statement due to the ongoing legal proceedings. The court’s ruling signifies a setback for the Wadia Group in its efforts to prevent Bank of Baroda from enforcing the corporate guarantee. The decision also underscores the importance of adhering to legal procedures in matters of financial agreements and guarantees.
Future Legal Proceedings
The court has scheduled a hearing on the matter for May 7, indicating that further legal proceedings will ensue to address the issues raised by the Wadia Group. The case highlights the complexities involved in corporate financing arrangements and the legal recourse available to banks and financial institutions in case of default or non-compliance with contractual obligations.
While the legal battle between the Wadia Group and Bank of Baroda continues, the court’s decision underscores the need for clear and enforceable contractual agreements in corporate transactions. Both parties will await further developments in the upcoming hearing scheduled for May 7.
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