In its appeal before the division bench, World Crest pointed out that this observation by the judge was erroneous as the application had been disposed off as infructuous, because the cause of action had changed.
The new cause of action was brought on record by a subsequent application which came to be rejected by the single-judge.
World Crest prayed that the single judge order was contrary to the principles laid out by the Supreme Court in the PTC India case, which enunciated the pledgee’s rights.
Yes Bank on the other hand argued that the Bank held the shares with it, by virtue of a loan taken by certain other promoters, for which Catalyst was a security trustee.
Because the loan could not be repaid, the shares came to be transferred with the bank, it was contended.
Source: Barandbench
