Bombay High Court Issues Non-Bailable Warrant Against Promoter Of Varanium Cloud IT Services Provider, Orders For His Assets To Be Frozen

The Bombay High Court has issued a non-bailable warrant and further directed Red Corner Notice proceedings, if required, to be initiated against Harshwardhan H. Sabale – promoter of IT company Varanium Cloud Ltd for defaulting in payment of over Rs. 49.53 crores to his creditor.The court further ordered the attachment of Sabale's bank accounts with a total balance exceeding over Rs. 3 crore and further directed taking charge of all his demat accounts and all unencumbered shares of Varanium Cloud Limited. Justice Abhay Ahuja passed the order due to Sabale's failure to appear before the court as directed earlier or pay his debt. Creditor Cherag Shah had approached the HC seeking execution of an arbitral award directing Sabale and Ogle Technologies Ltd to pay Shah $ 4441520 with 6% interest. “It is clear that the Judgment Debtor No.1 is deliberately avoiding this Court and has been in violation/breach of the orders of this Court despite opportunity granted to him," the Court said.Accordingly, the court directed the Commissioner of Police, Mumbai to secure Sabale's presence on the next date. The judge further directed the police to take steps to have a Red Corner Notice issued against Sabale with the assistance of the Ministry of External Affairs if Sabale is in the UAE. On March 11, 2024, the court directed Sabale to appear on March 18 and show cause as to why he should not be committed to civil prison for non-payment of Rs. 49.35 crore owed to the judgment creditor.However, Sabale's counsel informed the court that the debtor was currently in the United Arab Emirates (UAE) and had applied for anticipatory bail before the Sessions Court. Dissatisfied with Sabale's non-compliance, the court ordered the issuance of a non-bailable warrant against him and to produce him by April 1, 2024. Furthermore, the court has directed the Mumbai Police Commissioner to take steps to have a Red Corner Notice issued against Sabale through the Ministry of External Affairs, if he is indeed in the UAE, to ensure his appearance.In a significant move, the court has also ordered the attachment of Sabale's bank accounts disclosed in an affidavit dated February 7, 2024. These include accounts with Axis Bank, ICICI Bank, and HDFC Bank, with a total balance exceeding Rs. 3 crore.Additionally, the court has appointed a Court Receiver to take charge of Sabale's demat accounts, including the one with ACML Capital Markets Limited, and to seize his unencumbered shares in Varanium Cloud Limited. The Receiver has also been directed to take physical possession of Sabale's residential flat in Saiba Complex, Pune, and symbolic possession of two flats in The Latitude, Pune, after considering a request for leniency regarding the latter from Sabale's counsel, citing the occupancy of his unmarried sisters.The court has also frozen all bank accounts and demat accounts held by Sabale, either singly or jointly, and has prohibited him from buying or selling shares through any undisclosed accounts until further orders.Advocate Rashmin Khandekar for the creditor submitted that it was clear that Sabale was in flagrant and willful disobedience of the orders of the court. Therefore, the accounts disclosed in the affidavit of disclosure dated 7th February 2024 and the amounts lying therein as indicated against the account numbers be attached.Case Title: Cherag Shah vs Harshwardhan H. Sabal Case No: Commercial Execution Application (L) No.16273 Of 2023Counsels For the Applicant: Mr. Rashmin Khandekar with Ms. Karishni Khanna, Mr. Turab Ali Kazmi and Ms. Hardika Kukreja i/by M/s S & K PartnerCounsels For the Respondents: Mr. Siddharth Bafna with Mr. Arpit Solanki and Ms. Rinu Kallan Click Here To Read/Download Order

Bombay High Court Issues Non-Bailable Warrant Against Promoter Of Varanium Cloud IT Services Provider, Orders For His Assets To Be Frozen

Sharmeen Hakim

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