HSA | Dispute Resolution & Arbitration Monthly Update | July 2023

Gujarat Composite Ltd v. A Infrastructure Ltd & Ors

Background facts

• Gujarat Composite Ltd (Appellant) entered into 2 license agreements with A Infrastructure Ltd (Respondent No. 1) and its sister concern for licensing the operation of its manufacturing units. Thereafter, the Appellant and Respondent No. 1 executed a supplementary agreement for the advancement of certain sum to the Appellant and it was agreed that Respondent No. 1 would be permitted to create a mortgage on the licensed manufacturing units to secure the ad hoc advance.
• Subsequently, a tripartite agreement was executed between the Appellant, Respondent No. 1 and Bank of Baroda (Respondent No. 2), whereby Respondent No. 2 sanctioned a loan of INR 500 lakh to Respondent No. 1. Further, an amendment was introduced to the tripartite agreement to restrict the transfer of title deeds of the land of Appellant during the term of license agreement.