The Supreme Court Tuesday set aside the Allahabad High Court order refusing to entertain the Yes Bank plea challenging police investigation into an FIR lodged by the Essel Group in connection with the bank-Dish TV dispute on pledging of shares.

A bench comprising Chief Justice DY Chandrachud and Justices PS Narasimha and JB Pardiwala also directed that its earlier order of November 30, 2021 staying police investigation in the FIR shall remain in operation till the high court has disposed of the Yes Bank's plea against the FIR.

The top court remanded the case to the high court for fresh disposal on merits within a period of two months after the receipt of the certified copy of its order.

We are of the considered view that the Allahabad High Court was not justified in not dealing with the petition (of Yes Bank) on the ground that the alternative remedy was available under section 451 and 457 of the CrPC (Code of Criminal Procedure). The high court ought to have addressed itself the merits of the petition which it has failed to do, the bench said in its order.

In the above circumstances, we set aside the impugned order of the High Court .... and restore the proceedings back to the high court for disposal on merits. We request the high court to take up the proceedings for early disposal preferably within a period of two months from the date on which the certified copy of this order is placed on records, it said.

The bench clarified that since it has restored the proceedings before the high court for fresh consideration, it has not expressed any opinion on the merits of rival contentions.

The top court was hearing an appeal filed by the bank against the November 25, 2021 order of the Allahabad High Court refusing to quash the notices under section 102 CrpC and FIR lodged by the police.

Yes Bank said this was one of the most extraordinary cases where malafide criminal proceedings were initiated to scuttle the voting rights of the largest shareholder of the Essel Group.

The bank said that it had disbursed a loan of Rs 5,270 crore to the Essel Group and its sister concerns between 2016 and 2018 and 44.5 crore shares were pledged against it.

It had said the pledge was invoked by the bank and it became the largest shareholder of the company and to prevent the bank from voting in the Annual General Meeting (AGM), which was earlier scheduled to be held on November 30, 2021 to change or refuse to reappoint the directors, these notices were issued.

The Uttar Pradesh police, after lodging an FIR against the Bank at Gautam Buddha Nagar police, had issued two notices to the stock exchange and the National Securities Depository Limited (NSDL) asking them to not allow any transfer of shares of Essel group held by the bank.

The apex court, on November 30, 2021, stayed the police probe and the operation of two notices issued by the UP police to the stock exchange and the NSDL.

Using criminal procedure to achieve results of civil proceedings 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, it had said.

It cannot 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, it had said.

Prior to this, the high court had refused to entertain the plea of the Bank, saying it cannot entertain the petition under writ jurisdiction when equally efficacious remedies were available to the financial institution under the provisions of CrPC against police investigation.

The FIR against Yes Bank was lodged by Essel group founder Subhash Chandra over allegations of fraud in the merger transaction between Videocon D2H and Dish TV India.