TaxTMI 
TaxTMI 
2022 (9) TMI 1292
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Adv. Mr. Prateek Yadav, Adv. Mr. Anuj Berry, Adv. Mr. S. S. Shroff, AOR Mr. Kailash Vasdev, Sr.Adv. Ms. Anuradha Dutt, Adv. Ms. Suman Yadav, Adv. Mr. Tushar Jarwal, Adv. Ms. Neoma Vasdev, Adv. Mr. Shobhit Ahuja, Adv. Ms. B. Vijayalakshmi Menon, AOR Ms. Saman Ahsan, Adv. Ms. Srijata Majumdar, Adv. M/S. Khaitan & Co., AOR Mr. Sameer Parekh, Adv. Mr. Sumit Goel, Adv. Ms. Sonal Gupta,Adv. Mr. Manu Bajaj, Adv. M/S. Parekh & Co., AOR Mr. Faisal Sherwani, AOR Mr. vaibhav Kakkar, Adv. Mr. Sanjeev Sharma, Adv. Mr. Sahil Arora, Adv. Ms. Sanya Sud, Adv. Ms. Sanjukta Kaushik, Adv. Mr. H.S. Chandhoke, Adv. Mr. Saleem Hasan, Adv. Mr. Rohit Dahiya, Adv. Mr. Faisal Sherwani, AOR Mr. Sandeep Joshi, Adv. Mr. Sanjay Kumar Visen, AOR Mr. Anang Shandilya, Adv. Mr. Sanjeev Prakash Upadhyaya, Adv. Ms. Rity Rastogi, Adv. Mr. Aman, Adv. Ms. Mohini Kumari, Adv. Mr. Robin Khokhar, Adv. Mr. Aman Raj Gandhi, Adv. Mr. Dheeraj Nair, Adv. Ms. Vishrutyi Sahni,Adv. Mr. Mayank Pandey, Adv. Mr. G.N. Reddy, Adv. Mr. Vivek Jain, AOR Mr. Abhishek Agarwal, AOR Mr. Gagan Gupta, AOR Mr. Hardeep Singh Anand, AOR Mr. Pratap Venugopal, Adv. Mr. Akhil Abraham Roy, Adv. M/S. K J John And Co, AOR Mr. Sandeep Devashish Das, AOR ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that Fortis Healthcare Holdings Private Limited ("FHHPL") was a holding company under the control of the Respondents and the value of its shares was derived solely from the value of the downstream operating company- Fortis Healthcare Limited ("FHL"); and that FHL shares held by FHHPL were being sold/ encumbered by the Respondents. In said proceedings, an undertaking given by the learned counsel appearing for respondent Nos. 14 and 19 was recorded by the High Court in its order dated 21.06.2017 in following terms: "8. Since the petitioner has raised an issue with regard to the shareholding of Fortis Healthcare Holding Pvt. Ltd. in Fortis Healthcare Limited, the present order is being restricted to the value of the said unencumbered asset disclosed in the affidavit. 9. Learned Senior Counsel appearing for respondent no. 14 and 19 submits that the value of the unencumbered asset comprising of equity share in Fortis Healthcare Holding Private Limited has been disclosed as Rs.452.60 Crores by respondent no. 14 and Rs.1889.30 crores by respondent no. 19. 10. Learned Senior Counsel appearing on behalf of respondent no. 14 and 19 undertakes that, irrespective of any transaction th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... total sum awarded under the Arbitral Award dated 29 April 2016, and there would be no fait accompli. Mr. Kapil Sibal had also submitted that even recording of his personal statement in the order would affect the respondents' interest in the share market as some of his clients are listed in stock exchange." It appears that the respondents had urged before the Court that their assurance should not be recorded in the order of the Court, since that might affect the value of their shares in the share market. This was the first assurance given by the respondents to the High Court of Delhi. It would be pertinent to mention that the fact that such an assurance was made is also recorded in the order of the High Court dated 23.01.2017 wherein Mr. Harish N. Salve, learned senior counsel appearing for the respondents 1 to 4 and 13 therein reiterated the assurance given to the Court as recorded in the letter dated 24.05.2016. The second assurance 5. On 25.07.2016, the High Court of Delhi passed an order directing the respondents to disclose the details of their immovable assets and also to disclose the details of assets that have been alienated and encumbered to third parties. It appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Respondents were in fact required to furnish the information relating to all the unencumbered assets, both moveable and immovable, and not merely investments and loans and advances." 7. On 06.03.2017 Dr. Abhishek Manu Singhvi and Mr. Rajiv Nayar, learned senior counsel appearing for the respondents made a statement that the complete details/particulars of all unencumbered assets would be filed before the Registrar within one week. Certificates of Chartered Accountants of the respondents were also directed to be filed giving the following details: - (i) "the value of all the unencumbered assets, including both movable and immovable assets of Respondents 14 and 19, both the book value as well as the fair value; (ii) where these assets include investments in equity shares, preference shares and debentures, to indicate to what extent are these investments in related/group entities of the Respondents and in companies whose shares are listed and which of these shares have a condition of right of first refusal. (iii) a clarification as to how much of the borrowings reflected in the balance sheets are secured by way of pari passu charge on the present and future current assets....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt and the application disposed of in terms of this statement. This effectively meant that the Court had restrained OIL and RHC from reducing their shareholding in FHL through FHHPL in any manner. Relevant portion of the order passed by the High Court of Delhi dated 19.06.2017 reads as follows: - "5. Learned Senior Counsel for respondent no.14 and 19 submits that they are not seeking to change the status of any unencumbered asset as disclosed to the court and by mere passing of the impugned resolution, the shareholding as disclosed, in terms of order dated 06.03.2017, shall not be affected. 6. The statement is taken on record. 7. In view of the above statement, the application is disposed of." This was the fourth assurance given by the respondents." 4. While dealing with said Special Leave Petition (Civil) No.20417 of 2017, the proceedings arising from the order dated 21.06.2017 and the orders passed by this Court were noted by this Court in the Judgment as under: "Proceedings before this Court 13. The order dated 21.6.2017 of the Delhi High Court was challenged by the petitioner before this Court and the main contention of the petitioner was that despite the re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er of this Court dated 11th August, 2017 was intended to be in respect of both the encumbered and unencumbered shares of Fortis Healthcare Limited held by Fortis Healthcare Holding Private Limited. Consequently, there will be no transfer of the shares to the extent indicated above. Parties may complete the pleadings in the meantime. As we have now clarified the previous order of this Court dated 11th August, 2017 no case for contempt is made out. However, it is needless to say that the present order and the above clarification would govern the rights of the parties henceforth. The contempt petition is accordingly disposed of." 16. On this date, the contempt petition was disposed of and at the same time it was mentioned that the order and the clarification contained therein would govern the rights of the parties henceforth. The order dated 11.08.2017 and 31.08.2017 were later clarified by this Court vide order dated 15.02.2018 which reads as follows:- "Having heard the learned counsels for the parties, we clarify our interim orders dated 11th August, 2017 and 31st August, 2017 to mean that the status quo granted shall not apply to shares of Fortis Healthcare Limited h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....09.2018 IHFL transferred 6,00,000 shares of FHL held by FHHPL. When RHC came to know about these transfers, it immediately informed IHFL that transfers were in violation of the orders passed by this Court on 11.09.2017. Despite the communication dated 11.09.2018, IHFL continued to transfer shares of FHL held by FHHPL on 11.09.2018, 12.09.2018, 14.09.2018, 17.09.2018 and 18.09.2018. On 24.09.2018, this Court was informed that IHFL had transferred 12,25,000 shares held by FHHPL in FHL in violation of the Court's orders. As on 29.09.2018, another transaction of 9,04,760 shares had taken place. The main issue is whether 12,25,000 shares were encumbered or not. 23. FHL is a public company and being a listed company, it has to disclose its shareholding patterns to the stock exchange. A chart showing share holding pattern of FHHPL in FHL will show the position of holdings at various stages: S. No. Quarter Ending Total Shares Encumbered Shares Unencumbered shareholding of FHHPL in FHL 1 September 2016 32,50,91,529 27,21,59,955 5,29,31,574 2 December 2016 32,50,91,529 25,22,63,248 7,28,28,281 3 28th Jan 2017 32,50,91,529 25,19,23,248 7,31,68,281 4 March 2017 27....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of the orders of the courts. 27. We shall now deal with the issue as to whether IHFL and IVL had violated the orders of this Court or not? To decide this issue, it would be appropriate to determine whether IHFL transferred any shares which were not encumbered up to 14.08.2017. 28. This brings us to the shareholding pattern of FHL for the period between 01.07.2018 and 30.09.2018 because it is during this period that IHFL transferred the shares. According to IHFL these 12,25,000 shares stood pledged with them. Neither in I.A. No. 109493 of 2017 nor in the reply filed by contemnor nos. 1-8, is there any clear-cut statement as to how and when the different pledges were created. Reference has been made to loan documents of 2016 and also to the pledge of 14.08.2017. According to alleged contemnor nos. 1 to 8, FHL was maintaining a demat account with IVL. The case set up is that when the value of the shares of IHFL fell in the market, to make the security equal to the outstanding due to IHFL, further shares were transferred by IVL to IHFL. It is urged that this was done in view of the instructions given prior to 11.08.2017 by FHHPL to IVL and IHFL. These transfers were done on th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es were transferred on the basis of pre-signed slips or delivery instruction slips based on the power of attorney but the fact remains that the official record shows that these shares were not encumbered and the contemnors have failed to place any cogent material on record to show that these 12,25,000 shares were pledged on or before 31.08.2017. 31. IHFL, in fact, flagrantly violated this Court's orders and made various transactions transferring even unencumbered shares. The best course available to IHFL would have been to approach this Court seeking a clarification before it made the transfers. This they did not do. We are, therefore, clearly of the view that IHFL and IVL and their officials i.e. contemnor nos.1 to 8 knowing fully well that this Court had passed an order directing status quo to be maintained with regard to the holding of FHHPL in FHL, violated the order. There can be no manner of doubt that IHFL and IVL have violated these orders and, therefore, we find contemnor nos.1-8 who are active directors of IHFL and IVL guilty of knowingly and wilfully disobeying the orders of this Court and find them guilty of committing Contempt of Court. We will hear them on the ques....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....08.2017 may be limited to the shares other than those which already stood pledged to banks and financial institutions. Though separate applications have been filed, Paragraph 25 of both the applications are identical and has been quoted hereinabove. 36. These applications were filed on affidavit and it has held out to this Court that if the order dated 11.08.2017 is limited to unencumbered shares it would have no impact on the availability of funds to protect the interest of the petitioner. On the basis of this statement, the order dated 31.08.2017 was passed and this Court took a lenient view on the matter and disposed of the contempt without taking any action. 37. Unfortunately, the actions of these contemnors clearly show that these statements were made without the least intention of complying with them. These contemnors had already prepared a well thought out scheme of diluting their shareholdings directly or indirectly in FHL to defeat the rights of the petitioner. 38. The explanations provided are not worth consideration. According to SMS he was not even taking part in the administration of these companies and had gone into religious service. This is belied from the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es or tends to scandalize or lower or tends to lower the authority of the Court. Criminal contempt also means any act which prejudices or interferes or tends to interfere with the due course of judicial proceedings. As far as the present case is concerned, the conduct of contemnor nos.9 and 10 definitely undermines the authority of the Court. We are dealing with an international arbitration which has fructified into an award but by misusing the legal process contemnor nos.9 and 10 have successfully avoided paying off the petitioner. In our view, action for committing criminal contempt could have been taken against contemnor nos. 9 and 10, but by taking a lenient view of the matter we are only treating it as a civil contempt. 41. The order passed by this Court on 11.08.2017 with a clarification on 31.08.2017, and modification made on 15.02.2018, is not to be read in isolation but along with the solemn undertakings and assurances given by the contemnors on as many as five occasions before the Delhi High Court, the last one being as late as on 21.06.2017. These assurances were to the effect that even if the Court permits sale of encumbered shares for payment of debt, it would not h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding and adhered. 44. There can be no manner of doubt that contemnors 9 and 10 have changed the shareholding of FHHPL in FHL knowingly and wilfully. They have done this with a view to defeat the rights of the petitioner. They have also wilfully and contumaciously violated the orders of this Court dated 11.08.2017, 31.08.2017 and 15.02.2018. They are accordingly held guilty of committing contempt of court. We shall hear them on the question of sentence. We give one chance to the contemnors no.9 and 10 to purge themselves of the contempt. 45. On 21.06.2017, a statement was made on behalf of contemnor nos. 9 and 10 before the High Court of Delhi that in respect of any transaction that these respondents may enter into, a sum of Rs.2341.90 crores i.e. Rs.452.60 crores of OIL and Rs.1889.30 crores of RHC would always be made available and realizable from the assets of the company. We, therefore, direct that in case each of the respondents deposits a sum of Rs.1170.95 crores i.e. 50% of Rs.2341.90 crores in this Court within eight weeks from today then we may consider dealing with them in a lenient manner. Violation of order dated 14.12.2018 46. It was also argued that contemn....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e shows that SMS, MMS, their family members, FHHPL, FHL and RHC virtually owned the RHT trust. That situation has now changed and now the situation is such that the companies/associations of which MMS and SMS are partners are no longer visibly present and there are other persons who are there. When and how the holdings in RHT trust were transferred by various people is a matter which is required to be gone into." 8. Having found the contemnor Nos.9 and 10 and the entities RHC, OIL and FHL guilty of violating the assurances given to the Court, this Court directed in the Judgment as under: "51. In view of the above discussion, we, dispose of this contempt petition in the following terms: - (i) We find Sameer Gehlaut, Director of Indiabulls Housing Finance Limited and Director of Indiabulls Ventures Limited (Contemnor Nos.1 & 5), Gagan Banga, Director of Indiabulls Housing Finance Limited and Director of Indiabulls Ventures Limited (Contemnor Nos.2 & 6), Ashwini Kumar Hooda, Director of Indiabulls Housing Finance Limited (Contemnor No.3), Sachin Chaudhary, Director of Indiabulls Housing Finance Limited (Contemnor No.4), Divyesh Bharat Kumar Shah, Director of Indiabulls Ventures....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of paragraph 51 quoted above, the amount of Rs.17,93,40,000/- having been deposited by Contemnor Nos.1 to 8, it was held by this Court in its order dated 18.12.2019 that said Contemnors had purged themselves of the contempt and the matter was therefore closed as against them. 10. The Special Leave Petition and the Contempt Petition along with Suo Motu Contempt Petition No.4 of 2019, registered pursuant to direction (iv) in paragraph 51 as quoted above, were then taken up for hearing. By order dated 11.2.2021, this Court issued notice to 17 Banks/ Financial institutions with whom certain financial transactions were entered into by the Contemnors and companies under their control; and some of the shares were pledged to them, so that the version of said Banks/ Financial institutions could be taken into account. 11. The Order dated 18.02.2021 passed by this Court noted the submissions advanced on behalf of the Contemnors, Noticees and Daiichi, whereafter certain directions were passed by this Court as under: - "7. Mr. Kailash Vasdev, learned Senior Advocate, appearing for one of the contemnors had invited our attention to the affidavit filed on behalf of Respondent No. 14 in compl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hares without any reference to or action from either Respondent No. 14 or Respondent No. 19. 9. In the circumstances, notices were issued to various banks/financial institutions as detailed in the order dated 11.02.2021. 10. Appearing for some of the banks/financial institutions, Mr. Shyam Divan and Mr. Ramji Srinivasan, learned Senior Advocates; and Mr. Jayant Mehta, Mr. Sanjay Gupta and Mr. Sharma, learned Advocates, submitted inter alia that the issue was already gone into by this Court and that there were no pleadings to which any response could be filed by the concerned banks/financial institutions. 11. In reply, Mr. Rakesh Dwivedi, learned Senior Advocate invited our attention to the chart set out in paragraph 23 of the Order, to submit that first three entries of the chart disclose that the total number of shares remained constant at 32,50,91,529; and that after the assurance was given on 23.01.2017 by the concerned respondents before the High Court of Delhi (marked as second assurance in paragraph 5 of the Order), not only the total number of shares started dwindling but the number of unencumbered shares went down from 7,31,68,281 to 6,01,607, as stated in the char....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9. A proposal which is under discussion may involve the sale of 29,00,000 equity shares of SRL Limited held by Respondent No.19 and 7.05,000 equity shares of SRL Limited held by Malav Holding Private Limited (Respondent No.15) to external investors in the near future. These shares of SRL Limited are encumbered and thus not included in the value of unencumbered assets mentioned at paras (4) & (5) above. Obviously this will have to be after obtaining the consents of the security holders. The proceeds of such sale will have to be utilized to pare down the debt - the net assets of the Respondents will thus remain unchanged. The shares being sold [36,00,000] which are below 5% of the share capital of SRL will be sold to an external investor. The further proposal under consideration is to merge SRL with another listed group company at a later point of time. Even if this does take place, this will have no implications on the next assets of the Respondents. 8. There are proposals to issue further capital in the downstream companies [below Respondent No.19]. The net result of issue of shares will be accretion in the value of the shares of the upstream company. The promoters would continu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'. He submitted that no such project had come up and the amount of Rs.350/- crores through successive transactions, was siphoned away. What kind of due diligence was undertaken by the banks/financial institutions while extending the loan facility must therefore be brought on record. 14. Both the learned Senior Counsel submitted that with various orders passed by the High Court and this Court, the concerned individuals and corporate entities could not sell the shares held by FHHPL directly and, therefore, a device was employed and the arrangement was so structured that the shares were proceeded against by the banks and financial institutions. It was submitted that the banks/financial institutions had intervened in the matters pending before this Court, that they were definitely aware of the Award granted in favour of M/s. Daiichi Sankyo Company Limited; and that the role of banks and financial institutions would, therefore, require closer scrutiny. 15. In the premises, for the present, we direct all the noticee banks and financial institutions: - "(a) to place on record the basic documents pertaining to loans advanced or financial accommodations extended in respect of which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts run into more than 200 volumes. The broad outline of submissions advanced on behalf of the Noticees is to the following effect that for various financial accommodations/ loans taken by the companies directly or indirectly under the control of Contemnor Nos.9 and 10, shareholding of FHHPL in FHL was pledged as collateral security with authorisation in favour of the Noticees to sell those shares in open market to protect the interest of the Noticees if the value of the security was getting reduced or diminished. Various transactions have been referred to in the responses filed on behalf of the Noticees and relevant documents in support have been placed on record. 14. A comprehensive list of dates and events emerging from the documents so placed on record by the Noticees is tabulated hereunder. The abbreviations used in the list of dates are as under: - Axis Bank Limited (ABL) Ambit Finvest Private Limited (Ambit) Credit Suisse Finance (India) Pvt. Ltd. (CSFIPL) Dion Global Solutions Ltd. (DION) ECL Finance Ltd. (ECL) Finserve Shared Services Limited (FSSPL) FHL (Fortis Healthcare Limited) FHHL (Fortis Healthcare Holding Limited) Fortis Healthcare Holdin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....building C. Unconditional and irrevocable corporate guarantee of M/s Torus Buildcon Pvt. Ltd. till the end of the tenor of the facility. Vol. 178, Pg.18 Rs.100 Crores Loan extended by YBL to RAL against: A. First Pari Passu charge on Current Assets and Moveable Fixed Assets of the Borrower (both present and future). 03.08.2013 06.08.2013 B. Exclusive Charge on con1rnercial land (admeasuring - 10.35 acre at Sector 62, Golf course extension, Gurgaon) road owned by RS Infrastructure Pvt Ltd. ensuring cover of 1.33x C. Unconditional and Irrevocable Corporate Guarantee of RS Infrastructure Private Limited to remain valid during the entire tenor of the facility. Vol. 175, Pg.543, 592 D. Non-Disposal Undertaking from Lowe Infra and Wellness Private Limited for their entire shareholding in RS Infrastructure Private Limited. E. Debt Service Reserve Account (DSRA) equivalent to three months interest payment shall be created upfront in the form of lien marked Fixed Deposit with YBL Rs.10 Crores remains outstanding from this borrower as on 23.03.2021....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tees from Singh Brothers Assignment of insurance of the aircraft in favour of lender Vol. 168, Pg.230 30.06.2014 10,00,000 FHL shares pledged in favour of ABL to secure credit facility of Rs.100 Crores Vol. 168, Pg.252 26.09.2014 RBL issued Modified Sanction Letter, requesting pledge of FHL Shares. Vol. 178, Pg.41 30.09.2014 Standby Letter of Credit for Rs.220.5 Crores extended by YBL to LVL. This facility was closed on 27.09.2016. Vol. 200, Pg.3 Sep'2014 Standby Letter of Credit for USD 72.5 mn executed between RCMIML and ABL. 75,00,000 FHL shares pledged in favour of ABL. Vol. 197, Pg.2 08.10.2014 * Credit Facility dated 27.07.2012 stood enhanced to Rs.63.75 Crores [Rs.33.75 Crores + 8 Crores + 15 Crores + 7 Crores) by RBL against following securities: First pari passu charge on all current assets and movable fixed assets including the security deposits of the company, both present and future. Unconditional and irrevocable corporate guarantee of RHC, and same to remain outstanding during currency of RBL Loan Vol. 178, Pg.43 15.10.2014 52,04,000 FHL Shares pledged by FHHPL in favour of RBL [w.r.t. 26.09.2014] Vol. 178, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Limited Vol. 104, Pg.352 27.11.2015 46,30,000 FHL Shares released by YBL [w.r.t. 16.10.2015] Vol. 200, Pg.6 27.11.2015 38,28,000 FHL Shares pledged in favour of YBL to secure facilities extended to LAL (Rs.100 Crores) + HTL (Rs.200 Crores) + LVL (Rs.220.5 Crores + Rs.130 Crores) Vol. 174, Pg.211 This facility was closed. Vol. 200, Pg.7 12.01.2016 Credit Facility dated 27.07.2012 modified by RBL to Rs. 52.50 crores (Rs.22,50,00,000 + 15,00,00,000 + 8,00,00,000 + 7,00,00,000) Vol. 178, Pg.56 18.02.2016 Release of 11,00,000 FHL Shares by RBL [w.r.t. 29.11.2012] Vol. 201, Pg.3 11.03.2016 * Credit Facility [w.r.t. 27.07.2012] enhanced by RBL by Rs.40 crores against pledge of FHL shares to the extent of 1.40 X of facility amount with following security: First pari pasu charge on all current assets and movable fixed assets of the company, both present and future and Pledge of shares of REL and FHL to the extent of 1.40 X of the facility amount Vol. 178, Pg.59- 64 11.03.2016 30.09.2015 Facility by LVB continued for Sanction Letter dated 29.10.2015 Vol. 202, Pg.2 14.03.2016 Credit Facility Agreement containing a top ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....BL had a right to call upon FHHPL to pay any amount due to YBL Vol. 200, Pg.9, 44 27.07.2016 91,43,554 FHL Shares were encumbered in favour of YBL to secure Put Option Vol. 200, Pg.10 Vol. 175, Pg.424 28.07.2016 Cross Collateral by YBL over 2,65,02,852 FHL Shares [w.r.t. 30.03.2016] to secure LVL [Rs.304.5 Crores] Facility Vol. 175, Pg.401 22.08.2016 Submission before the Delhi High Court by the Respondents that there is no change in ownership of assets (Second Undertaking) Vol. 1, Pg.87 26.08.2016 Cross Collateral by YBL over 1,05,50,000 FHL Shares [w.r.t. 02.05.2014] to secure LVL [Rs.304.5 Crores] Facility Vol. 173, Pg.160 26.08.2016 Cross Collateral by YBL over 1,99,00,500 FHL Shares [w.r.t. 20.02.2015, 05.06.2015, 11.09.2015, 27.11.2015, 15.03.2016] to secure LAL (Rs.100 Crores), LVL [Rs.304.5 Crores], LVL (Rs.130 Crores), HTL (Rs.200 Crores) Facility Vol. 174, Pg.240, 252 30.08.2016 7,25,000 FHL Shares pledged in favour of LVB against 26.10.2016 Facility Vol. 202, Pg.2 30.09.2016 20,00,000 FHL shares additionally pledged in favour of ABL w.r.t. Standby Letter of Credit for USD 72.5 mn executed between ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Delhi High Court Order recording Respondents' undertaking (Fifth Undertaking) Vol. 1, Pg.143 15.02.2017 Pledge over 58,31,000 FHL Shares recorded in favour of YBL Vol. 174, Pg.255 23.02.2017 OIL paid back Rs.339 Crores to YBL against loan sanctioned on 20.02.2015 Vol. 224, Pg.6 28.02.2017 Affidavit filed by Daiichi Sankyo annexing a list of all outstanding charges of all Respondent Companies in the Enforcement Petition till 27.02.2017 per filings with Ministry of Corporate Affairs Vol. 1, Pg.211- 2281 06.03.2017 Sixth Undertaking furnished before the Delhi High Court by the Respondents 09.03.2017 Amendment to 27.07.2016 Put Option Agreement between FHHPL & YBL, recording that Put Option Right would now also cover an additional facility of OIL (Rs.565 crores) Vol. 200, Pg.63 09.03.2017 Top up Pledge over additional shares of REL created in favour of Ambit due to margin shortfall Vol. 159, Pg.96 09.03.2017 Cross Collateral by YBL [w.r.t. 02.05.2014] over 1,05,50,000 FHL Shares to secure Put Option w.r.t. RHC (Rs.300 Crores), LAL (Rs.100 Crores), HTL (Rs.200 Crores), LVL (Rs.304.5 Crores), Dion (Rs.130 Crores), OIL (565 Crore....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 159, Pg.95 07.06.2017 Release of 1,06,50,000 FHL Shares by ABL [w.r.t. 28.03.2014] Vol. 197, Pg.84- 92 07.06.2017 Pledge Agreement in respect of 22,00,000 FHL Shares already encumbered in favour of RBL w.r.t. 29.11.2012 to also secure credit facility w.r.t. 27.07.2012 Vol. 178, Pg.92 15.06.2017 Pledge Agreement to create a Cross Collateral over 1,42,00,000 FHL Shares already pledged [w.r.t. 30.09.2016] to secure Ligare Facilities Vol. 168, Pg.294 15.06.2017 Pledge Agreement to create a Cross Collateral over 1,42,00,000 FHL Shares already pledged [w.r.t. 19.05.2017] to secure DION Facility Vol. 170, Pg.695 15.06.2017 Pledge Agreement to create a Cross Collateral over 1,42,00,000 FHL Shares already pledged [w.r.t. 19.05.2017] to secure DION Facility Vol. 170, Pg.718 19.06.2017 Seventh Undertaking before the Delhi High Court by the Respondents 21.06.2017 Eighth Undertaking before the Delhi High Court by the Respondents [Order under challenge in the present SLP] 20 -23.6.17 Release of 60,00,000 FHL Shares by ABL [w.r.t. 30.09.2016] Release of 18,25,000 FHL Shares by ABL [w.r.t. 30.09.2016] Vol. 197,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....;Vol. 170, Pg.741 18.07.2017 LVB sold 5,00,000 FHL shares and realised Rs.7,44,96,752 Vol. 202, Pg.4 18.07.2017 Cross Collateral over 1,05,50,000 FHL Shares [w.r.t. 02.05.2014] to secure LAL Facility by YBL (Rs.150 Crores) Vol. 173, Pg.176 18.07.2017 Cross Collateral over 2,57,31,500 FHL Shares [w.r.t. 20.02.2015, 05.06.2015, 11.09.2015, 27.11.2015, 15.03.2016, 30.03.2016] to secure LAL Facility by YBL (Rs.150 Crores) Vol. 174, Pg.260 18.07.2017 Cross Collateral over 2,65,02,852 FHL Shares [w.r.t. 30.03.2016] to secure LAL Facility by YBL (Rs.150 Crores) Vol. 406, Pg.175 18.07.2017 Pledge invoked against 5,00,000 FHL Shares by LVB Vol. 202, Pg.4 19.07.2017 Pledge invoked against 2,80,000 + 7,25,000 + 38,95,000 FHL Shares by LVB Vol. 202, Pg.4 19.07.2017 LVB sold 11,00,000 FHL shares and realised Rs.16,61,19,096 Vol. 202, Pg.4 19.07.2017 LVB sold 10,00,000 FHL shares and realised Rs.15,20,65,630 Vol. 202, Pg.4 19.07.2017 LVB sold 5,50,000 FHL shares and realised Rs.8,29,46,812 Vol. 202, Pg.4 19.07.2017 LVB sold 10,00,000 FHL shares and realised Rs.15,06,83,015 Vol. 202, Pg.4 21.07.2017 RHC repaid Ambit's entire outstanding Vol. 231, Pg.2 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... its pledge over 8,97,81,906 FHL Shares Vol. 200, Pg.16 20.02.2018 ABL invoked its pledge over 1,83,75,000 Shares Vol. 197, Pg.10 20.02.2018 RBL sold 33,75,000 Shares and realised Rs.47,04,11,504 Vol. 201, Pg.11 01.03.2018 Pledge over 16,500 FHL shares released by Ambit Vol. 101, Pg.159 March' 18 Invocation of pledges held by various banks caused fall in shareholding of FHHPL in FHL from 71.7% to 0.66% Vol. 1, LOD filed by Kunal Chhaterji Pg.28 24.05.2018 RBL sold 80,000 Shares and realised Rs.1,14,54,502 RBL left with 4,20,000 Shares Vol. 201, Pg.11 Jun-Sep'18 Board of Directors of Religare entities were reconstituted and initiated insolvency proceedings against 23 entities which owed Rs.2,300 crores Vol. 227, Pg.28 13.07.2018 Share Subscription Agreement executed between FHL and IHH Vol. 1, LOD filed by Kunal Chhaterji Pg.36 24.09.2018 RHC Holdings' Affidavit informing this Court about violation of 11.08.2017 SCI Order by IHFL havin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....int filed by RFL on 15.05.2019 Vol. 227 @ Pg.30 15.11.2019 This Court held Singh Brothers and officials of IFHL guilty of contempt Vol. 226, Pg.4 06.01.2020 Chargesheet in FIR 50/2019 filed by EOW Vol. 120 @ Pg.131 03.02.2020 This Court granted time to Singh Brothers to come up with proposal to purge contempt Vol. 226, Pg.5 23.03.2020 Chargesheet in FIR 189/2019 filed by EOW Vol. 121 @ Pg.269 15.10.2020 Delhi High Court judgement 12.11.2020 SEBI passed order directing initiation of adjudication proceedings against 10 entities for diversification of funds Vol. 211 @ Pg.9 11.02.2021 Notice Issued to Lenders - Banks and Financial Institutions by this Court 18.02.2021 Questions posed to Lenders by this Court [18.02.2021 Order] 15. The submissions advanced on behalf of the concerned Contemnors, Respondents, Noticees and other parties, with salient points are in the following volumes: - A. Volume 126: Submissions by Securities ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 173 - 177, 199, clarified that it had created no encumbrances over FHL Shares post 11.08.2017, and subject encumbrances were invoked only pursuant to 15.02.2018 Order by SCI YBL was not a party before the Delhi High Court when the assurances were given by the Judgement Debtors YBL is not a judgement debtor qua the Petitioner YBL has several recovery proceedings pending against the JDs FHHPL, under various pledge agreements with YBL, gave a representation that there was no litigation pending qua the FHL Shares. No personal guarantee obtained from SMS Cross Collateralization is not creation of fresh encumbrances Q. Volume 228: Axis Bank Limited A clean chit had been given to ABL Vol.197 Filed No Top Ups created by ABL Cross Collateralization Agreements only in relation to Pledges that were already encumbered and as per standard industry lending practices ABL invoked all pledges after 15.02.2018 Order R. Volume 162/229: Submissions by Lakshmi Vilas Bank (Noticee No.17): No notice of proceedings Bonafide Transactions(s) with Ranchem Pledging and Invocation of Pledge on Shares of FHL S. Volume 230: Submissions on behalf of Daiichi Sankyo ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bmissions filed by Daiichi, the roles of the Judgment Debtors as well as of various entities were specifically dealt with as under: "A. Judgment Debtors: I. The Petitioner filed SLP [Vol 1and2] on 22 June 2017 [SLP Vol I and 2]. Mr. Rakesh Dwivedi, Senior Advocate, made submissions on behalf of the Petitioner [SLP Vol 221, 223], inter alia, against arguments made by counsel for MMS and SMS (Mr. Kailash Vasdev and Ms. Meenakshi Arora, respectively). Petitioner has also specifically responded to this Hon'ble Court's query regarding the pleadings against Judgment Debtors in the Contempt Petition [SLP Vol 217] on the basis of which the Contempt Judgment was passed, against them. 2. The Judgment Debtors were given full opportunity to respond and defend their case before this Hon'ble Court. MMS and SMS filed separate replies to the SLP and the Contempt Petition. MMS filed its reply affidavit in SLP dated 13 March 2019 (SLP Vol 54, 55) and SMS filed its reply to SLP on 12 March 2019 (SLP Vol 53). MMS also filed its reply to Contempt Petition (SLP Vol 59). In addition, MMS filed a sur-rejoinder in the Contempt Petition (SLP Vol 65). SMS also filed a sur-rejoinder in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for purging of contempt, the Petitioner has proposed certain reliefs against the Judgment Debtors: ([SLP Vol 222/Page 2-4] B. Banks and Financial Institutions 5. The Petitioner, pursuant to the Contempt Judgment, in its response to reply filed by FHL in the SMC [SMC Vol 26/Page 27- 37], apprised this Hon'ble Court of the creation of pledges and the exercise of top-ups by banks and financial institutions in collusion with MMS, SMS, other Judgment Debtors, IHH Healthcare Berhad and FHL, which ultimately led to the dilution of the controlling shareholding of OIL and RHC (through FHHPL) in FHL. 6. Thereafter, Mr. Arvind P. Datar, Senior Advocate, on behalf of the Petitioner, by way of oral submissions and brief written submissions - filed on 17 February 2021 [SLP Vol 157], informed this Hon'ble Court that wrongful pledges were created after the first assurance was given to the DHC on 24 May 2016. Since these pledges were created in violation of court orders, Mr. Datar requested this Hon'ble Court to pass orders to, inter alia, restore the status quo ante in respect of the shareholding of FHHPL in FHL, as on 24 May 2016, and to restitute the Petitioner in respect of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en to the DHC by the Judgment Debtors and are, therefore, guilty of a deliberate and wilful violation of the orders of the DHC. 9. Following detailed oral submissions by Senior Counsel on behalf of the banks and financial institutions - Mr. Shyam Divan (Yes, Axis and IHFL), Mr. Gopal Jain (L VB, Julius Baer and First Gulf), Mr. Pinaki Mishra (Credit Suisse), Mr. Ramji Srinivasan (Ambit Finvest) and Mr. Amit Sibal (ECL Finance), the Petitioner filed its rebuttal/rejoinder submissions on 12 May 2021 [SLP Vol. 221/11/10- 16, 24-103]. Mr. Dwivedi also made extensive oral submissions rebutting the submissions made by the banks and financial institutions. For the convenience of this Hon'ble Court, Mr Dwivedi categorized the banks and financial institutions into the following three categories: (i) Category I: Eight banks that have wilfully violated the orders and assurances given to the DHC as well as to this Hon'ble Court should be issued a notice of contempt [SLP Vol 221/Page 47-64]; (ii) Category II: Four banks that have released shares and have sold no shares after 24 May 2016 [SLP Vol 221/Page 65-71]; and (iii) Category III: Four banks and financial institutions w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fidavits were filed by the Judgment Debtors both in the DHC as well as before this Hon'ble Court; and (iii) this Hon'ble Court had been deliberately misled by the Judgment Debtors, and banks and financial institutions to obtain a modification on 15 February 2018 of the status quo orders dated 11 August 2017 and 31August 2017. 13. The Petitioner also filed an application for directions (I.A. No. 8948 of 2019) in the Contempt Petition on 15 January 2019, upon learning that, despite this Hon'ble Court's order dated 14 December 2018, the transaction of transferring the controlling stake in FHL to IHH was proceeding ahead and the amount of INR 4000 crores received by FHL was being transferred to RHT Trust, in which the Singh Brothers and Judgment Debtors had a substantial interest. The Petitioner had prayed in this application that the transfer of funds to RHT be injuncted until the undertaking recorded in DHC order dated 21 June 2017 was fulfilled/satisfied, and also to ensure compliance with the order dated 14 December 2018. [SLP Vol 45/page 9-19]. 14. The Petitioner filed another application for directions (IA No. 15162 of 2019) in the Contempt Petition on 24 Ja....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pt, the Petitioner has proposed certain reliefs against Fortis Healthcare Limited and IHH Healthcare Berhad [SLP Vol 222/Page 6]. D. RHT Trust, Singapore 18.Mr. Datar made oral submissions regarding the FHL-IHH-RHT transaction. In a nutshell, the submissions were as follows: (i) Mr. Gurinder Singh Dhillon and Mr. Gurpreet Singh Dhillon are unitholders of RHT. Mr Gurpreet Singh Dhillon was an executive director and chief executive officer of RHT [SLP Vol 26/Page 61- 62]; (ii) FHL-IHH-RHT transaction was initially negotiated in 2017 between the Singh Brothers and IHH [SLP Vol 26/Page 37]; and (iii) FHL-IHH-RHT transaction was undertaken at the behest of and for the mutual benefit of the Singh Brothers, FHL, IHH and various banks and financial institutions [SLP Vol 26/Page 43]. It should be noted that Mr. Gurinder Singh Dhillon and Mr. Gurpreet Singh Dhillon are close relatives of the Singh Brothers and it is probable that the Dhillon family (of which Mr. Gurinder Singh Dhillon and Mr. Gurpreet Singh Dhillon are members) also benefitted from the FHL-IHH-RHT transaction. 19. In response to this Hon'ble Court's query regarding the proposal for purging of contempt, the P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Withdrawal of INR 17,93,40,000 deposited by Contemnor Nos. 1- 8 (IHFL and IVL, and its directors) ("Contempt Deposit") in compliance with the direction contained in paragraph 51 (i) of the Contempt Judgment. Mr. Jaideep Gupta, Senior Advocate, made submissions on behalf of Daiichi on 12 May 2021. He submitted that the Petitioner is entitled to receive the Contempt Deposit and, hence, it should be permitted to withdraw the Contempt Deposit, as prayed for in IA No. 50764 of 2020 in the Contempt Petition. [SLP Vol 91]. 24. The Contempt Deposit was made as a result of the contemptuous conduct of the contemnors that has severely affected the interest of the Petitioner. No third parties can claim a share in the deposit made by a party committing contempt of protective orders passed in favour of the Petitioner. Further, these are monies deposited in contempt proceedings and Section 73 of the Code of Civil Procedure, 1908 is not applicable in these proceedings." 19. In support of the contention that IHH / NTK be directed to put the funds back in FHL, it was submitted that matter raised following questions: "(i) Whether Fortis Healthcare Limited/ IHH etc. in remitting the sum of appr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Singh Brothers. (b) The manner in which the shareholding of Fortis Healthcare Holding Private Limited ("FHHPL") in FHL was reduced from 71.1 % to 0.66% was in complete violation of eight undertakings given to the Delhi High Court and to the Supreme Court and could not have been done without the active knowledge of the banks and IHH. (c) Apart from specific pleadings, the conspiracy is also revealed from the extensive pleadings in these matters and the role of the following entities: (i) Banks, which gave large amount of loans to group companies of the Singh Brothers without any scrutiny on end utilization of the loans (this has been explained by Mr. Rakesh Dwivedi, Senior Advocate) (ii) FHL and IHH Healthcare Berhad, in transferring INR 4000 crores in violation of the status quo order and to frustrate the decree. (iii) RHT Health Trust, Singapore, in participating in the transaction of receipt of INR 4000 crores from FHL and IHH, being transferred out of India in violation of the status quo order dated 14 December 2018. This was done while Mr. Gurpreet Singh Dhillon (maternal cousin of Singh Brothers) was the signatory and at the helm of the affairs of RHT. (d) T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpunity, it will be a serious setback to the rule of law and the image and the prestige of the superior judiciary in India. It is humbly stated that it should be made clear that if an undertaking is violated, particularly in the context of group companies, the High Courts and the Supreme Court have sufficient power under Articles 129 and 215 to pass whatever directions are necessary to ensure that the undertakings are fulfilled. Additional Q. No. 3: If FHL/ IHH is directed to bring back INR 4000 crores, whether Petitioner will be entitled to recover the award/ decretal amount from these funds? (a) In the answer to Question No.2 of the earlier written submissions [SLP Vol 185/Page 9], submissions have been made as to why it is imperative that INR 4000 crores should be brought back. The extraordinary and unseeming haste in sending INR 4000 crores outside India was in breach of the status quo order of this Hon'ble Court dated 14 December 2018. It is well settled that any act in violation of court's order is void and the status quo ante must be restored. [(i) Satya Brata Biswas v. Kalyan Kumar (1994) 2 SCC 266 (para 23 and pages 106-117 of SMC Vol 36 and (ii) Vidur lmpex and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taking given by the Singh Brothers would equally bind FHL. The systematic attempt to frustrate the undertaking should not be permitted. In the B.R. Cotton Mills case, it was held that under Article 142, the court could do complete justice and that the undertaking given by the director was an undertaking by the first respondent company would be treated as having committed contempt. In the same way, FHL may be equally bound by the undertaking. (i) Thus, the undertakings I assurance that a sum of INR 2341. 9 crores will always be available for satisfaction of the award amount will also be an undertaking on behalf of FHL. Once the undertakings were given on behalf of the group and was been made amply clear that FHL was the most valuable member of this group/ single economic entity, the undertakings are binding on all the entities on whose behalf the undertaking was given. Daiichi will be entitled to recover the amount by attaching assets of any of these entities, including FHL as well. (j) FHL cannot escape liability on the ground that it is a listed entity or that Singh Brothers along with their investment companies had less than 1 % shares of FHL on the date on which INR 4000 c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Luminous Holdings Pvt. Ltd. 5.07 4. Best Healthcare Private Limited Gurkirat Singh Dhillon 103.37 207.15 Gurpreet Singh Dhiilon 103.78 5. Adept Lifespaces Private Limited Gurkirat Singh Dhillon 85.58 152.88 Gurpreet Singh Dhiillon 67.30 Total 998.3 21. It was submitted by Contemnor No.10 - Shivendra Mohan Singh that he was neither involved in the management nor in the negotiations or talks in respect of any of the transactions entered into which was seriously being questioned. According to said Contemnor, it was his brother namely Contemnor No.9, who was completely responsible for all said transactions. 22. As the record shows, the bulk of the shareholding held by FHHPL in FHL was pledged with YES Bank Ltd. (YBL) and Axis Bank Ltd. (ABL). Mr. Shyam Divan, learned Senior Advocate advanced submissions on behalf of these two entities and took us through various documents placed on record. The preliminary submissions advanced on behalf of YBL were as under: "7. The crux of YBL's case is that 8,97,81,906 FHL shares were encumbered in favour of YBL, by 28.0....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Arbitration and Conciliation Act, 1996. (Paras 49 to 52, Pg. 37, Vol 173) 10. Further, all allegations of collusion between the JDs and YBL for the purpose of defeating Daiichi's rights are completely incorrect, meritless and baseless, and are unsupported by any evidence. This is also evident from the fact YBL has several recovery proceedings pending against the JDs and the borrowers before various forums for an outstanding amount of INR 532.9 Crore (excluding interest) (as of 22.02.2021). (Paras 43 to 46, Pg. 33, Vol.173) 11. Moreover, there were contemporaneous public disclosures made by FHL / FHHPL with the stock exchange concerning the Subject Encumbrances, thereby negating the argument that these encumbrances/ pledges were being created in a discreet and collusive manner. Additionally, it also appears that JD Nos. 14 and 19, in their affidavit of unencumbered assets dated 14.03.2017 had mentioned that 5 crore unencumbered shares of FHL held by FHHPL would be kept aside for repayment of debt obligations of the group companies (Para 4, Pg. 254, Vol 2, Pg. 444, 455, Vol 6). Furthermore, admittedly, neither the JDs nor Daiichi had ever informed YBL that there was any re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Vol 167) 10. Admittedly, FHHPL is not a judgment debtor qua Daiichi. Further, the Orders of the Hon'ble Delhi High Court and this Hon'ble Court make it clear that there was no injunction qua the shares of FHL held by FHHPL at any time prior to 11.08.2017. There was also no restriction on lending to the JDs or their group companies at any point of time. In fact, even the Hon'ble Delhi High Court vide its judgment dated 15.10.2020 passed in EA No. 615, 625 and 815 in OMP EFA 6 of 2016 (order upheld by this Hon'ble Court) ("15 October 2020 Judgment") has categorically held that there was neither any restriction on lending to the JDs nor was there any injunction qua the JDs' assets till 19.02.2018. The Hon'ble Delhi High Court's reasoning was based on the premise that the foreign arbitral award in favour of Daiichi became a decree only on 31.01.2018, after Daiichi's enforcement petition was allowed, in terms of Section 49 of the Arbitration and Conciliation Act, 1996. (Paras 45 to 48, Pg. 27 to 30, Vol. 167) 11. Further, all allegations of collusion between the JDs and ABL for the purpose of defeating Daiichi's rights are completely baseless, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n FHL was paying a huge amount of money by way of lease rentals. The liability to pay these lease rentals was affecting the financial health of FHL considerably and as such a decision was taken by the management to gain a proprietary interest in said assets rather than continue under the lease arrangement. It was for the purpose of acquisition of such proprietary interest that the amount of Rs.4,666/- crores was transferred by FHL in favour of RHT Trust. These transactions were completely bona fide and entered into for the purposes of securing and protecting the business structure and interest of FHL. In the written submissions the concerned events were set out as under: "2. As explained below, the events that took place were as follows: (a) Daiichi had initiated an arbitration against the Singh Brothers and others in relation to allegations of fraud in the sale of their shares of Ranbaxy Ltd. It is pertinent to note that the present transaction has no connection with that transaction. (b) Having secured an award in their favour, the Decree Holder then took to enforcing the award in India. In the course of these enforcement proceedings, undertakings were given on behalf of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xit FHL. (h) The consequence of the order of injunction passed on 14 December 2018 is to render this process of acquisition of shares of the members of the public in an Open Offer (as defined below) under a freeze. It is submitted that the injunction is not serving anybody's purpose and in fact, is contrary to the interests of the public shareholders. The only interest the Decree Holder has in pursuing this course of action is to try to pressurize IHH to pay them their decretal dues, for the reason that the prospects of recovery from the Singh Brothers (who are already in jail for non-payment) appear to be bleak." 24. In its response to the submissions made on behalf of the Contemnors regarding purging of Contempt, following submissions were made on behalf of Daiichi: "A. Judgment Debtors 1. As sought by the contemnor MMS in (and as proposed in) I.A. No.43119 of 2020, this Hon'ble Court may direct a forensic audit of the group companies of MMs and SMS identified in Vol. 90/Table A/pages 4 and 5 and the companies and individuals to which loans have been advanced by the judgment debtors and associate companies as set forth in Vol. 90/Table B/pages 6 and 7. Extracts from....
X X X X Extracts X X X X
X X X X Extracts X X X X
....any-owned by the Contemnors) 3. Fortis RHS Healthcare Management Services (group company-owned by the Contemnors) 5. As per SMS, an amount of US$ 10.89 million is available with Ligare Voyage (Ireland) Limited. Accordingly, this Hon'ble Court mat by pleased to direct the Contemnors deposit this amount, i.e., US$ 10.89 million held by Ligare Voyages, with this Hon'ble Court [Vol. 88/Page 7,9,33] TYPE OF ASSET ENTITY Cash in Bank [US$ 10.89 Mn] Ligare Voyages (Ireland) Limited 6. The request for the aforesaid sale of lands/properties given by MMS and SMS should be considered favorably by this Hon'ble Court, and a retired judge of this Hon'ble Court may be appointed to undertake this sale process in a time-bound manner. B. Banks 7. Banks and financial institution who have created additional pledges or exercised right of top-ups after 24 May 2016 (i.e., the date of the first assurance) have been instrumental in the systematic dilution of the FHL shares owned by FHHPL. The Judgment Debtors have deliberately pledged the shares in relation to (and as collateral for) dubious loans extended to the various group companies of FHL (owned and controlled by the Singh Brothers)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of the value of these shares (as on 11 May 2021). No separate suo motu contempt proceedings are required. 11. Axis Bank still retains 90,00,000 shares of FHL and these shares must be directed to be sold and the monies so realized must be deposited with this Hon'ble Court. 12. There was an unlawful top-up of shares by banks of: (i) 5,00,000 shares by First Abu Dhabi Bank on 31 May 2017 (Approx. value: INR 11,74,00,000 (Indian Rupees Eleven Crores Seventy-Four Lakhs Only)); and (ii) 1,10,00,000 shares by Axis Bank on 30 November 2016 (Approx. value: INR 11,77,25,000 (Indian Rupees Eleven Crores Seventy-Seven Lakhs Twenty-Five Thousand Only)). First Abu Dhabi Bank and Axis Bank should therefore be directed to deposit the aforesaid amounts equivalent to the value of the shares which were unlawfully topped-up in blatant violation of orders of the DHC and the SC. 13. This Hon'ble Court may allow Daiichi Sankyo to withdraw INR 17,93,40,000 deposited by Indiabulls on 18 November 2019 in compliance with the directions in the judgment dated 15 November 2019. Daiichi has filed I.A. No. 50764 of 2019 seeking withdrawal of these monies. [Vol.91] C. Fortis Healthcare Limit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....osure to the SGX dated 15 November 2017 that resulted in the transfer of a controlling stake in FHL to IHH. This was in breach of the assurances given to the DHC and the status quo order of this Hon'ble Court. E. Religare 1. Any IBC proceeding should be subject to the outcome of the contempt proceedings and orders passed by this Hon'ble Court. 2. No IBC proceeding should be admitted against the judgment debtors, Fern Healthcare Private Limited, Modland Wears Private Limited and ANR Securities Private Limited. 3. This Hon'ble Court may reserve the right of Daiichi Sankyo to raise all the arguments raised before this Hon'ble Court and the NCLT may be directed to examine all arguments without prejudice to any arguments under Section 65 of the IBC. 4. The proceedings against 23 entities initiated by Religare Finvest Limited, if permitted, will directly impact the outcome of the contempt proceedings." 25. In the backdrop of these submissions, following questions arise for our consideration: - (a) Whether the acts of commission or omission on part of Contemnor Nos.9 and 10 and the entities controlled by them, were calculated to put the assets of the companies under the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... placed on record but find ourselves unable to come to a definite conclusion whether there were antecedent arrangements which enabled said banks and financial institutions to keep attaching the shares and keep on converting large quantity of shares from the compartment of "unencumbered shares" to that of "encumbered shares" and thereafter keep disposing of said shares. We are also unable to come to a clear conclusion whether all those actions were protected by the order dated 15.02.2018 passed by this Court enabling the banks and financial institutions to sell encumbered shares. This exercise will require going into issues of fact, comparing of the documents and accounts as well as considering the expediency whether the shares were required to be sold in order to keep affording comfort and sufficient security to said banks and financial institutions. 28. It is true that it is possible for a court, while exercising jurisdiction in contempt, to pass consequential orders in the nature of sequestration orders to secure the properties which the contemnor had put beyond the reach of the court or which were acquired by the contemnor for himself or for any other person or entity by his w....