TaxTMI 
TaxTMI 
2026 (9) TMI 98
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....es for the Respondent Nos.2 to 5.) ORDER Per: Justice P.S. Dinesh Kumar, Presiding Officer This appeal is directed against order dated 14.02.2025 rejecting appellant's application seeking exemption from strict enforcement of Regulations 20(1) and 20(5) of the SEBI (SAST) Regulations, 2011 (SEBI (substantial Acquisition of Shares and Takeovers) Regulations, 2011) with respect to his competing offer to acquire Religare Enterprises Limited, a non-banking financial corporation (NBFC). 2. We have heard Mr. C. A. Sundaram, learned Senior Advocate for the appellant, Mr. Pradeep Sancheti, learned Senior Advocate for the SEBI and Mr. Pranav Badheka, learned Senior Advocate for the respondent Nos.2 to 5. 3. Brief facts of the case are, Religare Enterprises Limited ('REL' for short) is a listed Company and its shares are listed on BSE (BSE Limited) and NSE (National Stock Exchange of India Ltd.). It is also registered with Reserve Bank of India (RBI) as an NBFC (Non-Banking Financial Company). It has no identifiable promoter. 4. Three (M.B. Finmart Private Limited, Puran Associates Private Limited and VIC Enterprises Private Limited) private limited companies and another ent....
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....P SLP - Diary No.6576 of 2025 with an interim prayer for stay of Burman Group's open offer. On 07.02.2025, the Apex Court passed the following order: "1. The appellant, Digvijay Laxhamsinh Gaekwad (Danny Gaekwad) or their nominee/applicant before SEBI, as suggested by his counsel, shall deposit a sum of Rs. 600 crores in terms of the 2011 SEBI Regulations, in the form of cash and/or bank guarantee, on or before 12.02.2025. In case the amount is not deposited by the said date, the directions in the present order shall be automatically vacated without further reference to the Court. 2. The public offer, which is to close today, will be continued till 12.02.2025. In case the appellant, Digvijay Laxhamsinh Gaekwad (Danny Gaekwad) or their nominee/applicant before SEBI, deposits Rs. 600 crores in terms of the 2011 SEBI Regulations, the offer will continue till the end of third day post the date of the order to be passed by SEBI on the application of the appellants." 9. Subsequently, on 12.02.2025, the Hon'ble Supreme Court of India permitted the appellant to deposit Rs. 600 Crores vide the following order: "Without going into these controversies, we permit ....
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.... the appellant to deposit Rs. 600 Crores on or before 12.02.2025 and further directed that the proceedings pending before the Hon'ble Delhi High Court and the SEBI be decided on merits. By order dated 12.02.2025, the Apex Court extended the time to deposit the money by one more day. Though appellant had made arrangements for transfer of money from USA to India, he was not given the bank account details and he was unable to make the deposit. SEBI fixed 14.02.2025 to hear on appellant's exemption application. In view of the difference in time zone, appellant was not able to login and attend the virtual hearing; and the SEBI has passed the impugned order on the very same day. He submitted that SEBI's actions after RBI's approval have been in undue haste. The appellant had obtained a legal opinion which suggested that SEBI had violated the statutory mandate under SAST Regulations and particularly the provisions ensuring fair competition and protection of shareholders' interests and the said legal opinion also underscored the fact that the competing offer at Rs. 275 per share was significantly higher than Burman's offer of Rs. 235 per share and SEBI's refusal to acknowledge the legal op....
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....clear and unambiguous. Hence, no interpretation is warranted. 16. Mr. Sancheti further submitted that the appellant does not dispute the fact that 'Detailed Public Statement' was issued by 'Burman Group' on 04.10.2023. Then, the appellant ought to have made a competing offer within 15 days therefrom. He pointed out that during the course of hearing, it was submitted on behalf of the appellant that the appellant was 'not interested' in making a competing offer in October 2023. 17. He further submitted that on 24th and 26th January, 2025, appellant sent letters to SEBI with a request to allow him to make public announcement. At that stage, appellant did not seek purposive interpretation of Regulations. On the other hand, appellant chose to seek exemption under Regulation 11(1). He argued that if appellant was under bona fide belief that the triggering date under Regulation 20(1) was 18.01.2025, he could have made public announcement of his competing offer and for that purpose no permission was required from SEBI. 18. He submitted that exemption provision under Regulation 11(1) is in respect of the obligation to make an 'open offer' on the acquirer. It does not provide for re....
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....egulation 18(12) of SAST Regulations. Further, Burman Group have become promoters of REL pursuant to which there has been change in the management also. To consider the appeal at this stage amounts to abuse of process of law. 22. In appellant's rejoinder written submissions, among other things, it is stated that on 11.02.2025 appellant wrote to RBI for the details of escrow account. On 12.02.2025, the Apex Court directed the RBI to give the account details and the SWIFT number by 02:00 PM on 13.02.2025. RBI wrote to appellant giving the details at 7:18 PM on 12.02.2025. With regard to SEBI hearing, it is stated appellant had sought adjournment as he was embroiled in ensuring Regulatory compliances. However, SEBI passed its order on 14.02.2025. 23. We have carefully considered rival contentions and perused the records. 24. Undisputed facts of the case are, Burman Group collectively held 21.54% equity shares in REL and proposed to buy 5.27% from the market which would result in crossing the threshold of 25% in REL. As per Regulation 3(1) of SAST Regulations, an acquirer shall not be entitled to acquire more than 25% shares unless he makes a public announcement of an 'open of....
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....urman Group made 'public announcement' on 25.09.2023 and 'Detailed Public Statement' on 04.10.2023. As per Regulation 20(1), appellant was required to make a 'public announcement of his open offer' within 15 working days from 04.10.2023. Admittedly, appellant has not made any 'public announcement' even as on date. 29. On 18.01.2025, Burman Group dispatched a 'Letter of Offer' to the shareholders under Regulation 18(2) and advertised the same on 23.01.2025 as required under Regulation 18(7). 30. For the first time, on 24.01.2025, appellant wrote to the SEBI requesting permission to submit a competing open offer under Regulation 20(1) of SAST Regulations. As per SAST Regulations, this required him to make a public announcement within 15 days of 'Detailed Public Statement' made by the Burman Group on 04.10.2023. The said letter was returned by the SEBI on the ground that it was not an exemption application. Subsequently, appellant filed an exemption application dated 01.02.2025 under Regulation 11(1) of SAST Regulations. Thereafter, certain proceedings took place before the Hon'ble Delhi High Court and Hon'ble Supreme Court of India. Suffice to note that on 07.02.2025, the Apex ....
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....ith his letter dated 24.01.2025 which ought to have been construed as a competing offer. He submitted that the appellant was called upon to file an exemption application under Regulation 11 by the SEBI which the appellant filed. 34. In substance, Mr. Sundaram has urged two alternative propositions. • To treat 18.01.2025, the date on which the Burman Group gave 'Letter of Offer' as the date of 'Detailed Public Statement' or • To treat 23.01.2025, the date on which 'Letter of offer' was advertised as the date of 'Detailed Public Statement'. 35. According to Mr. Sundaram, the above interpretation is necessary because approval was required from RBI and other authorities. Unless all approvals are in place, the open offer cannot progress. In this back drop, he urged that a 'purposive interpretation' to Regulation 20(1) may be given holding the date of 'Detailed Public Statement' either as 18.01.2025 or 23.01.2025. We are not persuaded to accept this contention for more than one reason. 36. Firstly, the SAST Regulations are statutory Regulations laid before the Parliament of India. There is no challenge to the vires of the Regulations in the manner known....
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....ation 20(1) is in consonance with Regulation 20(8) which mandates that the schedule of activities and tendering period for all competing offers shall be carried out with identical timelines. Further Regulation 18(4) provides that irrespective of the fact whether a competitive offer was made, an acquirer may make upward revision of his offer. If Regulation 20(1) is to be interpreted in the manner suggested by the appellant, it shall have serious adverse consequences and total uncertainty. It is relevant to note that Burman Group has deposited money in the escrow account in 2023 and obtained Regulatory approvals. If appellant's interpretation is to be accepted and his competitive offer is to be considered, it shall amount to gross discrimination qua the first offeror (Burman Group in this case) in as much as, appellant who is sitting on the fence marches over the first offeror without making his public offer within 15 days from first offeror's public statement. Thus, the interpretation sought by the appellant militates against equality and equal treatment to all bidders and such interpretation is impermissible in law. 41. Fourthly, if the Regulations are interpreted as sought by t....