Daiichi Sankyo Company Limited vs Oscar Investments Limited

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(SC) 93

SUPREME COURT OF INDIA
Uday Umesh Lalit, Indira Banerjee, K.M. Joseph, JJ.
M/s. Daiichi Sankyo Company Limited – Petitioner
Versus
Oscar Investments Limited & Ors. – Respondent
Special Leave Petition (Civil) No.20417 of 2017
With
(In Re: Malvinder Mohan Singh and others)
Suo Motu Contempt Petition (Civil) No.4 of 2019
And
(Mr. Vinay Prakash Singh – Petitioner
Versus
Sameer Gehlaut and others – Respondents
Contempt Petition(Civil)No.2120 of 2018 In Special Leave Petition (Civil)No.20417 of 2017
Decided On : 18-02-2021

Advocates appeared:
For the Parties: Mr. Mukul Rohatgi, Sr. Adv. Mr. Rakesh Dwivedi, Sr. Adv. Mr. Jaideep Gupta, Sr. Adv. Mr. Krishnan Venugopal, Sr. Adv. Mr. Amit Kumar Mishra, Adv. Mr. Eklavya Dwivedi, Adv. Mr. Mohit Singh, Adv. Ms. Samridhi Hota, Adv. Ms. Kanika Singhal, Adv. Mr. Shivam Pandey, Adv. Mr. Turab Ali Kazmi, Adv. Ms. Saloni Agarwal, Adv. Mr. Rohan Jaitley, Adv. Mr. Aditya Shankar, Adv. Mr. Jaiveer Shergil, Adv. Mr. Kunal Chatterji, AOR Mr. Keshav Dhingra Sehgal, Adv. Mr. Shivendra Singh, Adv. Ms. Maitrayee Banerjee, Adv. Mr. Pravar Veer Misra, Adv. Mr. Arvind P. Datar, Sr. Adv. Mr. Amit Kumar Mishra, Adv. Mr. Eklavya Dwivedi, Adv. Mr. Mohit Singh, Adv. Ms. Samridhi Hota, Adv. Ms. Kanika Singhal, Adv. Mr. Shivam Pandey, Adv. Mr. Turab Ali Kazmi, Adv. Ms. Saloni Agarwal, Adv. Mr. Rahul Unnikrishnan, Adv. Mr. Jaiveer Shergill, Adv. Mr. Kunal Chatterji, AOR Mr. Kailash Vasdev, Sr. Adv. Mr. Anuradha Dutt, Adv. Ms. Suman Yadav, Adv. Mr. Tushar Jarwal, Adv. Mr. Aditya Sarin, Adv. Mr. Shobhit Ahuja, Adv. Ms. B. Vijayalakshimi Menon, AOR Mr. Harish N. Salve, Sr. Adv. Mr. Rajiv Nayar, Sr. Adv. Mr. H.S. Chandhoke, Adv. Mr. Sanjeev Kumar, Adv. Mr. Saleem Ansari, Adv. Mr. Vaibhav Kakkar, Adv. Mr. Abhishek Kisku, Adv. Mr. Anshul Sehgal, Adv. Mr. Sahil Arora, Adv. Mr. Rohit Dahiya, Adv. Mr. Faisal Sherwani , AOR Mr. Harish N. Salve, Sr. Adv. Mr. Gaurav Pachnanda, Sr. Adv. Ms. Ruby Singh Ahuja, Adv. Mr. Vishal Gehrana, Adv. Ms. Kritika Sachdeva, Adv. Mr. Anmol Jassal, Adv. Ms. Namrata Sinha, Adv. Ms. Avni Sharma, Adv. M/s. Karanjawala & Co., AOR Ms. Meenakshi Arora, Sr. Adv. Mr. Vivek Jain, AOR Mr. Zulfiquar Menon, Adv. Mr. Nirvikar Singh, Adv. Mr. Abhishek Singh, Adv. Mr. Manish Shekhari, Adv. Mr. Nitin Sharma, Adv. Mr. Ganesh Khemka, Adv. Mr. Shyam Divan, Sr. Adv. Mr. Anuj Berry, Adv. Mr. Abhik Chakraborty, Adv. Mr. Vinayak Chawla, Adv. Mr. Shradul S. Shroff, AOR Mr. Shyam Divan, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Mr. Himanshu Satija, Adv. Mr. E. C. Agrawala, AOR Mr. C.U. Singh, Sr. Adv. Mr. Sandeep Devashish Das, AOR Ms. Aishwarya Singh, Adv. Mr. Pratap Venugopal, Adv. Ms. Surekha Raman, Adv. Ms. Viddusshi Shandilya, Adv. Mr. Akhil Abraham Roy, Adv. Mr. Vijay Valsan, Adv. M/s. K J John & Co, AOR Mr. Jayant Mehta, Adv. Ms. Roopali Singh, Adv. Ms. Sayobani Basu, Adv. Ms. Durga Manda, Adv. Mr. Anant Misra, Adv. Mr. Pranay Chitale, Adv. Mr. Mayank Pandey, AOR Mr. Sameer Parekh, Adv. Mr. Sumit Goel, Adv. Ms. Sonal Gupta, Adv. Mr. Manu Bajaj, Adv. Ms. Nitika Pandey, Adv. M/s. Parekh & Co., AOR Mr. Sandeep Joshi, Adv. Mr. Anang Shandilya, Adv. Mr. Amit Gupta, Adv. Mr. Sanjay Kumar Visen, AOR Mr. Atul Sharma, Adv. Ms. Renuka Iyer, Adv. Mr. Abhishek Agarwal, AOR Mr. Ateev Mathur, Adv. Mr. Gagan Gupta, AOR Mr. Aman Raj Gandhi, AOR Ms. Sanjana Arora, Adv. Mr. Rohan Thawani, Adv. Mr. Hardeep Singh Anand, AOR M/s. Khaitan & Co., AOR

Headnote:
Special Leave Petition - Status quo - Court directed that status quo as on day with regard to shareholding of Fortis Healthcare Holding Private Limited in Fortis Healthcare Limited be maintained - By next order, it was clarified that earlier order was intended to be in respect of ‘both encumbered and unencumbered shares of Fortis Healthcare Limited held by Fortis Healthcare Holding Private Limited’ – Held, Both learned Senior Counsel submitted that with various orders passed by High Court and this Court, concerned individuals and corporate entities could not sell shares held by FHHPL directly and, therefore, a device was employed and arrangement was so structured that shares were proceeded against by banks and financial institutions - It was submitted that banks/financial institutions had intervened in matters pending before this Court, that they were definitely aware of Award granted in favour of M/s. Daiichi Sankyo Company Limited; and that role of banks and financial institutions would, therefore, require closer scrutiny – Ordered accordingly.

ORDER :

1. While issuing notice on 11.08.2017 in Special Leave Petition (Civil)No. 20417 of 2017, this Court directed that status quo as on the day with regard to the shareholding of Fortis Healthcare Holding Private Limited (‘FHHPL’, for short) in Fortis Healthcare Limited (‘FHL’, for short) be maintained. By next order dated 31.08.2017, it was clarified that the earlier order dated 11.08.2017 was intended to be in respect of ‘both the encumbered and unencumbered shares of Fortis Healthcare Limited held by Fortis Healthcare Holding Private Limited’.

2. Soon thereafter, various banks/financial institutions filed applications seeking modification/clarification submitting inter alia that certain shares of FHL held by FHHPL were already pledged with said banks/financial institutions and that it be directed that the orders dated 11.08.2017 and 31.08.2017 would not apply to such encumbered shares. For example, I.A. No. 89755 of 2017 (Volume No. 16) was filed by Axis Bank Limited stating in para 2 of the application that 1,83,75,000 shares were pledged with it since 2014. Similarly, I.A. No. 90247 of 2017 (Volume No. 18) was filed by Yes Bank Limited.

3. By order dated 15.02.2018, the earlier orders dated 11.08.2017 and 31.08.2017 were clarified by this Court to mean that the status quo granted would not apply to shares of FHL held by FHHPL which had been encumbered before the interim orders dated 11.08.2017 and 31.08.2017 were passed.

4. Later, the order dated 15.11.2019 passed by this Court in Contempt Petition (Civil) No.2120 of 2018 (“the Order”, for short) dealt with five assurances given to the High Court of Delhi, while the matter was pending in the High Court and the effect of interim orders passed by this Court. In paragraph 41 of the Order, this Court found that there was significant decline in the number of shares held by FHHPL from September, 2016 to December, 2018. It was observed:-

“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 have any impact on the (potential) creditors and availability of the funds would only pare down the debt and increase the value of the shares. Contrary to the aforesaid solemn assurances and undertakings, which were repeatedly reiterated to procure orders, the shareholding went into a downward spiral, as is apparent from the table in paragraph

23. There was a significant decline in the total number of shares held by FHHPL, both encumbered and unencumbered, which fell down from 27,21,59,955 and 5,29,31,574 in September 2016 to 5,51,484 and 6,01,607 in December 2018. The aforesaid fact with the impact on valuation was never brought to the notice of the Court and was concealed with the knowledge that these facts, if brought to the notice, would have substantial bearing on the orders that would be passed to protect the interest of the petitioner.”

5. As a matter of fact, the concerned figures showing shareholding patterns including the division between encumbered and unencumbered shares in various quarters were set out in a tabular chart in paragraph 23 of the Order. Said paragraph 23 was as under:-

“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

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