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 the shares of FHL were pledged with them;
(b) to place on record the nature of securities offered in connection with such loan arrangements; (Para.15)
M/S. DAIICHI SANKYO COMPANY LIMITED V. OSCAR INVESTMENTS LIMITED & ORS.
Special Leave Petition (Civil) No.20417 of 2017 with Suo Motu Contempt Petition (Civil)No.4 of 2019 and Contempt Petition (Civil) No.2120 of 2018
Decided on 18th February 2021
The present case was decided by a three-judge bench of the Supreme Court comprising of Justice Uday Umesh Lalit, Justice K.M. Joseph and Justice Indira Banerjee.
While issuing notice on 11.08.2017 in this SLP, the Court directed that status quo in regards to the shareholding of Fortis Healthcare Holding Private Limited9 (FHHPL) in Fortis Healthcare Limited (FHL) be maintained. The next order on 31.08.2017 clarified that the earlier order was meant to cover both encumbered and unencumbered securities. Various banks and financial institutions filed applications for modification/clarification claiming, among other things, that some FHL shares owned by FHHPL have already been pledged with said banks/financial institutions, and that the orders dated 11.08.2017 and 31.08.2017 do not extend to those encumbered shares.
By order dated 15.02.2018, it was clarified that status quo would not be applicable for FHL shares held by FHHPL which had been encumbered before the above-stated orders were passed. By order dated 15.11.2019 passed by this Court in Contempt Petition (Civil) No.2120 of 2018, it indicated that the number of unencumbered shares held by FHHPL steadily declined and that ‘the contemnors knowingly and willingly lost control of Fortis Healthcare Limited (FHL)’.
Learned Counsel, Mr. Kailash Vasdev, appearing for one of the defendants submitted an affidavit which showed that that neither Respondent No. 14 nor Respondent No. 19 sold or encumbered any shares and further submitted that the banks exercised the right of pledge without any reference to or action from either of the Respondents.
Appearing for some of the banks, learned Counsels submitted that the issues were already dealt with by this Court and no pleadings were raised for which response could be filed by them.
Learned Senior Advocate, Mr. Rakesh Dwivedi, placed reliance on an affidavit and submitted that it was not just a case of creating encumbrance or pledge but, there were instances of sale of shares and the purpose was definitely to reduce the extent of control of FHHPL.
Mr. Arvind P. Datar, learned Senior Advocate, contended that none of the banks/financial institutions had indicated why the unencumbered shares were sought to be put under encumbrance or the shares were sold when other forms of securities were available.
The Court heard both sides of the dispute.
The Court directed the noticee banks and the financial institutions to perform the following:
(a) to place on record the basic documents pertaining to loans advanced or financial accommodations extended in respect of which the shares of FHL were pledged with them;
(b) to place on record the nature of securities offered in connection with such loan arrangements (Para 15)
The Court also directed that details regarding the encumbered and unencumbered shares of FHL in the name of FHHPL on specific dates and details of their sale by banks be placed on record.
The Court ordered the noticee banks and financial institutions to give appropriate responses by 22.02.2021 and listed them for further consideration on 24.02.2021.
View/Download judgment: M/S. DAIICHI SANKYO COMPANY LIMITED V. OSCAR INVESTMENTS LIMITED & ORS.
Yashwardhan Bansal
