Paragraph numbers below are the court’s original numbering, recovered from the source text.
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 I.A. 43119 of 2020 describing Table ‘A’ and Table ‘B’, are annexed herewith as Annexure “P-1”. The SC may also direct forensic audit of entities (indirectly owned and controlled by MMS and SMS) which are registered outside India. An illustrative list of such entities is annexed herewith as Annexure “P-2”.
2. The SC may also direct a forensic audit of all the concerned companies that borrowed from banks and financial institutions (Dion Global Solutions Limited, Ligare Aviation Private Limited, Ligare Voyages Private Limited, Ranchem Private Limited, ANR Securities Private Limited, RHC Holding Private Limited, Oscar Investments Limited, Fortis Healthcare Holding Private Limited (“FHHPL”), RWL Healthworld Limited and Religare Capital Markets International Mauritius Limited) and for which the shares of Fortis Healthcare Limited (“FHL”) owned by FHHPL were pledged from time to time, including where top-ups with respect to the pledges were made, in violation of the orders and undertakings given to the Hon’ble Delhi High Court (“DHC”) and the SC. A list of borrower entities is annexed herewith as Annexure “P-3”.
3. As per MMS and SMS, the following assets are available for sale to purge a part of the contempt: S. NO. LOCATION OF LAND/BUILDING AREA OWNED BY LAND 1. Land at Ulhasnagar, Dist. Thane, Maharashtra: 35.150 Acre Green Grass Estates Pvt Ltd. 2. Land at Ulhasnagar, Dist. Thane, Maharashtra: 31.775 Acre White Feather Estates Pvt. Ltd. 3. Land at Badlapur, Maharashtra: 129.560 Acre Vitoba Realtors Pvt. Ltd. 4. Land and Building at Asola, Delhi: 5 Bigha 16 Biswas Bindas Realtors Pvt. Ltd. 5. Land at Mehsana, Gujarat RHC Holding Pvt. Ltd. 6. Land at Mehsana, Gujarat RHC Holding Pvt. Ltd. 7. Land [Noida/Ludhiana]- 12,845 Sq Feet- Noida 3578.96 Sq Yard-Ludhiana Green Biofuels Farms Pvt. Ltd. 8. Land-Gawalpahari, Gurgaon- 27.57 Acre Greenline Buildwell Pvt Ltd. BUILDING 9. Flat C-4/5. Ist Floor, Taj Building, Fort, Mumbai A-1 Book Company Pvt Ltd. M/S. DAIICHI SANKYO COMPANY LIMITED v. OSCAR INVESTMENTS LIMITED [UDAY UMESH LALIT, CJI]
4. In addition to the aforesaid land parcels, MMS and SMS have also stated that the following brands/trademarks are available for sale to purge a part of the contempt: BRAND/TRADEMARK OWNER 1. Religare Elive Infotech Private Limited (Group company- owned by the Contemnors) 2. SRL Headway Brands Private Limited (group company- 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). Eight banks and financial institutions (Axis Bank, Yes Bank, RBL Bank, ECL Finance Limited, First Abu Dhabi Bank, Indiabulls, Aditya Birla Finance Limited and Lakshmi Vilas Bank) have engaged in this reprehensible conduct and, as per the share price as on 11 May 2021, the vale of the shares pledged after 24 May 2016, is approximately and amount of INR 2859,45,32,748/- (That is, Indian Rupees Two Thousand Eight Hundred Fifty-Nine Crores Forty-Five Lakhs Thirty-Two Thousand Seven Hundred Forty- Eight Only). Banks and financial institution who have created pledges or exercised right of top-ups after 24 May 2016 (i.e., the date of the first undertaking), should be directed to deposit the equivalent amounts with this Hon’ble Court. This Hon’ble Court may also direct that the money being deposited by the banks and financial institution is pursuant to the exercise of its contempt jurisdiction and, therefore, any and all monies if so directed to be deposited to purge the contempt can only be released in favour of Daiichi who has suffered as a result of the contemptuous acts. A table of pledges created (after 24 May 2016) by each bank and the total value is annexed as Annexure “P-4”.
8. DCB Bank, HDFC Limited and Citi Corp Finance (Noticee Nos. 12, 10 and 13 respectively) have not appeared before this Hon’ble Court despite service of the notice on them. This Hon’ble Court should cancel the pledges created by them on the shares of FHL as owned by FHHPL in violation of the court orders and they should be directed to deposit the equivalent amount with the Hon’ble Court. [Vol.210/Page 82]
9. This Hon’ble Court may direct RBL Bank to deposit a sum equivalent to the value of 4,20,000 shares of FHL i.e., approx., INR 9,88,89,000 (Indian Rupees Nine Crores Eighty-Eight Lakhs Eighty-Nine Thousand Only) which were injuncted from being transferred or sold by order dated 15 April 2021 of the SC.
10. While Indiabulls sold 12,25,000 shares of FHL in violation of the orders of the SC and has been held guilty for this, it has also sold 9,04,760 shares during the period of 05 September 2018 – 21 September 2018 I gross violation of orders of this Hon’ble Court. Therefore, the SC should direct Indiabulls to deposit an amount of INR 21,30,25,742 (Indian Rupees Twenty-One Crores Thirty Lakhs Twenty-Five Thousand Seven Hundred and Forty-Two Only), which is an amount equivalent of the value of these shares M/S. DAIICHI SANKYO COMPANY LIMITED v. OSCAR INVESTMENTS LIMITED [UDAY UMESH LALIT, CJI] (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 Limited
14. By their undertaking as recorded in DHC’s order dated 21 June 2017, Respondents/Judgment Debtors had assured that a sum of INR 2341.90 crores will always be available and realizable to satisfy the Award dated 29 April 2016. At this juncture, the Singh Brothers were the Chairman and the Managing Director of FHL.
15. Daiichi Sankyo has the right to recover the amount of INR 2341.90 crores from FHL because FHL is also subject to and bound by the undertakings given from time to time by the Singh Brothers. By the theory of attribution, the undertakings/ representations/assurances made from time to time are as if they have been (and, indeed, should be deemed to have been made by FHHPL and FHL, both of whom (although there are not judgment debtors) form part of the Fortis Group. It is submitted that FHL is as bound by the assurances/undertakings given eight times because, inter alia, the Singh brothers were the directing mind and will of FHL.
16. FHL and IHH have violated the order dated 14 December 2020 of this Hon’ble Court by transferring an amount of INR 4000 crores (that is, Indian Rupees Four Thousand Crores) outside India to RHT Trust, Singapore. This amount should be brought back and deposited with this Hon’ble Court. This Hon’ble Court has initiated suo moto contempt action against FHL in this regard. FHL, IHH and NTK must be directed to deposit this amount with this Hon’ble Court. D. RHT Trust
17. Notice of contempt to be issued to RHT Trust and its following officials; (i) Tank Kang Fun-CEO/CFO-Trustee Manager; and (ii) Gurpreet Singh Dhillon – former CEO and Executive Director of the RHT Trust and a close relative of the Singh Brothers. This Hon’ble Court may direct RHT Trust and Gurpreet Singh Dhillon to explain their roles in: (i) the transfer of INR 4000 crores by FHL to RHT Trust in breach of the order dated 14 December 2018 of the SC: (ii) the further transfer of the monies to RHT’s unitholders (including directly/indirectly members of the Dhillon family and the Singh Brothers) which was also in violation of the order dated 14 December 2018. This transfer involved a further transfer of INR 817 crores to FHL (as a unitholder); and (iii) the execution of definitive agreement dated 13 February 2018 between FHL and RHT for the buy-back of RHT portfolio assets based on the term sheet dated 14 November 2017 and disclosure 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. M/S. DAIICHI SANKYO COMPANY LIMITED v. OSCAR INVESTMENTS LIMITED [UDAY UMESH LALIT, CJI] 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 their control beyond the reach of Daiichi? (b) Having given clear assurances to the High Court and this Court, whether such acts of commission and omission on part of Contemnor Nos.9 and 10 amount to contempt of the orders passed by the High Court and this Court? (c) Whether the banks and financial institutionssold the shares which were pledged with them, purely as a matter of commercial expediency or whether there was any deliberate act of defiance to defeat the rigour and width of the orders passed by the High Court and this Court? (d) Whether the acts committed by them were in connivance with Contemnor Nos.9 and 10? (e) Whether the transactions entered into by or with IHH/ NTK were bona fide or whether there was a deliberate attempt to defeat the processes of Court and thereby keep the assets beyond the reach of Daiichi? 26. The first two questions raised hereinabove need no further elaboration as the conduct of contemnor Nos.9 and 10 was considered and they were held guilty of having committed contempt of the orders passed by the High Court and this Court. While holding them guilty, by its judgment and order dated 15.11.2019 this Court had given them an opportunity to purge themselves of contempt. Therefore, insofar as the role played by Contemnor Nos.9 and 10 is concerned, the matter rests in a narrow compass i.e., whether they have purged themselves of contempt or not? The kind of assets that have been offered by said Contemnor Nos.9 and 10 in their affidavit are so inadequate that it is impossible to satisfy the amount awarded in favour of Daiichi in the foreign arbitral award. We are, thus, left with no alternative but to hold that said Contemnor Nos.9 and 10 have failed to purge themselves of contempt. As a matter of fact, there is no genuine attempt on their part. The question then comes up is about the quantum of sentence. Considering the enormity of their actions, in our view, the maximum sentence that can be awarded, must be imposed. We, therefore, sentence them to suffer six months imprisonment andimpose fine of Rs.5,000/- for having committed contempt of court with default sentence of two months. 27. That takes us to the next set of questions regarding the role played by the noticee banks and financial institutions. With the assistance of the learned counsel appearing for the parties we made an attempt to go through the documents placed on record but find ourselves unable to come to a definite conclusion whether there were antecedent arrangementswhich 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 M/S. DAIICHI SANKYO COMPANY LIMITED v. OSCAR INVESTMENTS LIMITED [UDAY UMESH LALIT, CJI] 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 wrongful acts. But there are two difficulties to undertake such exercise in contempt jurisdiction in the present matter. First, these noticees were not parties to the initial proceedings in this Court. Secondly, they have come up with a defence that all their acts were purely commercial in nature and it was the expediency of the situation which demanded such actions on their part. These issues need to be gone into at the appropriate stage(s).But before reacting that level, a factual analysis in the form of forensic auditas suggested by Daiichi is also required to be undertaken. Such exercise will certainly help the court in arriving at an appropriate conclusion and in passing appropriate orders or directions. We, therefore, refrain from passing any directions against said banks and financial institutions for the present but observe that the executing court or any other authority competent to exercise such power shall do well to appoint forensic auditor(s) to undertake proper exercise to unravel the truth. 29. Insofar as the issues concerning the acquisition of proprietary interests in hospitals and diagnostics centers at a price of Rs.4,666 crores by FHL is concerned, facts on record are not quite adequate to enter into such arena. Prima facie, it appears to be acquisition of proprietary interest to subserve the business structure of FHL as suggested by IHH/ NTK. But again, that is a matter to be enquired into and facts to be assessed in the light of any forensic analysis, if the court so deems appropriate. 30. In the premises we pass following directions: (a) Contemnor Nos.9 and 10 are sentenced to suffer six months imprisonment and pay fine in the sum of Rs.5,000/- each within four weeks from today. In case of default of payment of fine, the contemnors shall undergo further imprisonment of two months. (b) Special Leave Petition (Civil) No.20417 of 2019, Contempt Petition No.2120 of 2018 in SLP(C) No.20417 of 2019 and Suo Motu Contempt Petition (C) No.4 of 2019 are disposed of with a direction to the High Court, before whom the proceedings in execution are pending, to consider appointment of forensic auditor(s) to analyse the transactions entered into by the noticee banks and financial institutions and to look into whether such transactions were bona fide and entered into in commercial expediency. (c) The executing court may also consider issuing appropriate process and appointing forensic auditor(s) to analyse the transactions entered into between FHL and RHT and other related transactions. (d) The amount of Rs.17,93,40,000/- which stands deposited in the Registry of this Court shall be transmitted to the executing court along with interest accrued thereon. The said amount shall be available to the executing court while considering execution of the instant foreign arbitral award. (e) Certain shares which are still lying with the noticee banks and financial institutions, for example, the shares of FHL pledged with and continued to be held by RBL Bank which were dealt with in the order dated 15.04.2021 passed by this Court,shall be available to the executing court and shall abide by such order as the executing court may deem appropriate to pass. (f) All the properties offered by Contemnor Nos.9 and 10 in their attempt to partially purge themselves of contempt shall also be available to the executing court and shall abide by such directions as the executing court may deem appropriate to pass. Consequently, there shall be attachment of all those assets which may await the decision or direction to be passed by the executing court in due course of time which may also include the questions whether the assets in question apparently in the names of certain persons/ entities can be proceeded against. (g) Needless to say that it shall be open to the executing court to pass such directions as the facts and circumstances presented before it may justify. (h) All pending proceedings before the concerned courts, including the First Information Reports and proceedings before NCLT shall be taken to logical conclusion in accordance with law. (i) The Registry shall send copies of all volumes, submissions and pleadings filed by the parties in the instant matters to the executing court for facility and record. Divya Pandey Directions issued. (Assisted by : Preetam Bharti, LCRA) M/S. DAIICHI SANKYO COMPANY LIMITED v. OSCAR INVESTMENTS LIMITED [UDAY UMESH LALIT, CJI]