TMI Blog2022 (9) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - there are 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. Role played by the noticee banks and financial institutions - HELD THAT:- With the assistance of the learned counsel appearing for the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwani, 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 Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Mr. Himanshu Satija, Adv. Mr. Nishant Rao, Adv. Ms. Mansi Taneja, Adv. Mr. E. C. Agrawala, AOR JUDGMENT Uday Umesh Lalit, CJI. 1. The present proceedings arise out of an action initiated by Daiichi Sankyo Company Limited (hereinafter referred to as Daiichi ) for enforcing a Foreign Arbitral Award dated 29.04.2016 made in Singapore and passed in favour of Daiichi and against 20 Respondents i.e. Respondent 1: Malvinder Mohan Singh, Respondent 2: Malvinder Mohan Singh as Karta of HUF, Respondent No.3: Malvinder Mohan Singh as Trustee of Bhai Hospital Trust, Respondent No.4: Japna M. Singh, Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is 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 that the said respondent may enter into, the value as disclosed to the court would not be, in any manner, hampered or diminished. 11. The effect of the above statement of learned Senior Counsel for respondent no. 14 and 19 is that the sum of Rs.2841.09 Crores (i.e. Rs.452.60 + Rs.1889.30 crores) would always be available and realizable as an asset of respondent no.14 and 19, in Fortis Healthcare Holding Pvt. Ltd. Towards the satisfaction of the decretal amount as and when the stages so arises. 12. The statement is taken on record and the undertaking accepted. 3. In Special Leave Petition (Civil) No.20417 of 2017 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 appears that during this period reports appeared in various newspapers that the respondents were disposing their stakes in subsidiary companies and were also clandestinely disposing of their assets. Left with no alternative, the petitioner filed an Interlocutory Application being I. A. No. 618 of 2017 before the High Court of Delhi in which the following prayer was made: - a. Urgently pass an order directing the Respondents to secure the Award amount by depositing it with the Registrar of the Delhi High Court or by providing adequate security or by bank guarantee or by any other means that this Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the companies. The Court again noted the statement of Dr. A.M. Singhvi and Mr. Rajiv Nayar to the following effect: - 12. Both Dr. Singhvi and Mr. Nayar state that if any change is proposed in the status of any of the unencumbered assets whose details are to be furnished as directed hereinbefore, the Respondents will first apply to the Court. This was the third assurance on behalf of the respondents. The fourth assurance 8. OIL and RHC filed the certificates disclosing the value of the unencumbered assets and investments. On 28.02.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 respondents violating the undertakings time and again restraint orders were not being passed. In the Special Leave Petition (Civil) No. 20417 of 2017 filed by the petitioner this Court passed the following order on 11.08.2017: - In the interim it is directed that status quo as on today with regard to the shareholding of Fortis Healthcare Holding Private Limited in Fortis Healthcare Limited shall be maintained. As per the statutory disclosures made by FHHPL to the BSE and National Stock Exchange (NSE), it was disclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 held by Fortis Healthcare Holding Pvt. Ltd. as may have been encumbered on or before the interim orders of this Court dated 11th August, 2017 and 31st August, 2017. The applications for directions are disposed of in the above terms. It would be pertinent to mention that on 23.02.2018, this Court passed the following order: Interim order of this Court dated 15th February, 2018 will continue to hold the field till the High Court decides the matter. 17. During the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017, 30,59,260, unencumbered shares were pledged in favour of IHFL. As far as this violation of the order dated 11.08.2017 is concerned, in view of the order dated 31.08.2017, the same stands condoned. This would further mean that the unencumbered shares should have been reduced to 3,52,55,957. 26. However, the figures of September 2017 show a totally different situation. The total shareholding has fallen to 17,80,26,597 and the unencumbered shares to 26,31,777. This means that in addition to 30,59,260 shares pledged on 14.08.2017, 3,26,24,180 number of shares were encumbered or transferred during this period. There is no explanation by OIL, RHC, MMS or SMS, as to how these unencumbered shares were encumbered or transferred in total violation 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 trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, we may refer to the disclosures made by FHL to BSE. The above chart shows that in the quarter ending 30.06.2018, FHHPL held 32,82,851 shares in FHL out of which only 5,51,484 were encumbered, meaning that the balance 27,31,367 were unencumbered shares. The disclosure of 30.09.2018 and 31.12.2018 both reflect that the number of encumbered shares have not changed but the total shareholding of FHHPL in FHL has reduced from 32,82,851 to 11,53,091. This means that what was transferred were 21,29,760 unencumbered shares and not encumbered shares. The transaction of 12,25,000 shares therefore is out of the unencumbered shares because after 31.03.2018, the encumbered shares were much below 12,25,000. 30. We are not entering into the dispute whether the shares 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 tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares on 14.08.2017. It is difficult to ignore this huge drop in shareholding but even if we were to ignore this, we do not understand how in March 2018, the shareholding fell to 34,20,451 and finally in December 2018 to 11,53,091. The undertaking given to the High Court of Delhi was that the shareholding as on 19.06.2017 and 21.06.2017 would be maintained. On 11.08.2017, this Court injuncted the respondents from changing the shareholding. On 11.08.2017, this Court passed the order of status quo referred to above. Despite that specific order, on 14.08.2017 a pledge was created. This was a violation of the orders of this Court. RHC and OIL filed applications before this Court on 21.08.2017 praying for modification of the order and for a direction that the order dated 11.08.2017 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferential shares. In addition to the preferential shares allotted to them, the shares which were owned by MMS and SMS through their holdings in FHHPL in FHL have vanished into thin air and the only conclusion which we can draw is that this was a well thought out plan to deprive the petitioner from the amounts due to it. 40. No person or institution howsoever powerful, can be permitted to misuse the process of the Court. Contempt of court can be committed in various ways. Civil contempt is defined under the Contempt of Courts Act, 1971 under Section 2(b) to mean wilful disobedience of any judgment, decree, direction, order of the Court of wilful breach of an undertaking given to the Court. Criminal contempt has been defined under Section 2(c) to include anything which scandalizes 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 fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very hurried and clandestine manner to a trust registered in Singapore i.e. RHT Health Trust (RHT). Coincidentally, respondents no.9 and 10 themselves or through their holding companies were at one time the biggest unitholders in the trust. It is obvious that the respondents being debtors are maneuvering, transferring and converting the assets of value, with the desire and intent that the petitioners would not be able to recover the decretal amount as per the award. 43. We would, therefore, not read the orders of this Court in isolation but along with the five solemn assurances and undertakings given before the High Court. Directions given by this Court and the orders passed were in light of the fact that the contemnors always projected that the said assurances and undertakings were binding 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 was filed by the petitioner on 15.01.2019 stating that FHL is proposing to transfer Rs.4,000/- crores approximately, received by it [as a result of the transferring of shares to the IHH Healthcare Bhd. (Malaysian Company)] to RHT Health Trust, Singapore (RHT). Petitioner prayed for restraining this transfer of funds and compliance of order dated 14.12.2018. FHL filed a reply to this I.A., which made it apparent that on 15.01.2019 itself FHL had completed the transaction involving acquisition of assets from Singapore based RHT even though it was fully aware that this Court was seized of the matter. 49. Interestingly, the main promoters of RHC and OIL i.e. MMS and SMS were the biggest unit holders in RHT when it was initially incorporated. The statistics of unit holding as on 20.06.2017 of RHT Trust, Singapore 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court shall decide on the next date as to how this amount is to be disbursed. (iv) The Registry is directed to register a suo motu contempt petition against RHC Holding Private Limited, Oscar Investments Limited, Malvinder Mohan Singh, Shivinder Mohan Singh and Fortis Healthcare Limited, for having wilfully violated the order of this Court dated 14.12.2018 and issue notice to them returnable for 03.02.2020 asking them to show cause why they should not be punished for contempt. 52. List the present contempt petition on 03.02.2020 when all the contemnors named hereinabove shall remain present in the Court. On that day, we shall hear them on the issue of sentence. Along with this, the contempt petition which has been ordered to be registered shall also be listed on 03.02.2020. 9. In terms of leave granted in sub paragraph (i) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,851 (0.65%) 8. Neither Respondent no.14 nor Respondent No.19 sold and/or further encumbered any shares after 06.03.2017. However, pursuant to the existing loan/pledge agreements, various banks themselves exercised the right of pledge/top-up of the pledge shares without any reference or any action from Respondent Nos.14 19 and/or FHHL, described in greater detail hereinbelow. Further, the Hon ble Supreme Court, vide its orders dated 11.08.2017 and 31.08.2017 injuncted FHHL and all financial institutions from selling/alienating encumbered as well as unencumbered shares held by FHHL in FHL. This order was modified by the Hon ble Supreme Court on 15.0- 2.2018, whereby the encumbered shares were permitted to be sold by the respective lenders. Due to all above, there were sale/fresh encumbrances from the period 06.03.2017 till 31.08.2017 but thereafter 5ill 15.02.2018 there was no change in the said encumbrance/sale and once again there were further sales after 15.02.2018. The unencumbered shares held by FHHL in FHL are protected by the order dated 23.02.2018 passed by the Hon ble Supreme and cannot be encumbered/alienated by FHHL. Copies of the orders d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent affidavit on behalf of Respondent No. 19 and all other Respondents. 4. All the Respondents had submitted their respective affidavits disclosing their assets on 6.12.2016 to this Hon ble Court. The aggregate book value of investments held by all the Respondents (excluding investments inter se amongst the Respondents) as per the said Affidavits is Rs.10,217.10 Crores out of which investments to the tune of Rs.1,409.93 crores are encumbered leaving the residual investments to the tune of Rs.8,807.18 Crore as unencumbered. Further, as on 31.12.2016, the book value of investments held only by RHC Holding Private Limited (Respondent No.19) as on 31.12.2016 is Rs.6,510.54 Crores out of which investments to the tune of Rs.1,513.86 Crores are encumbered leaving the residual investments to the tune of Rs.4,996.68 Crores as unencumbered. 5. Respondent No.19 has also undertaken an internal valuation of its unencumbered investments as on 31.12.2016 mentioned in para (4) above and based on such internal valuations, the estimated (on a conservative basis] fair value of its unencumbered investments as on 31.12.2016 is approximately Rs.3,453 Crores. 6. Apart from the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sake of flexibility and debt repayments of various group entities. 12. It was, therefore, 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. He further submitted that at the stage when the applications for modification/clarification were preferred by the banks and financial institutions, on the basis of which the order dated 25.02.2018 was passed by this Court, none of the banks had told this Court what the consequences of said order would be; and that in a matter of a yearandhalf, the shareholding of FHHPL stood reduced to negligible level. 13. Mr. Arvind P. Datar, learned Senior Advocate, added that there would normally be a basic arrangement or loan agreement, in terms of which various kinds of securities including charge over properties, corporate and personal guarantees would be offered; and that a pledge of shares would only be by way of an additional security. 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such encumbrance created after 11.08.2017 was in pursuance of any fresh arrangement or agreement and, if so, the details of such agreement/arrangement; (h) to disclose whether under such agreement/arrangement any other security was given by the pledgors; and (i) to give the value of the encumbered shares as they stood in September, 2016, on 11.08.2017 and on subsequent dates. 12. The subsequent Order dated 15.4.2021 passed by this Court noted submissions advanced on behalf of Noticee No.4 and passed directions as under: Mr. Sanjay Gupta, learned advocate appearing for M/s. RBL Bank Ltd.- Noticee No.4 submits: - (a) As on 11.08.2017, 38.75 crores shares of Fortis Healthcare Ltd. stood pledged with the noticee in respect of facilities granted to M/s. Religare Wellness Ltd (now known as RWL Healthworld Ltd.) and to Religare Aviation Ltd. (now known as Ligare Aviation Ltd.) (b) On 20.02.2018, 33.75 crores shares were sold for Rs. 47 crores while another tranche of 80,000 shares was sold on 24.05.2018 for about Rupees one crore. (c) Thus, 4.20 lakh shares are still under the control of Noticee No.4. (d) All the facilities now stand squared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as the undertakings given on behalf of the respondents are highlighted in the list of dates for easy reference. The list of dates and events is as under: Date Particulars Pg.No. 2007-2014 FHL Shares pledged on various dates in favour of ABL to secure various credit facilities. Upon closure of these facilities, pledged shares were released. Vol. 197, Pg.1 2009-2013 Loans extended by YBL to Group Companies owned and controlled by Singh Brothers since 2009. 3.3 Crores FHL Shares were pledged in favour of YBL in July 2010 to secure certain facilities. Pledged shares were released upon closure of these facilities. Vol. 200, Pg.2 08.11.2010 Overdraft Facility for Rs.50 Crores executed between RHC and ABL, security being First Charge on the entire current assets of the company, both present and future Vol. 167, Pg.137 27.07.2012 Credit Facility for Rs.53 Crores (Rs.45 Crores + Rs.8 Crores) extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns outstanding from this borrower as on 23.03.2021. Rs.200 Crores Loan extended by YBL to HTL 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 in owned by RS Infrastructure Pvt Ltd. ensuring cover of 1.33x Vol. 175,Pg. 556 C. Unconditional and Irrevocable Corporate Guarantee of RS Infrastructure Private Limited to remain valid during the entire tenor of the facility. D. Non-Disposal Undertaking from Lowe Infra and Wellness Private Limited for their entire shareholding in RS Infrastructure Private Limited. Vol. 176, Pg.604 E. Debt Service Reserve Account (DSRA) equivalent to three months interest payment shall be created u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.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, Pg.65 20.02.2015 YBL sanctioned a loan amount of Rs.500 Crores to OIL. This facility was closed on 23.02.2017 Vol. 200, Pg.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.10.2015 Release of 1,95,00,000 FHL Shares by ABL [w.r.t. 29.09.2015] Vol. 197, Pg.3 16.10.2015 46,30,000 FHL Shares pledged in favour of YBL to secure Rs.250 Crores credit facility to FSSPL. These pledges were released on 27.11.2015. Vol. 200, Pg.6 27.10.2015 2,37,35,000 FHL Shares pledged in favour of YBL to secure Rs.250 Crores credit facility to FSSPL. Vol. 174, Pg.267 29.10.2015 30.09.2015 Facility by LVB continued for Sanction Letter dated 29.10.2015 Vol. 202, Pg.2 10.11.2015 Brand License Agreement executed between RHC and SRL 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.13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65,02,852 FHL shares in favour of YBL by FHHPL Vol. 174, Pg.346,392 Vol. 200, Pg.8 Pre 29.04.2016 1,36,50,000 FHL Shares stood encumbered in favour of ABL Vol. 197, Pg.3 Pre 29.04.2016 8,06,38,352 FHL Shares were encumbered in favour of YBL Vol. 228, Pg.4 Vol. 200, Pg.8 29.04.2016 Arbitral Award in favour of Daiichi Vol.5,6, Pg.8 18.05.2016 Ss.47/49 Arbitration and Conciliation Act, 1996 preferred before the Delhi High Court by Daiichi being OMP (FEA) Vol. 1, Pg.24 (Comm.) No. 06/2016 20.05.2016 Credit Facility Agreement containing a top up mechanism between RHC and CSFIPL secured by pledge of 68,50,000 FHL Shares Vol. 171, Pg.117, 232 24.05.2016 First Undertaking before the Delhi High Court by Respondents Vol. 1, Pg.78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndby Letter of Credit for USD 72.5 mn executed between RCMIML and ABL. Vol. 169, Pg.424 30.09.2016 50,00,000 FHL shares additionally pledged in favour of ABL w.r.t. Standby Letter of Credit for USD 72.5 mn executed between RCMIML and ABL Vol. 169, Pg.424 30.09.2016 10,00,000 FHL shares additionally pledged in favour of ABL w.r.t. Standby Letter of Credit for USD 72.5 mn executed between RCMIML and ABL Vol. 169, Pg.424 30.09.2016 2,00,000 FHL shares additionally pledged in favour of ABL w.r.t. Standby Letter of Credit for USD 72.5 mn executed between RCMIML and ABL. Vol. 169, Pg.424 30.09.2016 Total 40,75,000 FHL Shares stood encumbered in favour of RBL Vol. 201, Pg.4 04.10.2016 Release of 20,00,000 FHL Shares by ABL [w.r.t. 29.09.2015] Vol. 197, Pg.4, 44 07.10.2016 OIL paid back Rs.161 Crores to YBL against loan sanctioned on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Crores), FSSPL (Rs.250 Crores) Vol. 176,177 Pg.797, 811 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HL shares additionally pledged in favour of ABL in relation to Standby Letter of Credit for Rs.100 crores executed between DION and ABL. Vol. 170, Pg.649 24.05.2017 Letter of Intent issued by IHH Healthcare Berhad to FHL and connected entities in furtherance of a proposal for acquisition Vol. 86, Pg.32 02.06.2017 Top up Pledge over additional shares of FHL created in favour of Ambit due to margin shortfall Vol. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re RHC Holding Facility Vol. 168, Pg.204 18.07.2017 Pledge Agreement to create a Cross Collateral over 45,83,833 FHL Shares already pledged [w.r.t. 19.05.2017 ABL] to secure Ligare Facility Vol. 168, Pg.319 18.07.2017 Pledge Agreement to create a Cross Collateral over 64,16,667 FHL Shares already pledged [w.r.t. 19.05.2017 ABL] to secure Ligare Facility Vol. 168, Pg.344 18.07.2017 Pledge Agreement to create a Cross Collateral over 10,00,000 FHL Shares already pledged [w.r.t. 30.06.2014 28.07.2016 ABL] to secure 30.09.2016 Facility Vol. 169, Pg.446 18.07.2017 Pledge Agreement to create a Cross Collateral over 45,83,333 FHL Shares already pledged [w.r.t. 19.05.2017 ABL] to secure 30.09.2016 Facility Vol. 169, Pg.470 18.07.2017 Pledge Agreement to create a Cross Collateral over 64,16,667 FHL Shares already pledged [w.r.t. 19.05.2017 ABL] to secure 30.09.2016 Facility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BL [w.r.t. 30.03.2016, 27.07.2016] Vol. 200, Pg.15 24.07.2017 Ambit released the pledge over shares of FHL and REL Vol. 231, Pg.2 08.08.2017 RBL released 2,00,000 FHL Shares [w.r.t. 29.11.2012] Total no. of encumbered shares of FHL with RBL stood at 38,75,000 Vol. 201, Pg.7 10.08.2017 RBL received Rs. 3.20 Crores [w.r.t. 29.11.2012] Vol. 201, Pg.8 11.08.2017 Order by this Court directing Status Quo w.r.t. shareholding of FHHPL in FHL 11.08.2017 Total FHL shares that stood encumbered in favour of ABL were 1,83,75,000 Vol. 228, Pg.4 14.08.2017 Loan Recall Notice issued by RBL w.r.t. 27.07.2012 Facility Vol. 201, Pg.8 Vol. 23, Pg.42 14.08.2017 LVB sold 1,00,000 FHL shares and realised Rs.1,49,79,271 Vol. 202, Pg.4 14.08.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 having pledged 12,25,000 shares of FHL Vol. 38 06.10.2018 Daiichi filed Contempt Petition before this Court Vol. 39, Pg.5 29.10.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for causing wrongful loss of Rs.150 crores FIR 82/2020 Vol. 227 @ Pg.29 23.09.2019 FIR 189/2019 registered based on Complaint 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 18.11.2019 Recovery from FHL based on assurances made by Singh Brothers before the Delhi High Court O. Volume 223: Petitioner s Submissions regarding role of Shivender Mohan Singh In every aspect, the Singh Brothers were together till Delhi High Court pronounced 31.01.2018 Judgement and Singapore High Court pronounced judgement dated 21.12.2018 P. Volume 224: Submissions by Yes Bank Limited (Noticee No.1) YBL is a secured creditor A clean chit has been given to YBL insofar as Subject Encumbrances are concerned YBL, vide submissions in Volumes 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 Collater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertakings and other securities were available to the banks and financial institutions. However, what was proceeded against were the shares held by FHHPL in FHL. (C) The manner in which the controlling interest in FHL, which company in turn controlled all the physical assets, was diluted, was doubtful and questionable. Similarly, the acquisition of the controlling interest by IHH/NTK would show that the very same assets are now being controlled by RHT which was nothing but a trust established by Contemnor Nos. 9 and 10. (D) These transactions were not bona fide and in order to unravel the truth, this Court may consider appointing Forensic Auditor(s). 18. In the written submissions 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares due to any steps taken by Daiichi to enforce the Award; and (iv) Judgment Debtors did not take steps in the commercial interest of FHL. In respect of I.A. No. 43119 of 2020 filed by MMS in the SLP, the Petitioner filed its reply [SLP Vol 110/Page 1-11], inter alia, agreeing with the proposal for a forensic audit of all entities in Table A and Table B [SLP Vol 222/Page 2]. Furthermore, the Petitioner also agreed to MMS's request for the sale of land parcels, brand/trademarks and operating companies, and the monies so realized to be deposited with this Hon'ble Court in the Petitioner's favour. 4. In response to this Hon'ble Court's query regarding the proposal 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions had actively misled this Hon ble Court along with the Judgment Debtors to obtain orders dated 15 February 2018 (modification of orders dated 11 August 2017 and 31 August 2017 in SLP) from this Hon'ble Court by submitting that any change in the status of encumbered assets of the said downstream companies or any change in the shareholding of Respondent No. 1 and 8 herein in the downstream companies in order to reduce liabilities, will not have any negative impact, either on the value of assets or the no. of unencumbered shares [SLP Vol. 187/Page 4/Paragraph 4]. It was thus submitted by the Petitioner that the banks and financial institutions were fully aware of the court orders and the assurances given 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement proceedings drawing attention to the press releases dated 27 March 2018 and 13 July 2018 showing that IHH was proposing to acquire FHL and assets of RHT Trust [SLP Vol 40/page 83-85]. The Petitioner prayed that the Judgment Debtors be directed to deposit the entire decretal amount and FHL be injuncted from proceeding ahead with the transaction with IHH Healthcare [SLP Vol 40/page 94]. FHL filed a reply to IA 9264 of 2018 on 31 July 2018 [SLP Vol 40/Page 98-127]. The Petitioner has submitted that sufficient material was placed before this Hon'ble Court which established that (i) the Judgment Debtors not only breached the undertakings given to the DHC but they also violated the orders of this Hon'ble Court; (ii) false affidavits 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 J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. Mr. Datar briefly reiterated the Petitioner's position on the RHT transaction during the closing arguments on 12 May 2021. Mr. Datar also placed reliance on the principle of tort of conspiracy to explain the large-scale conspiracy carried out by the banks and financial institutions in tandem with the Respondents, FHL and IHH, and argued that that it is only just and proper that FHL is directed to make available the amount of INR 4000 crores for Daiichi to ensure restitution in respect of the undertaking given by its Chief Executive Officer and Managing Director (SMS and MMS respectively) on 21 June 2017 [SMC 26/Page 63/Paragraph 97]. 17. In response to this Hon'ble Court's query regarding the proposal for purging of contempt, 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 executi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf by the High Court of Delhi as well as by this Hon'ble Court; and (iv) since Religare Group's insolvency petitions are admittedly premised on fraud, they must not be permitted to be admitted. 22. During the course of closing submissions on behalf of the Petitioner, Mr. Rakesh Dwivedi, sought a continuance of the stay order dated 05 April 2019 as it has a direct bearing on the outcome of the present Contempt Petition. It was submitted on behalf of the Petitioner that, in the absence of continuation of this order, the assets that may be utilized for the purging of contempt committed by the Singh Brothers will become subject to insolvency proceedings thereby jeopardizing the process of purging of contempt. [SLP Vol 222/Page 7]. F. Miscellaneous 23. 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 29 April 2016 was against 19 respondents. Repeated assurances I undertakings were given to the Delhi High Court that the total assets were in excess of INR 10,000 crores and that in any event, a sum of INR 2341.9 crores will always be available to satisfy the award I decretal debt. These undertakings were on behalf of the entire group, including Fortis Healthcare Limited ( FHL ), as has been pointed out in written submissions [SLP Vol 185] and reiterated in these submissions. In I.A. No. 9264 of 2018 was filed by Daiichi on 16 July 2018 in the Delhi High Court to stop the takeover of FHL by IHH. A reply dated 2018 filed by R19 (RHC) inter alia that: Given the group's liabilities, including the award .... . Thus, the award is equally the liability of FHL, as it is of other group companies of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopment Authority v. Skipper Construction (2007) 15 SCC 60 I - For text, see SMC Vol 36, P 227-251 on para 24-28 makes it amply clear that the court can give appropriate directions for remedying and rectifying the things done in violation of its orders. (b) A reference can also be made to the decisions in s (1995) 2 scc 584, 602-603 (paras 22 and 23) , which held that this Hon'ble Court can take cognizance even for violation of orders of the High Court. (This was overruled on another point in Supreme Court Bar Association v. Union of lndia (1998) 4 SCC 409 - the Supreme Court could not remove an advocate's name from the rolls of the State Bar Council. ). (c) At stake in the present case is the sanctity and validity of undertakings given to the Delhi High Court and the Supreme Court. If these can be violated with impunity, 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business operations continued without any hindrance. (g) The undertakings given by Singh Brothers are thus binding on FHL as well. These undertakings, given at the time when they had more than 71 % control, would be binding even after their FHL shareholding was reduced. It is submitted that an undertaking given to the court by a person or persons who are majority shareholders, will continue to bind that company even if their shareholding is subsequently reduced to a minority. This is particularly important when such shareholding is reduced in violation of assurances and undertakings to a court. (h) In Rosnan Sam Boyce v. B.R. Cotton Mills Ltd., (1990) 2 SCC 636, (para 7, 8, 9 at page 58-60 of SMC Vol 36) it was held that the undertaking given by the person in management and control, will be the undertaking of the company itself. In the same way, the undertaking 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions, were as under: Loan extended by Loan extended to Amount Cumulative (Rs. Crores) amount (Rs. Crores) 1. Modland Wears Private Limited Gurinder Singh Dhillon 1.57 223.15 Gurkirat Singh Dhillon 88.78 Gurpreet Singh Dhillon 79.71 Nayan Tara Dhillon 0.61 Shabnam Dhillon 52.48 2. Devera Developers Private Limited Gurkiran Singh Dhillon 65.47 122. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 28.07.2016. Out of the 8,97,81,906 FHL shares, 5,41,35,500 FHL shares were encumbered under various agreements, prior to 30.03.2016. A further 2,65,02,852 FHL shares were encumbered under agreement to pledge dated 30.03 .2016. Thus, prior to the date of the arbitral award (29.04.2016), a total of 8,06,38,352 FHL shares were encumbered in favour of YBL. Subsequently, on 28.07.2016, i.e. after the 'First Assurance' by the Judgment Debtors (before the Hon'ble Delhi High Court in OMP EFA 6 of 2016) and prior to the Second and Third assurance, a further 91,43,554 FHL shares were encumbered under another agreement to pledge. Therefore, by 28.07.2016, 8,97,81,906 FHL shares were encumbered in favour of YBL, prior to the second to fifth assurances given by the JDs before the Hon'ble Delhi High Court. These 8,97,81,906 FHL shares were sold only pursuant to this Hon'ble Court's Order of 15.02.2018.(Pg. 1, Vol 200) 8. It is pertinent to reiterate that YBL was never a party before the Hon'ble Delhi High Court when the assurances were gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 restriction on either lending to the JDs or their group companies post 24.05.2016, nor was YBL informed of any injunction existing qua the FHL shares or any other assets of the JDs' or their group companies. Moreover, FHHPL, under the various pledge agreements executed with YBL, also gave a representation that there was no litigation pending qua the FHL shares. (For eg., Clause 4.l(o), Pg. 439, Vol 175) This shows that it was a well-accepted position among the different stakeholders including Daiichi that there was no such injunction / restriction qua the FHL shares, prior to 11.08.2017. (Paras 43 to 46, Pg. 33, Vol 173) 12. Therefore, there is absolutely no legal basis to nullify YBL's subject loan and security agreements executed between 24.05.2016 and 11.08.2017. Thus, to hold YBL, a bona-fide secured creditor, accountable for certain unilateral assurances given by the JDs to the Hon'ble Delhi High Court, would be a travesty of justice. Similarly, preliminary submissions advanced on behalf of ABL were as under: 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, and are unsupported by any evidence. This is also evident from the fact ABL has several recovery proceedings pending against the JDs and the borrowers before various forums for an outstanding amount. As stated in its compliance affidavit, even today there is approximately an outstanding amount of INR 624 Crores (approx.) as of 22.02.2021. (Paras 39 to 42, Pg.25, Vol 167) 12. 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 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 ABL that there was any restricti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecured 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 the Singh Brothers to the Hon'ble Delhi High Court that they would not alienate their assets. At some point, the Decree Holder also carried the matter to this Court, and undertakings were also given in this court by the Decree Holder to the same effect. (c) It appears that in the meantime since there was a fall in the value of the shares of FHL, the banks from whom loans had been obtained against the security of the shares, invoked pre existing pledges. In the petition for leave to appeal filed by the Decree Holder, initially on 11 August 2017, this Hon'ble Court injuncted the banks from encashing any pledges. This order however came to be modified on 15 February 2018 when this court clarified that the injunction would relate only to pledges created after 11 August 2017. (d) Upon the modification of the order, the bankers who now became entitled to enforce the pledges took steps to transfer the shares to themselves or their nominees including the sale of the shares, and this caused a dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied 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 order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Thousand Seven Hundred and Forty-Two Only), which is an amount equivalent 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary 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. 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 commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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