Daiichi: Supreme Court finds no error in the judgment holding Singh brothers guilty of contempt, dismisses review petition
Litigation News

Daiichi: Supreme Court finds no error in the judgment holding Singh brothers guilty of contempt, dismisses review petition

Shruti Mahajan

The Supreme Court on April 23, dismissed the review petition filed by the former promoters of Ranbaxy, Malvinder and Shivinder Singh, seeking a review of the Court's judgment holding the two guilty of contempt of Court.

The Bench of Chief Justice of India, Justice SA Bobde with Justices Deepak Gupta and Sanjiv Khanna took up the review petitions filed by the Singh brothers for hearing by circulation on April 23.

The former promoters of Ranbaxy were held to be guilty of contempt of Court by the Supreme Court in November last year. The Bench of the then CJI, Justice Ranjan Gogoi with Justices Deepak Gupta and Sanjiv Khanna had held that the contempt can be purged by the two upon payment of Rs 1,170.95 crores each.

When the review petitions were taken up for hearing, the Court dismissed the same having found no error in the judgment for the same to be called for review. The Court, while dismissing the pleas, therefore, said:

We do not find any error in the Judgment impugned, much less an apparent error on the face of the record, so as to call for its review. The Review Petition is, accordingly, dismissed.
Supreme Court

Resultantly, the judgment of November 2019 stands binding on the two brothers who have till date not purged their contempt in accordance with the directions of the Supreme Court.

In the November 2019 judgment, the Apex Court had also, along with the Singh brothers, found various directors of Indiabulls Housing Finance Limited and Indiabulls Ventures Limited also guilty of contempt. These directors were given an opportunity to purge themselves of contempt by depositing the value of 12,25,000 shares as on August 31, 2017 in the Bombay Stock Exchange within eight weeks.

The Court had then also initiated suo motu contempt proceedings against Fortis Healthcare and had refused to lift the stay on the IHH Healthcare’s open offer for Fortis.

In February 2019, the Supreme Court was hearing a petition filed by the Japanese company Daiichi that had alleged that the Singh brothers had acted against the Supreme Court’s order which had mandated the maintenance of status quo on the sale of Fortis Healthcare. The Supreme Court had sought the personal presence of the Singh brothers to interact with them on this issue.

On interacting with the brothers, the Court had first asked them to come up with a resolution plan and later, on being dissatisfied with their replies on the same, warned them of being jailed for contempt if they continued to violate the Court’s orders. In March that year, the Court sought a concrete plan to resolve the issue of payment of over Rs 4000 crore by the Singh brothers to Daiichi to honour the arbitral award.

Daiichi had told the Supreme Court that the brothers had diverted funds despite the Court ordering them to maintain their stake in Fortis Healthcare. In this light, a suggestion was made to sell off the property of the contemnors under the instructions of the Court.

The dispute between Daiichi and the Ranbaxy promoters had reached the Apex Court after the Delhi High Court had upheld the enforceability of an Arbitral award passed by a Singapore-based Arbitration Tribunal. Daiichi moved the Supreme Court with a contempt plea against the former promoters of Ranbaxy on the grounds that the payment of over Rs 3500 as per the arbitral award by a Singapore-based Arbitration tribunal was not honoured and the Delhi High Court had upheld the enforceability of this award.

In December 2018, the Supreme Court had stayed the sale of Fortis Healthcare to Malaysia’s IHH Healthcare and had directed the parent company of Fortis Healthcare, RHC Holding and Oscar Investment – owned by the Singh brothers – to maintain status quo with respect to the deal. Consequently, IHH Healthcare’s acquisition of stake in Fortis was stayed.

It was Daiichi Sankyo’s case, however, that the Singh brothers had created fresh encumbrances on 1.2 million shares of Fortis, which is in violation of the Court’s order. Daiichi has also alleged that the two brothers have not honoured their “numerous assurances that there will be no fait accompli and their assets will always be available” towards the satisfaction of Daiichi’s Rs 3,500 crore claim.

Read Order:

Malvinder Singh vs Vinay Prakash Singh.pdf
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