Justice N Seshasayee of Madras High Court hits petition out of the park in his 'final match'

In a judgment laced with cricket analogies, Justice N Seshasayee of the Madras High Court on January 7 delivered a scathing critique of the legal strategy taken by a company while dismissing its petition in a long-standing corporate dispute. [CEPL v. Union of India & Ors].As he likened the 16-year-old dispute to a long-drawn cricket match, the judge said in the epilogue, "The match is over. The victorious fielding team has retired to the pavilion. I see the batsman still at the crease. It may require some time for team-petitioner to realise that it has lost a match that it was desperate to win."In the initial part of the judgment, the judge who retired on January 7 said,"And, here I am, stepping into officiate the final moments of the game in this ground. “How many times have I been here? How many matches would I have umpired?” - A thought passed by. Cautioning my mind not to wander, I settled down to umpire another game. Will the petitioner hit its way to its team's victory or is the team-respondents going to steal the show? I am not interested in the outcome. For, I am neither a player nor a spectator.".The case revolved around Cheran Enterprises’ litigation against its erstwhile foreign investors ORE and Athappan, who had invested ₹75 crore and ₹4 crore respectively. However, the deal fell through and the matter reached the Company Law Board (CLB), the predecessor to the National Company Law Tribunal (NCLT).Cheran Enterprises is a part of the KC Palaniswamy Group (KCP), the promoter in this case.In 2008, the CLB passed an order directing Cheran to return the investments made by ORE and Athappan, totaling ₹79 crore, with 8% interest per annum, within 12 months. If Cheran failed to meet the payment obligations, its subsidiary Vasantha Mills Limited (VML) was required to transfer 17.15 acres of land to ORE and 7.80 acres to Athappan.However, the company launched a series of challenges, arguing over share-pricing and FEMA regulations. KCP ultimately offered to pay ₹12,41,419 (0.165%) and ₹45,663 (0.11%) to the two investors, respectively. KCP also communicated with the Reserve Bank of India (RBI) the difficulties of transferring the land to foreign entities. The present litigation is a writ petition challenging RBI’s communication from 2020 on this issue..Criticising the strategy by the KCP team, the judgment said, “KCP’s approach to the match he played, and is playing is a case study in the art of avoiding the legal obligation. This Court has read KCP's intent as like the other Courts earlier, for his moves are childish and pretentious – something a lower division club may attempt in a league match, but they may not work at this level."Furthermore, the judgment said that “KCP finds itself on an unplayable and slippery wicket,” emphasising the futility of its strategy.KCP argued that shares of the dysfunctional company should be valued under FEMA regulations, reducing its financial liability. The Court dismissed this argument as one of a desperate “child clutching to its pet teddy bear.”.KCP claimed foreign investors could not own immovable property in India. The CLB had already addressed this by permitting ORE and Athappan’s nominee to purchase the property.Describing these tactics as “pretentious,” the Court observed that KCP’s strategy unraveled early in the match. “The knell of his strategy failing him was heard when the second CLB order allowed the nominee of ORE and Athappan to purchase the property,” the judgment stated.With multiple defeats in lower courts and the Supreme Court, KCP’s required run rate had touched “near infinity,” the judgment noted. “Despite the scars of earlier defeats, only KCP and his teammates believe their strategy may still work,” the Court quipped.In its poetic conclusion, the Court declared, “The match is over. The victorious fielding team has retired to the pavilion. I see the batsman still at the crease. It may require some time for team-petitioner to realize that it has lost a match that it was desperate to win......Apparently, KCP and his team failed to realise that cricket is synonymous with fairness, and it knows how to assert itself. In retrospect I thought it was not petitioner's bad strategy that let it down, but its unfairness in developing the very strategy.".The Court also reflected on the values of fairness, equity and dharma, emphasising that “unfairness may tempt; unfairness may even pay at times; but unfairness certainly fails.”Noting that this is his final judgment, Justice Seshasayee reflected on the nature of the institution and its perpetuity. “There will be another match here the next day, and yet another match, and yet another. I see the groundsmen already in action. They go through their motion. I see the sun slowly setting on the ground spreading the shadow. Time reminds me that my moment to leave the ground has arrived.”Reflecting on his judgeship and retirement, the judge said, “I turn towards the ground, give it a smile and salute it with gratitude after officiating my last match. As I walk to melt in the wilderness of this world, I heard a feeble echo of the Shakespearian lines within me: 'If we do meet again, why, we shall smile; if not this parting was well made'.”.The petitioners were represented by Senior Advocates Darius Khambata and Gopal Sankaranarayanan, who were briefed by Advocate Ramakrishnan from M/s Waraon and Sai Rams.Central Government Standing Counsel Venkataswamy Babu appeared for the Union.Advocates T Poornam and VS Rishwanth represented RBI.Senior Advocate KG Raghavan, assisted by Advocates K Gowtham Kumar and Aditya Vikram Bhat, appeared for ORE.Senior Advocate J Sivanandaraj, assisted by Advocate Ridhima Sharma, appeared for Athappan.Senior Advocate P Wilson and Advocate Arva Merchant represented Vasantha Mills.Advocate Nithyaesh Natraj appeared for CG Holdings..[Read Judgment]