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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.9103 OF 2014

PRAMOD JAIN AND OTHERS                                          …APPELLANT(S)

VERSUS

SECURITIES AND EXCHANGE BOARD OF INDIA      ...RESPONDENT(S)

J U D G M E N T  

ADARSH KUMAR GOEL, J.

1. This appeal has been preferred under Section 15 Z

of the Securities and Exchange Board of India Act, 1992

(the Act)  against order dated 6th August, 2014 passed by

the Securities Appellate Tribunal,   Mumbai (the SAT)   in

Appeal  No.111  of  2012.   The  SAT  upheld  the  order  of

Securities and Exchange Board of India (SEBI) dated 13th

April, 2012 rejecting the application of the appellants for

withdrawal  of  the  public  offer  to  acquire  shares  of  the

Golden Tobacco Ltd. in terms of public announcement (PA)

dated November 12,  2009 under  the provisions  of  SEBI

(Substantial  Acquisition  of  Shares  and  Takeovers)

Regulations, 1997 (the Takeover Regulations).

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FACTS :  

2. Golden  Tobacco  Limited  (the  target  company)  is  a

company  having  its  registered  office  at  Tobacco  House,

S.V. Road, Vile Parle (West), Mumbai – 400 056.  The equity

shares of the target company are listed on the Bombay

Stock  Exchange  Limited  (BSE)  and  the  National  Stock

Exchange of India Limited (NSE).   

3. On November 12, 2009, Mr. Pramod Jain and Pranidhi

Holdings  Private  Limited  (the  acquirers)  along  with  J.P.

Financial  Services  Private  Limited  (the  person  acting  in

concert  (PAC)  made  PA  through  VC  Corporate  Advisors

Private Limited (the merchant banker) in accordance with

regulations 10 and 12 read with regulation 14.  As on the

date of the PA, the acquirers and PAC collectively held 11,

39, 002 equity shares (6.47%) of the target company.  The

PA was voluntarily made by the acquirers and the PAC to

acquire  44,  02,  201  equity  shares  (25%)  of  the  target

company  from  its  equity  shareholders  at  a  price  of

Rs.101/- (the offer price) per equity share.  At that time,

market price of the target company shares was Rs.109/-

per share.   Networth of the target company as on  31st

March, 2009 was Rs.42.44 crores.  Net current assets were

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C.A. No.9103 of 2014

Rs.134.4  crores  and  gross  sales  were  Rs.173.68  crores.

The offer was for hostile takeover of the target company.

The PA mentioned that the prime object of the offer was to

acquire substantial shares/voting rights accompanied with

the change and control of the management of the target

company.  The acquisition was in the nature of strategic

investment for diversification and growth and to reap the

benefit of corporate opportunities.  The draft letter of offer

also mentioned that the PAC had advanced loan against

shares of the target company and on account of default, it

acquired the said shares representing 5.05% of the equity

share  capital.   The  acquirers  and  the  PAC  had  also

acquired 71034 equity shares at highest and average price

of  Rs.100.15  and  Rs.89.13  respectively.   Thus,  the

acquirers and the PAC had 6.47 % of the issue of equity

share capital as on the date of PA.  The background of the

acquirers mentioned in the DLO was that Mr. Pramod Jain

was prime Director of PHPL and had experience in financial

and consultancy services.

4. The acquirers and PAC, through the merchant banker,

filed the draft letter of offer (DLO) with SEBI on November,

26,  2009.   During  examination  of  the  DLO,  certain

complaints  were  received  by  SEBI  against  the  acquirers

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and PAC as well  as  against  the target  company and its

promoters.    The  appellants  (the  acquirer)  in  their

complaints  to  SEBI  and  other  proceedings  including

petition  under  Section  397/398  of  the  Companies  Act

before the Company Law Board and a suit before the Civil

Court  inter  alia  questioned  the  transaction  for  joint

development  of  Vile  Parle  Property  in  terms  of

Memorandum  of  Understanding  (MoU)  dated  26th

September,  2009  with  Sheth  Developers  and  Suraksha

Realty  Ltd.   Various  correspondences  were  exchanged

between SEBI  and the merchant banker,  acquirers,  PAC,

the target company and certain other entities in respect of

such complaints.

5. The  appellants  vide application  dated  8th October,

2011  sought  permission  to  withdraw  the  offer  under

Regulation 27(1)(d).   The stand of  the appellants in the

said letter was that the SEBI had not taken any decision on

the DLO in two years during which period the management

of the target company had systematically siphoned off its

coffers, depleted its valuable fixed assets and eroded its

net worth substantially with the intention of making it a

shell company.  This has defeated the very object of the

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offer, without any fault on the part of the acquirers.  The

management had availed huge high cost borrowing from

banks  and  financial  institutions  against  its  property,

including  18.7  per  cent  shares  out  of  the  promoters’

shareholdings.   Disputes  were  pending  before  the

arbitrator  arising  out  of  default  in  payments.   Most

valuable  assets  of  the  target  company  had  been

encumbered in violation of  SEBI  regulations and against

the  interest  of  minority  shareholders  and  the  acquirers.

Since  the  date  of  PA,  financial  position  of  the  target

company had deteriorated substantially.

ORDER OF SEBI

6. The SEBI vide order dated 13th April, 2012 declined to

permit  withdrawal  of  the  PA  but  observed  that  alleged

violation of Regulation 23 by the target company shall be

investigated.  It was held that as per Regulation 23(1), the

target company was entitled to dispose of its assets with

the  approval  of  the  shareholders  even  after  the  PA.

Correspondence which the SEBI had with the acquirers was

referred to, with a view to explain the delay in deciding the

DLO.   It  was  observed  that  the  SEBI  had  informed  the

merchant  banker of the appellants on 3rd February, 2010

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that it was not competent to administer the authenticity of

the  process  of  Resolution  in  the  General  Body  Meeting

(GBM)  dated  18th January,  2010.   The  merchant  banker

vide letter dated 5th May, 2010 informed the SEBI that the

acquirers  had  reached  a  settlement  with  the  target

company and withdrawn their petition before the Company

Law Board (CLB) against the Resolution dated 18th January,

2010.  SEBI had also advised the merchant banker that it

had  not  been  provided  any  material  in  support  of  the

allegation  of  violation  of  Regulation  23  by  the  target

company  in  selling  its  assets.   The  merchant  banker

informed the SEBI vide letter dated 19th May, 2011 that the

acquirers  had  filed  a  suit  for  restraining  the  target

company  from  creating  any  third  party  interest  in  the

assets of the target company.  The SEBI had also received

complaints against the acquirers and the PAC which were

being  looked  into  when  the  PAC  vide  letter  dated  2nd

August, 2011 sought permission to withdraw the PA.  Vide

letter dated 9th August, 2011, the acquirers requested that

the process of open offer be kept in abeyance.  SEBI vide

e-mail  dated  9th September,  2011  responded  to  the

merchant banker, seeking tabulated list of the allegations

of the acquirers and the PAC but instead of doing so, the

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merchant banker forwarded request for withdrawal of the

PA.   It was observed that in the circumstances there was

no delay on the part of the SEBI.   It was further observed

that  the acquirers  had challenged the Resolution of  the

Extra Ordinary General Meeting (EGM) and had also filed a

suit.  The acquirers entered into an amicable settlement

before the CLB.   SEBI  had no jurisdiction in the matter.

Referring  to  Regulation  22,  it  was  observed  that  the

acquirers  could  make  PA  only  after  most  careful

consideration and must ensure that it is able to implement

the offer. Referring to Regulation 27, it was observed that

public offer once made could not be withdrawn except in

the circumstances provided in the said Regulation which

had  to  be  construed  strictly.   Unchecked  automatic

withdrawal of offer was capable of being misused.  It was

also  observed that  the  acquirers  should  have used  due

diligence with regard to  the allegation in FIR dated 25th

July, 2009 about personal borrowings by promoters of the

target company by sale of prime properties as the  PA was

much after the FIR.  The acquirers and the PAC had already

purchased substantial shares of the target company and

thus, could not make PA without exercising due diligence

regarding  the  financial  condition  and  quality  of

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management of the target company.  The acquirers were

not strangers to the target company.  They had 6.47 per

cent shares.   Discovery of  adverse effects  pertaining to

financial  health  subsequent  to  the  PA  could  not  be  a

ground to withdraw the PA.  Doing so will jeopardize the

interests  of  the  shareholders.   The  takeover  regulations

laid down a self-contained code and withdrawal of public

offer was not governed by principles of withdrawal of an

offer under the Contract Act, 1872.   

ORDER OF SAT

7. The above view has been affirmed by the SAT in its

impugned  order  (by  majority).   As  regards  the  timeline

stipulated in Regulation 18, it was observed that under the

second proviso thereto, the SEBI could take time in making

inquiry  on  a  complaint  and  thereafter  could  call  for  a

revised  letter  of  offer  with  or  without  re-scheduling  the

date  of  opening  or  closing  the  offer.   However,  it  was

observed  that  in  the  present  case,  SEBI  was  wholly

unjustified in taking more than two years for offering its

comments  on  the  letter  of  offer  submitted  by  the

appellants.  This, however, did not constitute a ground to

permit withdrawal of the PA.  As regards the contention

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that the public offer was frustrated and became impossible

of implementation on account of encumbering of the most

valuable  property  of  the  target  company in  violation  of

Regulation 23 and other steps of  the promoters making

the target company a shell company, it was observed that

the target company had taken decision to develop its Vile

Parle  property  even before  the  PA.   Appellant  No.1  had

given his offer for joint development of the said property

on 29th September, 2008 but the said offer was rejected

and Sheth Developers were shortlisted for the purpose.  It

was thereafter that the appellants decided to make hostile

takeover public offer to frustrate the decision of the target

company to develop the property with Sheth Developers.

It will be appropriate to refer to the findings of the SAT in

this regard:  

“14.  We  see  no  merit  in  the  above  contentions. Admittedly,  GTL  had  decided  to  develop  the Vile-Parle  property  even  before  public  offer  was made by appellants on November 12, 2009. In fact Appellant  No.  1  had  made  an  offer  to  GTL  on September  29,  2008  for  joint  development  of Vile-Parle property by offering ` 150 crores as non refundable amount and had suggested profit sharing in the joint venture at a ratio 50:50. However, GTL rejected  the  offer  made  by  appellants  and  on recommendation of Ernst & Young shortlisted Sheth Developers as best 20 bidder for joint development of Vile-Parle property. Thereupon appellants decided to make hostile public offer on November 12, 2009 with a view to frustrate decision of GTL to develop the  Vile-Parle  property  jointly  with  Sheth

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Developers.  Although  object  of  the  proposal  to acquire 25% shares of GTL at Rs. 101/- per share as against the market price of Rs.109/- per share, as stated in the public offer was to obtain substantial stake/voting rights of GTL, it is not in dispute that appellants  were  basically  interested  in  developing the  Vile-Parle  property.  Thus,  it  is  evident  that appellants  being  frustrated  in  their  endeavour  to develop the Vile-Parle property, had resorted to the mechanism of public offer with a view to frustrate the  decision  of  GTL  in  jointly  developing  the Vile-Parle  property  with  Sheth  Developers. Therefore, appellants having made public offer out of  frustration  on  account  of  not  being  able  to develop the Vile-Parle property, are not justified in alleging  that  entrusting  the  development  of Vile-Parle  property  to  Sheth  Developers  has frustrated the public offer made by appellants.  

15. Admittedly, after making public offer, appellants had filed Company Petition No. 3 of 2010, wherein specific grievance was made to the effect that GTL had  entered  into  MOU  with  Sheth  Developers without  disclosing  all  material  facts  to  the shareholders  and  without  the  approval  of shareholders  which  was  in  gross  violation  of regulation 23 of SAST Regulations, 1997. It was also alleged in the Company Petition that the promoters of  GTL have been mismanaging the affairs  of  the company and have siphoned of huge amounts from the company, as a result whereof,  there has been deep decline in the performance and profitability of the company. Appellants had also sought an order restraining  GTL  from  holding  EGM  which  was scheduled to be held on January 18, 2010.

16. Company Law Board in its order dated January 19, 2010, recorded statement made by counsel for GTL  that  in  the  EGM  held  on  January  18,  2010 requisite resolutions have been passed in relation to development  of  Vile-Parle  property  and  in implementation  of  the  said  resolution  third  party rights have been created.  By that order Company Law  Board  directed  that  during  the  pendency  of Company Petition No. 3 of 2010 GTL shall  not act upon resolution dated January 18, 2010 any further. From aforesaid order passed by Company Law Board it  is  clear that in view of resolution passed in the

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EGM  held  on  January  18,  2010,  violation  of regulation  23  committed  by  GTL  in  relation  to development of  Vile-Parle  property stood rectified. Dispute, if any in relation to passing of resolution on January  18,  2010  was  to  be  considered  at  the hearing of Company Petition No. 3 of 2010.

17.  However,  on  February  8,  2010,  appellants withdrew Company Petition No.3 of 2010 by merely recording that the parties have amiably settled the matter  without  any  further  claims  against  each other.  Having  settled  the  dispute  relating  to development  of  Vile-Parle  property  with  the promoters/management  of  GTL  on  the  basis  of undisclosed  reasons  and  having  withdrawn Company Petition No. 3 of 2010 unconditionally, it is not  open  to  appellants  to  allege  that  their  public offer is frustrated on account of GTL entering into MOU  with  Sheth  Developers  for  development  of Vile-Parle property.

18. Similarly, having settled the dispute relating to siphoning of funds by GTL during 2009-2010 which plea was specifically raised in Company Petition No. 3 of  2010, appellants are not justified in agitating the very same issue before SEBI on ground that GTL has siphoned of its funds during the year 2009-2010 and 2010-2011.  In  other  words,  since  the  plea  of siphoning  of  funds  by  GTL  during  the  year 2009-2010  and  prior  thereto  having  been specifically raised in Company Petition No. 3 of 2010 and  that  issue  having  been  settled  by  appellants with  the  promoters/  management  of  GTL  for undisclosed reasons, the appellants are not justified in  reagitating the  very  same issue before  SEBI  in relation  to  siphoning  of  funds  either  during 2009-2010 or during 2010-2011.

21. It is relevant to note that appellants, subsequent to withdrawal of Company Petition No. 3 of 2010 in February 2010, have filed S. C. Suit No. 817 of 2011 in April 2011 before the City Civil Court at Mumbai, alleging for the first time that the Company Petition No.  3  of  2010  was  withdrawn  on  account  of  oral assurance given by promoters of GTL that Vile-Parle property  would  be  developed  only  after  holding public auction and that the promoters of GTL have committed breach of that oral assurance.

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22.  Admittedly,  City  Civil  Court  at  Mumbai  has granted ad- interim relief in favour of appellants on April 26, 2011 and that ad- interim order continues to be in operation till date. Therefore, irrespective of the fact that SEBI was not justified in taking more than two years for approving the draft letter of offer, in the facts of present case, grievance of appellants that the public offer is frustrated and has become impossible  of  performance  cannot  be  accepted, because,  both grounds based on which appellants had sought withdrawal of public offer, were in fact settled by appellants on the basis of oral assurance given  by  promoters  of  GTL  and  further,  for  the alleged breach of  oral  assurance,  appellants  have filed  Suit  in  the  Bombay  City  Civil  Court  and obtained stay of development of Vile-Parle property and that stay is admitted operating till date.  

23.  Strong  reliance  was  placed  by  counsel  for appellants on decision of  SEBI dated February 14, 2014 wherein penalty of ` 1 crore has been levied against the promoters of GTL interalia for violating regulation 23 of SAST Regulations, 1997. No doubt that  entering  into  an  MOU  by  GTL  with  Sheth Developers on November 26, 2009 without obtaining approval  of  general  body  of  shareholders  was  in violation of regulation 23 of SAST Regulations, 1997. However,  admittedly  on  January  18,  2010  the general body of shareholders has authorized GTL to enter  into  Joint  Development  Agreement  is  in respect  of  Vile-Parle  property.  In  view of  approval granted  by  the  general  body  of  shareholders  on January  18,  2010,  grievance  of  appellants  that Vile-Parle  property  has  been  encumbered  in violation of regulation 23 does not survive at least from January 18, 2010.

26. Apart from above, as late as on August 9, 2011 appellants had addressed a letter to SEBI requesting them to keep the process of open offer in abeyance, because, in the proceedings pending before the City Civil  Court  at  Mumbai,  GTL  had  filed  an  affidavit stating that in the board resolution dated May 25, 2011 company has decided not to proceed further with the MOU dated November 26,  2009 (wrongly stated therein as December 26, 2009) entered with Sheth Developers and instead take necessary steps to develop the Vile-Parle property by the company of its own. By the said letter dated August 9, 2011

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appellants called upon SEBI to investigate about the exact  legal  status  of  the  Vile-Parle  property, investigate regarding possession of the original title deeds  of  Vile-Parle  property  and  investigate regarding possession of  the original  title  deeds of Vile-Parle  property,  investigate  regarding usage of funds etc. It was further stated in the said letter until appellants are assured of their concern on the above issues, SEBI should keep the process of open offer in abeyance.

27.  Aforesaid  letter  dated August  9,  2011,  clearly falsifies the case of appellants that the actions taken by promoters of GTL during the course of two years has  frustrated  the  public  offer,  because,  if  public offer  was  frustrated,  appellants  would  not  have asked SEBI  to  keep the  process  of  public  offer  in abeyance. Having asked SEBI on August 9, 2011 to keep  the  process  of  public  offer  in  abeyance, appellants were not justified in filing application on October  11,  2011 seeking  permission  to  withdraw the open offer on ground that inordinate delay has frustrated the open offer.”

8. We have heard learned counsel for the parties.

CONTENTIONS OF THE APPELLANTS

9. Main contention raised on behalf of the appellants is

that there is no justification for long delay on the part of

the SEBI in granting approval to the offer of the appellant

and  situation  having  changed  to  the  prejudice  of  the

appellant,  the  appellants  are  entitled  to  withdraw  their

offer.   Since  under  the  scheme  of  the  regulations,  the

appellants could not withdraw the offer once made except

in  circumstances  mentioned  in  Regulation  27,  the

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regulation should be read as creating an obligation on the

part of the SEBI to take speedy decision and if there was

unexplained  delay  resulting  in  prejudice  to  the

appellants-acquirers,  the  appellants  are  entitled  to  be

absolved  of  the  liability  to  honour  the  offer.   GTL  had

become a BIFR company on account of siphoning off funds

by the promoters.   It  was submitted that  in absence of

obligation to approve the offer within reasonable time, the

promoters could take steps to siphon the funds or dispose

of  the assets  which could prejudice the interests  of  the

acquirer.  Thus, it could not be held that the acquirer was

indefinitely bound by the offer.  Reference was also made

to  the  timeline  provided  in  Regulation  22 and  the

provisions of Regulation 23.  It was submitted that while

normal ups and downs in the market may not be a ground

to  permit  withdrawal  of  offer,  unilateral  action  of  the

promoters resulting in transfer of assets could certainly be

the ground to permit withdrawal of offer.   The object of

binding an acquirer to the offer is to protect the interest of

the shareholders but this was required to be balanced with

the  interest  of  the  acquirer.    If  the  assets  are  unduly

transferred by the promoters after the PA, the acquirer was

entitled to be relieved from the offer. SEBI in its capacity

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as regulator has to adopt an approach which is fair to all.

In the facts of present case, the decisions of this Court in

Nirma  Industries  Limited  vs.  Securities  and

Exchange  Board  of  India1 and  Securities  and

Exchange  Board  of  India  vs.  M/s.  Akshya

Infrastructure Pvt. Ltd.2  relied upon in the impugned

order are not applicable.  Even if clause (d) of regulation

27 is read ejusdem generis so as to apply only in situations

where  it  is  impossible  for  the  acquirer  to  perform  the

public offer, it cannot exclude situations where SEBI itself

is  satisfied  that  serious  prejudice  was  caused  to  the

acquirer  by  intervening  actions  of  the  promoters  in

alienating  or  encumbering  the  assets  of  the  company,

rendering it inequitable to require the acquirer to be bound

by its offer.   Thus, the obligation of the acquirer cannot be

divorced  from  the  conduct  of  the  promoters  in  the

intervening  period.   Apart  from  distinguishing  the

judgment  in  Nirma Industries Limited  (supra) which

has been followed in the impugned order, the judgment in

M/s. Akshya Infrastructure Pvt. Ltd (supra) was also

sought to be distinguished as being limited to cases where

1

(2013) 8 SCC 20 2

(2014) 11 SCC 112

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delay by SEBI does not cause any serious prejudice to the

acquirer.   

10. Thus, the submissions of the appellants are two fold :

(i) The  SEBI  failed  to  adhere  to  the  timeline prescribed  under  the  Takeover  Code  which rendered  it  impossible  for  the  appellants  to conclude  their  open  offer.   Adherence  to timeline  prescribed  under  Regulations  18(2), 22(2),  (3)  and  (4)  are  critical  under  the Takeover Code, the Bhagwati Committee Report and the International Practice.  The time is of essence in cases of hostile takeover.

(ii) The existing promoters should not be given an opportunity to administer a poison pill to defeat the  offer  of  the  potential  acquirers.  This principle is recognized under Regulation 23.

11. Adverting  to  the  facts  it  was  submitted  that  first

complaint  against  the  appellants  was  received  on  8th

January,  2010  i.e.  21  days  after  the  PA.   Complaints

against the appellants were frivolous.  The appellants duly

responded  to  the  complaints  in  timely  manner.   The

complaints  were  made at  the  behest  of  the  promoters.

The  appellants  pointed  out  various  illegal  acts  of  the

promoters  but  the  SEBI  failed  to  take  any  action.   The

appellants requested the SEBI to keep the open offer in

abeyance till action was taken against the promoters. This

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justifies the prayer of the appellants to withdraw the open

offer.   

12. Shri  C.A.  Sundaram, learned senior  counsel  for  the

appellants  submitted  that  all  the  members  of  the  SAT

(majority as well as minority) have held the delay by SEBI

to be unjustified but still, on erroneous interpretation, right

of the appellants to withdraw the public offer has not been

upheld.   Reference  was  made  to  the  complaint  about

transfer of valuable property of the Company which was

un-encumbered at the time of PA.  The funds raised from

the transaction have been siphoned off.  One of the key

promoters was arrested by the Economic Offences Wing of

the Police and remained in jail for one and a half years.

Chargesheet was filed against him.  The financial ratio of

the  target  company  reflects  manner  in  which  financial

position  quickly  deteriorated  after  the  PA.   The  petition

filed by the acquirers before the Company Law Board was

withdrawn  on  the  assurance  of  the  promoters  that  the

assets will not be encumbered without the public auction.

Thereafter, the matter was pending in the civil suit.  Thus,

there was a breach of Regulation 23.

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13. Shri Sundaram submitted that open offer was not a

concluded  contract  but  mere  invitation  to  the  public  to

offer their shares.  The result of not allowing the offer to be

withdrawn will  be that the promoters will be able to sell

their shares at the price specified in open offer even when

the value of the shares was far lower.  This will be against

the  policy  of  law  underlying  the  Takeover  Regulations.

Moreover, the action of the SEBI was required to be fair,

reasonable  and  consistent  with  Article  14  of  the

Constitution.

14. Shri Sundaram sought to distinguish the judgments

of this Court in  Nirma Industries Limited (supra) and

M/s.  Akshya  Infrastructure  Pvt.  Ltd.   (supra)  by

submitting that unlike the said cases, in the present case,

there  was  undue  delay  on  the  part  of  the  SEBI  and

prejudice  was  caused  to  the  acquirers  for  reasons  not

attributable  to  them.  He  submitted  that  doctrine  of

frustration under Section 56 of the Contract Act will clearly

apply.  As a regulator, the SEBI is duty bound to protect

the  interest  of  the  acquirer  and  also  to  ensure  that  a

genuine  attempt  by  an acquirer  is  not  defeated by the

promoters by their unilateral action.

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RESPONSE BY THE SEBI

15. Shri  Arvind P.  Datar, learned senior counsel for the

SEBI opposed the above submissions, he submitted that

adverse  finding against  SEBI  on the  issue of  delay  was

unjustified, but even if  the said finding was upheld,  the

withdrawal  of  open  offer  was  not  permissible  under

Regulation  27(1)(d)  of  the  Takeover  Regulations.   The

acquirers held 6.47% share and had lent Rs.8.5 crores to

the  target  company.  They  had  purchased  shares  worth

Rs.63.33 lakhs before making the PA.  The first appellant

was  aware  of  the  acts  of  mismanagement  by  the

promoters of the target company.  The PA was made with

the intention of curbing fraudulent and the illegal practices

of  the  promoters  and  for  the  target  company’s  benefit.

The  appellants  approached  SEBI  to  investigate  the

illegalities knowing fully well that SEBI’s role was only to

regulate  the  security  market.   For  mismanagement  or

other illegalities, remedy was under Section 397/398 of the

Companies  Act  which remedy the appellants  had taken.

The appellants reached an amicable settlement with the

target company and thereafter approached the civil court.

It was wrong to state that the target company had become

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defunct.  The target company continued to own the Vile

Parle property worth Rs.2000 crores.   

16. Shri  Datar  submitted  that  more  than  43

complaints/letters  were received which were to be dealt

with by SEBI.  In such circumstances, it could not be held

that  there  was  undue  delay  on  the  part  of  the  SEBI  in

dealing with the DLO.

17. It was submitted that the appellants ought to have

exercised  due  diligence  before  making  the  PA.   The

appellants  were  not  strangers  and  had  6.47%  shares.

They  had  advanced  loan  of  Rs.8.5  crores  and  acquired

shares  worth  Rs.66.33  lakhs  before  the  PA.   They  were

aware of the FIR and alleged acts of mismanagement they

had resorted to public offer out of frustration against the

decision of the target company developing the Vile Parle

property with Sheth Developers.  They settled the matter

before the Company Law Board with the target company

and also approached the civil court for alleged breach of

settlement and obtained stay of development of the Vile

Parle  property.   In  these  circumstances,  the  plea  of

frustration  could  not  be  allowed  to  be  raised  by  the

appellants.  The PA could not be allowed to be withdrawn

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merely on the ground that the acquirers find it not to be a

prudent decision.  Moreover, the company still owns assets

and  was  not  a  shell  company  and  no  prejudice  was

suffered by the acquirers.  Referring to the penalty levied

by SEBI on the target company for entering into a MoU

without approval  of  the General  Body,  it  was submitted

that this could not furnish a ground for withdrawal of the

PA.   Appellants had raised the issue before the CLB and

settled the matter.

QUESTIONS

18. The  rival  submissions  require  us  to  determine  the

following questions :

(i) To what extent is the timeline laid down under the  Takeover  Regulations  required  to  be adhered to and effect of delay by SEBI in the present case?

(ii) To what extent unilateral action of the target company in dealing with the property of the company after a hostile public offer is made furnish  cause  of  action  to  the  acquirers  to withdraw the public offer and whether in the present  case,  decision  not  permitting withdrawal of public offer is justified?

THE TAKEOVER REGULATIONS

19. Needless to mention that mergers and takeovers are

well known processes in the corporate world.  Acquisition

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of  controlling  interest  of  a  company  can  be  friendly  or

hostile.   In  a  friendly  acquisition,  management  of  the

target company sells its controlling shares to the acquirer.

Where management of the target company is unwilling to

negotiate  with  an  acquirer,  the  acquirer  can  directly

approach the shareholders by making an open offer which

is  called  Hostile  takeover.    A Hostile  takeover  helps  to

unlock the hidden value of the shares and puts pressure

on  the  management  to  work  efficiently.   On  the  other

hand,  it  has  potential  of  unduly  upsetting  the  normal

functioning  of  a  target  company.   Thus,  there  is  an

undoubted need to regulate the process of acquisition and

takeovers in post- liberalisation era after 1991.  It is well

known  that  takeover  attempt  being  unpleasant  for  the

target company is  normally met with defence strategies

such as  ‘Poison Pills’  (making takeover  unviable  for  the

acquirer by making the cost of acquisition unattractive),

‘Shark  Repellents’  (measures  to  repel  an  unwanted

takeover) sale of valuable assets, etc.

20. Justice  P.N.  Bhagwati  Committee  was  appointed  in

November,  1995  to  review  the  existing  framework  of

regulations and to suggest amendments in the interest of

investors  and  all  parties  concerned  in  the  acquisition

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process.   The  Committee  kept  in  mind  the  following

principles :  

“i. Equality  of  treatment  and  opportunity  to  all shareholders.

ii. Protection of interests of shareholders.

iii. Fair  and  truthful  disclosure  of  all  material information  by  the  acquirer  in  all  public announcements and offer documents.

iv. No  information  to  be  furnished  by  the acquirer  and  other  parties  to  an  offer exclusively  to  any  one  group  of shareholders.

v. Availability  of  sufficient  time  to shareholders  for  making  informed decisions.

vi. An  offer  to  be  announced only  after  most careful and responsible consideration.

vii. The  acquirer  and  all  other  intermediaries professionally  involved  in  the  offer,  to exercise  highest  standards  of  care  and accuracy in preparing offer documents.

viii. Recognition  by  all  persons  connected  with the  process  of  substantial  acquisition  of shares that there are bound to be limitations on  their  freedom  of  action  and  on  the manner  in  which  the  pursuit  of  their interests can be carried out during the offer period.

ix. All parties to an offer to refrain from creating a  false  market  in  securities  of  the  target company.

x. No action to be taken by the target company to frustrate an offer without the approval of the shareholders.” 3

3  Justice P.N. Bhagwati Committee Report on Takeovers

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   The  Committee  made  various  recommendations

including  requirement  of  disclosure  by  the  acquirers,

procedure  for  public  announcements,  obligations  of  the

acquirers  and  the  target  company.   This  led  to  the

adoption of the 1997 Takeover Regulations.   

21. We may reproduce some of  the  Regulations  which

are necessary for the decision of controversy in the case

before us :

“  Acquisition of  fifteen per  cent  or more of the shares or voting rights of any company.

10. No  acquirer  shall  acquire  shares  or  voting  rights which (taken together with shares or voting rights, if any, held by him or by persons acting in concert with him), entitle such acquirer to exercise fifteen per cent or more of the voting rights in a company, unless such acquirer makes a public announcement to acquire shares of such company in accordance with the regulations.

Acquisition of control over a company.

12. Irrespective of whether or not there has been any acquisition of shares or voting rights in a company, no  acquirer  shall  acquire  control  over  the  target company,  unless  such  person  makes  a  public announcement to acquire shares and acquires such shares in accordance with the regulations.…

Timing of the public announcement of offer.

14. (1)  The  public  announcement  referred  to  in regulation 10 or regulation 11 shall be made by the merchant banker not later than four working days of  entering  into  an  agreement  for  acquisition  of shares  or  voting  rights  or  deciding  to  acquire shares  or  voting  rights  exceeding  the  respective percentage specified therein .…

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Submission of letter of offer to the Board.

18. (1)  Within  fourteen days  from the date  of  public announcement made under regulation 10, 11 or 12 as the case may be, the acquirer shall, through its merchant banker, file with the Board, the draft of the  letter  of  offer  containing  disclosures  as specified by the Board.

(2) The letter of offer shall  be despatched to the shareholders  not  earlier  than  21  days  from  its submission to the Board under sub-regulation (1):

Provided that if,  within 21 days from the date of submission of the letter of offer, the Board specifies changes, if any, in the letter of offer (without being Page 35 of 75 under any obligation to do so), the merchant banker and the acquirer shall carry out such  changes  before  the  letter  of  offer  is despatched to the shareholders :

[Provided further that if the disclosures in the draft letter  of  offer  are  inadequate  or  the  Board  has received any complaint or has initiated any enquiry or investigation in respect of the public offer, the Board may call  for  revised letter  of  offer with or without rescheduling the date of opening or closing of  the  offer  and  may  offer  its  comments  to  the revised letter of offer within seven working days of filing of such revised letter of offer.  

(3) The acquirer shall, while filing the draft letter of offer with the Board under sub-regulation (1), pay a fee as mentioned in the following table, by bankers‘ cheque  or  demand  draft  drawn  in  favour  of  the ‘Securities and Exchange Board of India’….

General Objections of the acquirer.

22. (1) The public announcement of an offer to acquire the shares of  the target  company shall  be made only when the acquirer  is  able  to implement  the offer.  

(2) Within 14 days of the public announcement of the offer, the acquirer shall send a copy of the draft letter  of  offer  to  the  target  company  at  its registered office address, for being placed before the  board  of  directors  and  to  all  the  stock

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exchanges where the shares of  the company are listed.  

(3) The acquirer shall ensure that the letter of offer is  sent  to  all  the  shareholders  (including non-resident Indians) of the target company, whose names appear on the register of members of the company as on the specified date mentioned in 1 Inserted  by  the  SEBI  (Substantial  Acquisition  of Shares  and  Takeovers)  (Second  Amendment) Regulations, 2002, w.e.f. 9-9-2002. Page 47 of 75 the  public  announcement,  so  as  to  reach  them within  45  days  from  the  date  of  public announcement.…  

General obligations of the board of directors of the target company.  

23. (1)  Unless  the  approval  of  the  general  body  of shareholders is obtained after the date of the public announcement  of  offer,  the  board  of  directors  of the  target  company  shall  not,  during  the  offer period,—

(a) sell, transfer, encumber or otherwise dispose of or  enter  into  an  agreement  for  sale,  transfer, encumbrance or  for  disposal  of  assets  otherwise, not being sale or disposal of assets in the ordinary course  of  business,  of  the  company  or  its subsidiaries; or

(b) issue 2 [or allot] any authorised but unissued securities  carrying  voting  rights  during  the  offer period; or  

(c) enter into any material contracts.  

Withdrawal of offer.

27.  (1) No public offer, once made, shall be withdrawn except under the following circumstances:—

(a)  [***]  (b)  the  statutory  approval(s)  required  have  been refused;  (c) the sole acquirer,  being a natural  person, has died;  

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(d)  such  circumstances  as  in  the  opinion  of  the Board merit withdrawal.

Board’s right to investigate.  

38. The  Board  may appoint  one  or  more  persons  as investigating officer to undertake investigation for any of the following purposes, namely:—  

(a) to investigate into the complaints received from the  investors,  the  intermediaries  or  any  other person  on  any  matter  having  a  bearing  on  the allegations of substantial acquisition of shares and takeovers ;  

(b) to investigate suo motu upon its own knowledge or  information,  in  the  interest  of  the  securities market or investors‘ interest, for any breach of the regulations;  

(c) to ascertain whether the provisions of the Act and the regulations are being complied with for any breach of the regulations.”

22. In Nirma Industries Limited (Supra), the acquirer

after  making  PA  sought  withdrawal  therefrom  on  the

ground of embezzlement of funds by the target company.

SEBI rejected the application with the observation that the

acquirer ought to have used due diligence prior to making

the public offer.  Rejecting the plea that the embezzlement

and siphoning off of funds by the target company could

not have been found by third party even after exercising

diligence,  this  Court  held  under  the  scheme  of  the

takeover  code  public  offer  once  made  could  not  be

withdrawn  so  as  to  deprive  the  shareholders  of  their

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valuable right to have exit option and also to ensure that

public announcement is not made by way of speculation.

The scheme of takeover code was held to be as follows:  

“  59.  A  conspectus  of  the  aforesaid  Regulations would show that the scheme of the Takeover Code is: (a) to ensure that the target company is aware of the substantial acquisition; (b) to ensure that in the  process  of  the  substantial  acquisition  or takeover,  the  security  market  is  not  distorted  or manipulated;  and  (c)  to  ensure  that  the  small investors are given an option to exit, that is, they are offered a choice to either offload their shares at a  price  as  determined  in  accordance  with  the Takeover Code or to continue as shareholders under the new dispensation. In other words, the Takeover Code is meant to ensure fair and equal treatment of all shareholders in relation to substantial acquisition of shares and takeovers and that the process does not  take  place  in  a  clandestine  manner  without protecting  the  interest  of  the  shareholders.  It  is keeping in view the aforesaid aims and objects of the Takeover Code that we shall have to interpret Regulation 27(1).”

23. As  regards  the  scheme  of  Regulation  27,  it  was

further observed :  

“62.  A  bare  perusal  of  the  aforesaid  Regulations shows that Regulation 27(1) states the general rule in  negative  terms.  It  provides  that  no public  offer, once made, shall be withdrawn. Since clause (a) has been omitted, we are required to interpret only the scope and ambit of clauses (b), (c) and (d). The three sub-clauses are exceptions to the general rule and, therefore,  have  to  be  construed  very  strictly.  The exceptions  cannot  be  construed in  such a  manner that  would destroy  the general  rule  that  no public offer  shall  be permitted to  be  withdrawn after  the public  announcement  has  been  made.  Clause  (b)

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would permit a public offer to be withdrawn in case of  legal  impossibility  when  the  statutory  approval required has been refused. Clause (c) again provides for  impossibility  when  the  sole  acquirer,  being  a natural  person,  has  died.  Clause  (b)  deals  with  a legal  impossibility  whereas  clause (c)  deals  with  a natural disaster. Clearly clauses (b) and (c) are within the  same  genus  of  impossibility.  Clause  (d)  also being an exception to the general rule would have to be naturally  construed in terms of  clauses (b)  and (c). Mr. Divan has placed a great deal of emphasis on the  expression  “such  circumstances”  and  “in  the opinion”  to  indicate  that  the  Board  would  have  a wide discretion to permit withdrawal of an offer even though it is not impossible to perform. We are unable to accept such an interpretation.

67.  Applying  the  aforesaid  tests,  we  have  no hesitation  in  accepting the conclusions reached by SAT  that  clauses  (b)  and  (c)  referred  to circumstances which pertain to a class, category or genus, that the common thread which runs through them is  the impossibility in carrying out the public offer.  Therefore,  the  term “such  circumstances”  in clause  (d)  would  also  be  restricted  to  a  situation which would make it  impossible for the acquirer to perform the public offer. The discretion has been left to  the  Board  by  the  legislature  realising  that  it  is impossible  to  anticipate  all  the  circumstances  that may arise making it impossible to complete a public offer.  Therefore,  certain  amount  of  discretion  has been left with the Board to determine as to whether the  circumstances  fall  within  the  realm  of impossibility as visualised under clauses (b) and (c). In  the  present  case,  we  are  not  satisfied  that circumstances  are  such  which  would  make  it impossible  for  the  acquirer  to  perform  the  public offer. The possibility that the acquirer would end-up making  losses  instead  of  generating  a  huge  profit would  not  bring  the  situation  within  the  realm  of impossibility.

70.  Mr.  Venugopal,  in  our  opinion,  has  rightly submitted that the Takeover Regulations, which is a special  law  to  regulate  “substantial  acquisition  of shares  and  takeovers”  in  a  target  company  lays down a self-contained code for open offer; and also that interest of investors in the present case required that  they should  be  given  an exit  route  when the

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appellants have acquired substantial chunk of shares in the target company. He has correctly emphasized in his submissions that the orderly development of the securities market as a whole requires that public offers  once  made  ought  not  to  be  allowed  to  be withdrawn on the ground of fall in share price of the target  company,  which  is  essentially  a  business misfortune  or  a  financial  decision  of  the  acquirer having  gone  wrong.  SEBI  as  well  as  SAT  have correctly concluded that withdrawal of the open offer in the given set  of  circumstances is  neither  in  the interest  of  investors  nor  development  of  the securities market.

90.  We  are  inclined  to  agree  with  the  submission made by Mr Venugopal that the appellants cannot be permitted to wriggle out of the obligation of a public offer under the Takeover Regulation. Permitting them to do so would deprive the ordinary shareholders of their valuable right to have an exit option under the aforesaid  Regulations.  The  SEBI  Regulations  are designed to ensure that public announcement is not made  by  way  of  speculation  and  to  protect  the interest  of  the  other  shareholders.  Very  solemn obligations are cast on the Merchant Banker under Regulation 24(1) to ensure that—

“24. (1)(a) the acquirer is able to implement the offer; (b)  the  provision  relating  to  escrow  account referred to in Regulation 28 has been made; (c)  firm arrangements  for  funds  and  money  for payment  through  verifiable  means  to  fulfil  the obligations under the offer are in place;  (d) the public announcement of offer is made in terms of the Regulations; (e) his shareholding, if any in the target company is disclosed in the public announcement and the letter of offer.”

91.  Regulation  24(2)  mandates  that  the  Merchant Banker  shall  furnish  to  the  Board  a  due  diligence certificate which shall accompany the draft letter of offer. The aforesaid Regulation clearly indicates that any enquiries and any due diligence that has to be made by the acquirer have to be made prior to the public announcement. It is, therefore, not possible to accept the submission of Mr Shyam Divan that the appellants are to be permitted to withdraw the public

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announcement  based  on  the  discovery  of  certain facts  subsequent  to  the  making  of  the  public announcement.  In  such  circumstances,  in  our opinion, the judgments cited by Mr Shyam Divan are of no relevance. ”

24. As regards the effect of delay on the part of SEBI, it

was observed:  

“94.  A  perusal  of  the  aforesaid  Regulation  clearly shows that the acquirer is required to file the draft letter of offer containing disclosures as specified by the Board within a period of 14 days from the date of public announcement. Thereafter, letter of offer has to be dispatched to the shareholders not earlier than 21 days from its submission to the Board. Within 21 days, the Board is required to specify changes if any, that  ought  to  be  made  in  the  letter  of  offer.  The merchant banker and the acquirer have then to carry out  such  changes  before  the  letter  of  offer  is dispatched  to  the  shareholders.  But  there  is  no obligation  to  do  so.  Under  the  second proviso,  the Board may call  for revised letter of  offer in case it finds that the disclosures in the draft letter of offer are  inadequate  or  the  Board  has  received  any complaint or has initiated any enquiry or investigation in respect of the public offer. It is important to notice that in the first proviso the Board does not have any obligation to specify any change in the draft letter of offer within a period of 21 days. In the present case, in  fact,  the  Board  had  not  specified  any  changes within 21 days. We have already noticed earlier that the letter of offer was lacking and deficient in detail. The  appellants  themselves  were  taking  time  to submit details called for, by their merchant bankers through  various  letters  between  8-8-2005  to 20-3-2006.  We  have  already  noticed  the  repeated advice given by the Merchant Banker to enhance the issue size of the open offer and to comply with other requirements  of  the  Takeover  Regulations.  The appellants,  in  fact,  were  prevaricating  and  did  not agree  with  the  interpretation  placed  on  Regulation 27(1)(d)  by  the  Merchant  Banker.  We,  therefore, reject the submission of Mr Shyam Divan that there

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was delay on the part of SEBI in approving the draft letter of offer. ”  

25. In  M/s. Akshya Infrastructure Pvt. Ltd.  (supra),

this Court held that SEBI is not justified in causing delay in

dealing with the issuance of its comments on a letter of

offer as delay can lead to controversy as to whether the

belated action was bona fide exercise of statutory power.

However, delay by itself may not vitiate action of the SEBI.

The SEBI has to be guided by the overall interest of the

shareholders  in  dealing  with  the  prayer  for  withdrawal

from  the  public  offer.   The  economic  unviability  is  no

ground to justify prayer for such withdrawal.  The relevant

observations are:  

“30.  With  regard  to  delay,  we  do  not  find  much substance in  the submission  of  Mr C.U.  Singh.  Mr Singh has sought to explain the delay on the ground that  information sought  by  the  appellant  was  not given by the respondent. In our opinion, this was no ground for  the appellant  to  delay the issuance of comments on the letter of offer, especially not for a period of 13 months. In the event the information was not forthcoming, the appellant had the power to refuse the approval of the public offer. It is true that under  Regulation  18(2),  SEBI  was  required  to dispatch the necessary letters to the shareholders within a reasonable period. It is a matter of record that the comments were not offered for 13 months. Such kind of delay is wholly inexcusable and needs to be avoided. It can lead to avoidable controversy with regard to whether such belated action is bona fide  exercise  of  statutory  power  by  SEBI.  By adopting such a lackadaisical, if not callous attitude, the very object for which the Regulations have been

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framed  is  diluted,  if  not  frustrated.  It  must  be remembered  that  SEBI  is  the  watchdog  of  the securities market. It is the guardian of the interest of  the  shareholders.  It  is  the  protective  shield against  unscrupulous  practices  in  the  securities market. Therefore, SEBI like any other body, which is established as a watchdog, ought not to act in a lackadaisical  manner  in  the  performance  of  its duties. The time-frame stipulated by the Act and the Takeover  Regulations  for  performing  certain functions is required to be maintained to establish the transparency in the functioning of SEBI.

31. Having said this, we are afraid such delay is of no assistance to the respondent. It will not result in nullifying  the  action  taken  by  SEBI,  even  though belated. Ultimately, SEBI is charged with the duty of ensuring that every public offer made is bona fide for  the  benefit  of  the  shareholders  as  well  as acquirers. In the present case, SEBI has found that permitting  the  respondent  to  withdraw the  public offer would be detrimental to the overall interest of the shareholders.  The only  reason put  forward by the respondent for withdrawal of the offer is that it is no longer economically viable to continue with the offer.  Mr  Nariman  has  referred  to  a  tabular statement  and  data  to  show  that  there  is  no substantial variation in the share prices that ensued making of the public offer. Having seen the Table, we find substance in the submission of Mr Nariman that there is hardly any variation in the shares of the  target  company  from  20-10-2011  till 30-11-2011.  The  variation  seems  to  have  been between Rs 78.10 (on 24-11-2011) and Rs 87.60 (on 20-10-2011). Such a variation cannot be said to be the result of the public offer. But this will not detract from  the  well-known  phenomena  that  public announcement  of  the  public  offering  affects  the securities  market  and  the  shares  of  the  target company. The impact is immediate.

35. We are also not impressed by the submission of Mr  Nariman  that  it  has  now  become  economically impossible to give effect to the public offer. This very submission has been rejected in Nirma Industries Ltd. We reiterate our opinion in Nirma Industries Ltd. that under Regulations 27(1)(b), (c) and (d), a public offer, once made, can only be permitted to be withdrawn in circumstances which make it  virtually impossible to

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perform the public offer. In fact, the very purpose for deleting  Regulation  27(1)(a)  was  to  remove  any misapprehension  that  an  offer  once  made  can  be withdrawn if it becomes economically not viable. We are  of  the  considered  opinion  that  the  distinction sought  to  be  made  by  Mr  Nariman  between  a voluntary public offer and a  triggered public offer is wholly  misconceived.  Accepting  such  a  submission would defeat the very purpose for which the Takeover Code has been enacted.”

OUR FINDINGS

Re. Question (i)

26. Applying the decisions of this Court to the facts of

the present case,  we are in agreement with the finding

recorded by the SAT that there was undue delay on the

part of the SEBI in dealing with the DLO.  No doubt, in a

given case timeline prescribed under the Regulations may

not be adhered to when the SEBI justifiably takes time in

dealing with the complaints, as rightly submitted by Shri

Datar, in the present case, the stand of the SEBI itself is

that it could not go into the complaints for which the right

forum was CLB.  As regards the time taken in dealing with

the complaints against the acquirers, the SEBI could have

promptly  proceeded  with  the  matter.   However,  mere

upholding of finding of SAT on the aspect of delay by SEBI

is not enough to hold that the appellants are entitled to

withdrawal of the public offer.  The withdrawal has to be

dealt with under Regulation 27, as held by this Court.   The

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general principle is that public offer once made cannot be

withdrawn.  Exception to the rule is the specified situations

under the Regulation as laid down by this Court in above

decisions  particularly  in  Nirma  Industries  Limited

(Supra)4.    In  the  present  case,  though  SEBI  was  not

justified in causing delay in giving its comments on public

offer, this by itself is not enough to justify withdrawal from

public  offer  so  long  as  the  case  does  not  fall  under

Regulation 27.  First question is answered accordingly.   

Re. Question (ii)

27. As already observed above, under the scheme of the

regulations public offer has to be made after due diligence

(Regulation 22). Obligation of the board of directors under

Regulation  23  against  alienation  of  assets,  issuance  of

unissued securities carrying voting rights or entering into

material contracts is applicable only if approval of general

body of shareholders is not obtained.  We are not dealing

with validity of imposition of fine on the target company

for its decision in dealing with Vile Parle property, without

approval of the general body as this issue is not before us.

The fact remains that ex post facto approval of the general

body  has  since  been  obtained.   Moreover,  SEBI  had

4   (2013) 8 SCC 20 para 67

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observed that this aspect of the matter will be separately

enquired  into.    It  is  clear  that  under  the  scheme  of

Regulation  23,  there  is  no  bar  to  a  decision  with  the

approval of the general body of shareholders, if otherwise

valid.   The  question  whether  unilateral  decisions  of  the

target  company  have  rendered  the  carrying  out  of  the

public offer possible, is a question to be decided on facts

of each case.  In the present case, the SEBI as well as the

SAT have concurrently held that public offer is capable of

being carried out and has not become impossible.   The

assets are available with the target company.  Finding has

also been recorded about the circumstances preceding the

public offer and the conduct of the acquirer which is based

on record.  The steps for development of  the Vile  Parle

property had already been initiated and the acquirer had

taken remedies before the CLB against the decision of the

target company and had settled the matter with the target

company.  It is clear from the scheme of the regulations

that there is no absolute bar for the target company to

take decision about its assets, subject to compliance with

statutory  procedure  and  subject  to  the  decision  being

otherwise valid.  There is no doubt that against any mala

fide, illegal or unjustified decision of the target company,

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remedies  at  appropriate  fora are  available  to  the

aggrieved  parties.   Thus,  there  is  no  justification  for

automatic  withdrawal  from  public  offer  without  clear

prejudice to  the acquirer  to the extent  of  rendering the

carrying out of public offer impossible.  In the facts of the

present case, we do not find any ground to interfere with

the concurrent finding of the SEBI and the SAT that request

for withdrawal from public offer was not justified.  Question

(ii) is answered accordingly.    

28. In view of the above, we do not find any merit in this

appeal and the same is accordingly dismissed.  There shall

be no order  as to costs.

………………………………………………..J.                        [ ANIL R. DAVE ]

………………………………………………..J.        [ ADARSH KUMAR GOEL ]

NEW DELHI NOVEMBER 07, 2016

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