HC allows Daiichi to withdraw Rs 20.5 Cr deposited with court

The Delhi High Court Monday permitted Japanese pharma major Daiichi Sankyo to withdraw over Rs 20.5 crore which was transmitted to the high court registrar general following an apex court decision in a contempt case initiated by it against former promoters of Fortis Healthcare Malvinder Mohan Singh and Shivinder Mohan Singh.

The high court directed the registrar general to take expeditious steps for release of the amount after due verification.

“Daiichi, the execution petitioner, shall consequently be entitled to withdraw the entire amount presently held in deposit with this court and received in terms of the order of the Supreme Court dated September 22, 2022 along with any interest that may have accrued thereon,” Justice Yashwant Varma said.

The court’s order came on an application by Daiichi seeking permission to withdraw the amount transmitted to the registrar general of the high court pursuant to the apex court’s September 2022 order by which former promoters of Fortis Healthcare Ltd Malvinder Singh and Shivinder Singh were handed down six months jail term in a contempt case.

The top court had said that Singh brothers had “failed to purge themselves of contempt” by not making a genuine attempt to pay Rs 1170.95 crore each towards honouring an arbitral award against them.

The contempt proceedings arose out of an action initiated by Japanese firm Daiichi Sankyo Company Limited seeking enforcement of a foreign arbitral award made in Singapore on April 29, 2016 to the tune of Rs 3,600 crore in its favour and against 20 respondents including Malvinder Mohan Singh, Director of Oscar Investments Limited and RHC Holding Private Limited and Shivinder Mohan Singh, Director of Oscar Investments Limited.

The former promoters of Fortis Healthcare Ltd were facing a court battle after Daiichi had challenged the Fortis-IHH share deal to recover the Rs 3,600 crore arbitration award.

Earlier, after being held guilty of contempt of court by the apex court, right officials of Indiabulls group of firms had deposited Rs 17.93 crore with the registry of the top court for purging them of contempt.

The apex court had then ordered transfer of Rs 17.93 crore from its registry to the executing court (Delhi High Court) along with the interest accrued.

While holding the eight officials guilty of its contempt in 2019, the top court had afforded them an opportunity to deposit the value of 12,25,000 shares as on August 31, 2017 in the Bombay Stock Exchange, saying in case they purge themselves of the contempt, it would take a lenient view while imposing the sentence. The case against them was closed after payment.

The release of amount was objected to by Indiabulls Housing Finance Ltd (IHFL) which said 12,25,000 shares of FHHPL in Fortis Healthcare Ltd (FHL) were transferred to IHFL.

The high court, in its Monday’s order, noted the Supreme Court has categorically found that the sale of those shares by IHFL was in clear violation of the sequestration orders which had been passed.

It said a wholly preposterous submission was addressed on behalf of IHFL that since it had purged itself of the contempt it must be viewed as being “cleansed” of all wrongdoing.

“The court fails to comprehend how IHFL could have felt emboldened to seek a reopening of issues which stood lent a quietus by the orders of the Supreme Court. IHFL clearly appears to have sought to reassert a right which stood quashed by the Supreme Court.

“The court also notes that the objections raised by IHFL not only proceeded along lines identical to those which were urged before the Supreme Court, it was also based on the same evidence and material. The court is thus of the firm view that its objections are in clear abuse of the process of court,” Justice Varma said and imposed a cost of Rs 10 lakh on IHFL.

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