A three-Judge Bench comprising of Justices UU Lalit
, Indira Banerjee
and KM Joseph
on Thursday, (February 18, 2021) directed the banks and financial institutions to place on record various documents related to loans advanced or financial accommodations extended in respect of alienation of Fortis Healthcare's shares through its deal with IHH healthcare, along with the nature of both encumbered and unencumbered securities offered with such loan arrangements.
The aforementioned matter by the arbitral tribunal ordered the “Singh Brothers”, Malvinder Singh and Shivinder Singh to pay a sum of rs. 3500 crore to Daiichi. It was held that the Singh Brothers had concealed the investigations by the United States Food and Drug Administration (“FDA”) and Department of Justice (“DOJ”) against Ranbaxy in the United States of America at the time of the deal, the news of which came to Daiichi only in the year 2009. Since contractual damages on a tortious basis aim to restore the parties to their pre-contractual position, the tribunal held that the claimant is entitled to recover damages on account of fraudulent misrepresentation and concealment of material facts while selling their shareholding in Ranbaxy to Daiichi in 2008.
The court, while initiating suo moto
contempt proceedings against Fortis Healthcare also contended that concerned individuals and corporate entities could not sell the shares held by FHHPL directly and, therefore, a device was mechanised along with a structure wherein the shares were proceeded against by the lenders.
It was concluded that the intervention of the banks in the matters pending before the Court, were not removed from the fact that they were aware of the consequences granted in favour of M/s. Daiichi Sankyo Company Limited; furthering that the role of banks and financial institutions would, therefore, require closer scrutiny in the upcoming months. [READ JUDGMENT]