PR COMMISSIONER OF vs. M/S SYENGENE

- 1 - IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 17TH DAY OF MARCH 2021 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR COMPANY APPLICATION No. 185 OF 2016 IN COMPANY PETITION No.182/2014 BETWEEN: INDIA AWAKE FOR TRANSPARENCY A NOT FOR PROFIT COMPANY INCORPORATED UNDER SECTION 25 OF THE COMPANIES ACT 1956 HAVING ITS REGISTERED OFFICE D - 1, SRISHTI CRESENDO , NO 24, DESIKA ROAD, CHENNAI - 600004 TAMILNADU. REPRESENTED BY ITS AUTHORISED SIGNATORY MR R SUBRAMANIAN

…APPLICANT (BY SRI. R.SUBRAMANIAN, ADVOCATE) AND: 1 . HASHAM INVESTMENT AND TRADING

COMPANY PRIVATE LIMITED

REGISTERED OFFICE AT NO 134,

DODDAKANNELLI NEXT TO WIPRO CORPORATE OFFICE,

SARJAPUR ROAD, BANGALORE - 560035.

KARNATAKA REPRESENTED BY ITS DIRECTOR 2 . UNION OF INDIA

REPRESENTED HEREIN BY THE REGIONAL DIRECTOR

DEPARTMENT OF COMPANY AFFAIRS

3RD FLOOR, CORPORATE BHAWAN,

BANDLAGUDA, NAGOLE,

TATTIANNARAM VILLAGE,

HAYAT NAGAR MANDAL RANGA REDDY DISTRICT

HYDERABAD -500068, TELANGANA.

- 2 - 3 . OFFICIAL LIQUIDATOR

(ATTACHED TO HIGH COURT OF KARNATAK A)

26/27, 12TH FLOOR, RAHEJA TOWERS

M.G.ROAD, BENGALURU - 560 001. 4 . MR AZIM PREMJI

S/O LATE MUHAMMED HASHIM PREMJI

AGED ABOUT 70 YEARS

RESIDING AT SURVEY NO 75,133,135/1, 136/1,

DODDAKANNALLI VILLAGE,

SARJAPUR ROAD,

BENGALURU - 560035. 5 . RESERVE BANK OF INDIA

CENTRAL OFFICE

FORT ,MUMBAI - 400001.

REPRESENTED BY ITS GOVERNOR 6 . REGISTRAR OF COMAPNIES

E WING 2ND FLOOR,

KENDRIYA SADANA KORAMANGALA

BENGALURU - 560034. 7 . M/S RAMRAJ & CO

CHARTERED ACCOUNTANTS

# 65 4TH FLOOR, 29TH A CROSS,

GEETHA COLONY 4TH BLOCK

JAYANAGAR , BENGALURU - 560011 8 . MR P V SRINIVASAN

DIRECTOR HASHAM INVESTMENTS

AND TRADING COMPANY PRIVATE LIMITED

S/O P VASUDEVAN

AGED ABOUT 56 YEARS

DIRECTOR,HASHAM INVESTMENT AND TRADING

COMPANY PRIVATE LIMITED, RESIDING AT NO 524,

16TH CROSS, INDIRANAGAR 2ND STAGE

BENGALURU - 560038 9 . MRS YASMEEN AZIM PREMJI

DIRECTOR HASHAM INVESTMENTS AND TRADING

COMPANY PRIVATE LIMITED

W/O MR AZIM PREMJI, AGED 68 YEARS

RESIDING AT SURVEY NO 75,133,135/1, 136/1,

DODDAKANNALLI VILLAGE,

- 3 -

SARJAPUR ROAD,

BENGALURU - 560 035.

…RESPONDENTS (BY SRI. S. GANESH, SR. COUNSEL AND SRI. M. DHYAN CHINNAPPA, SR.COUNSEL FOR SRI. SAJI.P. JOHN, ADVOCATE FOR M/S. SPJ LEGAL, FOR R-1, R-4, R-8, & R-9 SMT. R.V.S.NAIK, SR.COUNSEL FOR MISS. RASHMI SUBRAMANYA,, ADVOCATE FOR R-5) THIS C.A.IS FILED UNDER SECTIONS 391 TO 394 OF THE COMPANIES ACT, 1956, PRAYING TO THAT THE SCHEME OF AMALGAMATION, ANNEXURE-A HERETO, SANCTIONED BY THIS HON'BLE COURT SO AS TO BE BINDING ON THE TRANSFER COMPANIES AND ITS SHAREHOLDERS AND CREDITORS, AND ALSO ON THE PETITIONER COMPANY AND ITS SHAREHODLERS AND CREDITORS AND ETC.

THIS C.A. IS BEING HEARD AND RESERVED ON 16.12.2020, COMING ON FOR PRONOUNCEMENT OF ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER In this application filed under Rules 6 and 9 of the Company (Court) Rules, 1959 (for short 'the Rules'), the applicant seeks recalling of the impugned order dated 26.03.2015 passed by this Court allowing the aforesaid petitions in Co.P.No.182/2015 & connected matters, thereby sanctioning the scheme of Amalgamation sought for in the petitions.

- 4 -

- 5 - application; in the absence of any provision under the Act or the Rules which empower a review / recall the application is not maintainable and is liable to be dismissed; so also, having regard to the unconditional withdrawal of W.P.No.3635/2020 filed by the applicant putting forth the very same contentions as well as rejection of the claim of the applicant by both the RBI and Central Government vide orders dated 29.05.2017 and 16.10.2017, the present application seeking to urge the very contentions is liable to be rejected.

- 6 - Central Government vide Orders dated 05.09.2017 and 10.11.2017 respectively coupled with the fact that the writ petition in W.P.No.3635/2020 (PIL) filed by the applicant putting forth the very same contentions having been unconditionally withdrawn by him on 01.10.2020 in addition to three other writ petitions in W.P.13838/2020 dated 08.01.2021, W.P.No.11482/2020 dated 18.01.2021 and W.P.No.172/2021 dated 12.02.2021, all filed by the applicant having been dismissed by this Court, the present application is not maintainable. In support of their contentions, learned Senior counsel for the respondents have placed reliance on the following decisions:

(i) Income -Tax Officer, Ernakulam vs The Mambad Timber And Estates Kerala - 1972 SCC Online Ker 91;

(ii) Miheer.H. Mafatlal vs. Mafatlal Industries Ltd. - (1997) 1 SCC 579;

(iii) L.Mullick and Co. and others vs. Binani Properties P.Ltd., and Ors- 1980 SCC online Cal 231;

- 7 -

(iv) The Commissioner of Income Tax vs. M/s. Sadashiva Sugars Limited - Company Application No.1789/2014 D.D. 23.12.2017 - Karnataka High Court;

(v) Ramjas Foundation and another vs. UOI and Ors - (2010)14 SCC 38;

(vi) Dr.B.Singh vs. Union of India and Ors. - (2004) 3 SCC 363;

(vii) Jasbhai Motibhaj Desai vs. Roshan Kumar Haji Bashir Ahmed and Ors - (1976(1) SCC 671;

(viii) Sabra Bano vs M.P. Electricity Board Jabalapur and Ors - 1997(1) M.P. L.J. 448;

(ix) Grindlays Bank Ltd., vs Central Government Industrial Tribunal and Others - 1980 (Supp) SCC 420;

(x) Harbhajan Singh vs. Karam Singh and Others - AIR 1966 SC 641;

(xi) Peerless General Finance Investment Company Limited and Another vs. RBI - (1992) 2 SCC 343;

(xii) Tamilnadu Generation and Distribution Corporation Limited and Another vs. CSEPDI-TRISHE Consortium and Another - 2017 4 SCC 318;

(xiii) Kapra Mazdoor Ekta Union vs. Management of M/s. Birla Cotton Spinning and Weaving Mills Limited.- (2005) 13 SCC 177;

(xiv) SREI Infrastructure Finance Limited vs. TUFF Drilling Private Limited - (2018) 11 SCC 470;

- 8 -

(xv) Unique Delta Force Security Private Ltd., vs. Sumeet Facilities Pvt. Ltd., Building - 2012 SCC Online Bom 1191;

(xvi) Castron Technologies Limited vs. Castron Mining Limited - 2013 SCC Online Cal 12914;

(xvii) S.K.Gupta and Another vs. K.P.Jain and Another - (1979) 3 SCC 54;

(xviii) Meghal Homes (P) Ltd., vs. Shree Niwas Girni K.K. Samiti & Others - (2007) 7 SCC 753;

(xix) Reliance Natural Resources Limited vs. Reliance Industries Ltd., - (2010) 7 SCC 1. 6. Per contra, learned counsel for the applicant made the following submissions:- a) The legality and validity of the impugned order having been assailed by the applicant on the ground of fraud, the question of locus standi of the applicant is not relevant and the contention of the respondents in this regard is liable to be rejected. b) The suo moto powers of this Court under Rules 6 and 9 of the Rules r/w Section 151 CPC empower this Court to recall its own order on the ground of fraud and as such,

- 9 - the question of locus standi of the applicant does not arise; c) By way of answer to the contention of the respondents regarding there being no provision under the Act to seek review of the impugned order and the application seeking review on merits is not permissible, learned counsel for the applicant has filed a memo dated 22.12.2020 specifically stating that the application has not been filed under Sections 391 to 394 of the Act and the application is in the nature of procedural review; it is therefore contended that the said contention of the respondents is liable to be rejected.

In support of his contentions, learned counsel for the applicant placed reliance upon the following decisions: (i) Indian Bank vs. Satyam Fibres - (1996) 5 SCC 550;

(ii) A.V.Papayya Sastry vs. Govt. of A.P. - (2007) 4 SCC 221;

(iii) Hazma Haji vs. State of Kerala & Another - (2006)7 SCC 416;

(iv) SK Gupta vs. KP Jain - (1979) 3 SCC 54;

- 10 -

(v) Horace Kevin Gonsalves vs. Prabha Ganpat Borkar - 2015(6) Mh.L.J. 208;

(vi) Peter John D Souza vs. Armstrong Joseph D' Souza- 2014(3) Mh.L.J. 876;

(vii) G H Yusuf Sait vs. S.Ramamurthy - AIR 1963 Mad 367;

(viii) Kumaran Vaidhyar & Others vs. K S Venkatishwaran & Others - 1991 SCC Online Ker 99;

(ix) Punjab Breweries vs. GT Agencies - 2008 SCC Online P & H 794;

(x) M M Thomas vs. State of Kerala - 2000(1) SC 666;

(xi) Century Flour Mills Limited vs. S.Suppaiah & Others;

(xii) Laxmi Dhar Raul vs. Debraj Mohanty & Others - 2003 SCC Online Ori 136;

(xiii) All Bengal Excise Licenses Association vs. Raghabendra Singh & Others - 2007 (11) SCC 374;

(xiv) Grindlays Bank Limited vs. Central Govt. Industrial Tribunal & Others - 1980 (Supp) SCC 420;

(xv) State of Gujarat vs. Sardarbegum and others - 1976(3) SCC 416;

(xvi) Board of Revenue, U P Lucknow vs. Vinay Chandra Misra - (1981) 1 SCC 436;

(xvii) Vallabh Das vs. Dr.Madan Lal & Others - 1970(1) SCC 761;

- 11 -

(xviii) Ms.Ramnarain P. Ltd. & Others vs. State Trading Corporation of India Limited - 1983(3) SCC 75;

(xix) V Rajendran & Others vs. Annasamy Pandian - 2017(5) SCC 63;

(xx) Ramesh Chandra Sankala and others vs. Vikram Cement and others- 2008(14) SCC 58;

(xxi) Sarva Shramik Sanghatana vs. State of Maharastra and others - 2008(1) SCC 494;

(xxii) Himachal Pradesh Financial Corporation vs. Anil Garh and others - 2017(14) SCC 634;

(xxiii) Fida Hussain and others vs. Moradabad Development Authority and others - 2011(12) SCC 615;

(xxiv) Khanapuram Gandhaiah vs. Administrative Officer & Others - 2010(2) SCC 2;

(xxv) Hindustan Lever Employees' Union vs. Hindustan Lever Limited and others - 1995(1) SCC 499;

(xxvi) Vimala Kumari Kulsreshtha vs. Shambhajirao and another - 2008(5) SCC 58;

(xxvii) Chairman cum MD COAL India Ltd., and Another vs. Anatha Saha and others - 2011(5) SCC 142;

(xxviii) Arun Kumar and others vs. Union of India and others - 2007(1) SCC 732;

(xxix) Kiran Singh and others vs. Chaman Paswan and others - AIR 1954 SC 340;

(xxx) Balwant N Viswamitra and others vs. Yadhav Sadashiv Mule & Others - 2004(8) SCC 706;

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(a) Since the applicant was undisputedly not a party to the main petitions nor the impugned order dated 26.03.2015, applicant did not have any locus standi to file the application; the applicant was not an ‘aggrieved person’, since it was neither a shareholder nor a director or any other person which is connected to or has any nexus with the parties to the proceedings or the impugned order and the applicant did not have locus standi to maintain the instant application;

(b) The applicant was neither necessary nor proper party to the proceedings and since there was no warrant to hear the applicant before passing the impugned order, the question of even hearing the applicant or the applicant being entitled to seek recall of the impugned order does not arise

- 13 - and the application is liable to be dismissed for want/lack of locus standi on the part of the applicant;

(c) The instant application is in the nature of a review petition which is not maintainable for want/lack of locus standi on the part of the applicant, particularly when the applicant is not a person who can be said to be aggrieved by the impugned order which would entitle him to seek review of the same;

(d) Except stating at paragraph 20 of the instant application that the same was in public interest, there is absolutely no other averment in the entire application with regard to the locus standi of the applicant to maintain the application; it follows there from that the application is in the nature of a public interest petition which is neither contemplated nor permissible under Rules 6 and 9 of the Rules, which have been invoked by the applicant; in other words, the present application purportedly filed in public interest to recall the impugned order does not attract Rules 6

- 14 - and 9 (supra) and consequently, the application is not maintainable on this ground also;

(e) Undisputedly, the applicant is not a party to the present company petition or the impugned order. While dealing with the locus standi of a non - party to a proceeding to seek review, the Apex Court in the case of Union of India vs. NareshKumar Badrikumar Jagad & Ors. - (2019) 18 SCC 586, held as under:- "18. Reverting to the question of whether the Union of India has locus to file the review petition, we must immediately advert to Section 114 of the Code of Civil Procedure (CPC) which, inter alia, postulates that “any person considering himself aggrieved” would have locus to file a review petition. Order 47 CPC restates the position that any person considering himself aggrieved can file a review petition. Be that as it may, the Supreme Court exercises review jurisdiction by virtue of Article 137 of the Constitution which predicates that the Supreme Court shall have the power to review any judgment pronounced or order made by it. Besides, the Supreme Court has framed Rules to govern review petitions. Notably, neither Order 47 CPC nor Order 47 of the Supreme Court Rules limits the remedy of review only to the parties to the judgment under review. Therefore, we

- 15 - have no hesitation in enunciating that even a third party to the proceedings, if he considers himself an aggrieved person, may take recourse to the remedy of review petition. The quintessence is that the person should be aggrieved by the judgment and order passed by this Court in some respect. As held by the Apex Court in the above decision, the applicant being aggrieved by the impugned order in some way or the other, is a sine qua non for filing the present application; under these circumstances, without the applicant being an aggrieved person, it cannot be said that it has a locus standi to file and maintain the present application.

(f) In its Memo dated 22.12.2020, applicant has specifically stated that it has not/does not intend to invoke Sections 391 to 394 of the Act for the purpose of the present application; in view of this specific stand of the applicant that Sections 391 to 394 of the Act do not apply to the instant application, since there is no other provision under the Act relating to modification of a scheme of amalgamation, the application is liable to be dismissed on this ground also; the

- 16 - application seeking recalling of the impugned Order passed under Sections 392 of the Act is also not maintainable under Sections 391 to 394 of the Act;

(g) Even to invoke the inherent powers of this Court (Company Court) either under Section 151 CPC (by virtue of Rule 6) or under Rule 9 of the Company (Court) Rules, 1959, it is absolutely essential that the applicant is an ‘aggrieved person’ and has locus standi to maintain the application; applicant who is not an aggrieved person does not have locus standi to invoke the inherent powers of this Court and seek recalling of the impugned order;

(h) Merely because the applicant has made allegations of fraud and collusion, it cannot be said that applicant has locus standi to invoke inherent powers of this Court to recall the impugned order; In other words, even to seek recall of the impugned order by invoking inherent powers of this Court by alleging fraud, it is absolutely imperative and incumbent that the applicant is an aggrieved person having locus standi to file

- 17 - the application and in the absence thereof, the present application is not maintainable.

(i) In its Memo dated 22.12.2020, applicant has also stated that the relief of recalling the impugned order is in the nature of a ‘procedural review’ and not a ‘review on merits’; by stating so, applicant has not only admitted that there does not exist any statutory provision enabling the applicant to seek review on merits, applicant has also admitted that it only seeks to invoke inherent powers of this Court by way of a procedural review; consequently, in the absence of locus standi, since the applicant is not an aggrieved person, the application seeking recalling of the impugned order by way of a procedural review is not maintainable and is liable to be dismissed;

(j) In order to maintain the instant application by way of procedural review, it is absolutely essential that the applicant should have been a party to the proceedings and the impugned order and that the same ought to have caused prejudice to the applicant and/or affected its rights; at any rate, applicant should at least be an ‘aggrieved person’ who should

- 18 - necessarily have been affected by the impugned order in some way or the other and in the absence of the same, the application was liable to be dismissed;

(k) The contention of the applicant that when fraud and collusion are alleged, question of locus standi does not arise / is not relevant is baseless and devoid of merit and the said contention is to be noted only to be rejected; in the light of specific averment in paragraph 20 of the application that it has been filed in public interest, existence of locus standi becomes extremely relevant and material and without the applicant being a ‘person aggrieved’, any amount of allegations of fraud and collusion are of no consequence and will not make the application maintainable;

(l) The claim of the applicant in the present application with regard to the impugned order sanctioning the scheme of amalgamation has already been urged by the applicant before the Delhi High Court in W.P.No.4905/2017 and connected matters filed by the applicant against the respondents and the same having been rejected by both the RBI and Central

- 19 - Government vide Orders dated 05.09.2017 and 10.11.2017 which have attained finality and become conclusive and binding upon the applicant and consequently, the instant application is not maintainable on this ground also;

(m) The conduct of the applicant in repeatedly filing applications, petitions, complaints, appeals etc., before various forums including this Court including a public interest petition in W.P.3635/2020(PIL) which was also withdrawn unconditionally by the applicant on 01.10.2020 as well as the orders passed by this Court in W.P.13838/2020 dated 08.01.2021, W.P.No.11482/2020 dated 18.01.2021 and W.P.No.172/2021 dated 12.02.2021, all filed by the applicant which were dismissed with costs is sufficient to establish that the applicant is not entitled to any relief in the present application also; in fact, in the aforesaid W.P.No.172/2021 dated 12.02.2021, while dismissing the petition after noticing the conduct of the applicant, and imposing exemplary costs of Rs.10 lakhs on the applicant, this Court held as under:- "15. It is also relevant to note that the orders dismissing the three writ petitions filed by the petitioner

- 20 - after withdrawal of the PIL, were available well before hearing began in this case. This Court specifically brought this aspect to petitioner's notice. However, petitioner sought to argue the writ petition as if it was a stand alone writ petition and sought to make repeated and elaborate arguments.

- 21 - transferor companies owned by the other two transferor companies. M/s. Vidya Investment and Trading Company Private Limited is owned by M/s. Napean Trading and Investment Company Private Limited and M/s Regal Investment and Trading Company Private Limited jointly, while M/s. Napean Trading and Investment Company Private Limited is owned by M/s. Vidya Investment and Trading Company Private Limited and M/s Regal Investment and Trading Company Private Limited. Similarly, M/s Regal Investment and Trading Company Private Limited is owned by M/s. Vidya Investment and Trading Company Private Limited and M/s. Napean Investment and Trading Company Private Limited each of these companies are registered under Companies Act and therefore, are legal persons capable of owning property and enjoy the privileges of a corporate person. Hence, it is not correct to say that the transferor companies are ownerless and that the assets of the said companies belong to Union of India.

- 22 - b) Yasmeen Premzi:- 5010 equity shares The scheme provided for merger of the three transferor companies to M/s. Hasham Investment and Trading Company Private Limited which was fully owned by Mr.Azim Premzi and Yasmeen Premzi. This fact was reported by the ROC, Bangalore in his report to the Regional Director on 27.08.2014. Thus, no private trust was holding any shares of M/s.Hasham Investment and Trading Company Private Limited at that point of time.

None of the companies involved in the scheme are also not falling any complaints nor any Regulatory actions.

- 23 - also dealt with/pointed out the qualifications of Auditors on the balance sheets of transferor companies which were relating to certain non-compliance of RBI Regulations applicable for NBFCs thus, the Regional Director has carried on due diligence before filing his report on the merger before the Hon'ble High Court in response to the notice u/s 394A of the Companies Act, 1956.

- 24 - clause (e), petitioner has sought for a direction against the Ministry of Corporate Affairs to authorize petitioner under Section 439(2) of the Companies Act, 2013 to prosecute respondents No. 2 to 5.

- 25 - Wipro Ltd.; and neither Mr. Azim Premji or his family members had any equity in these Companies.

- 26 - three Companies had given large sums of monies to a Private Trust.

- 27 - law. Though petitioner was forewarned, he chose to argue this writ petition as a stand-alone petition wasting the valuable time of this Court to deal with such frivolous cases. Therefore, imposition of punitive cost is necessary.

Registry shall report compliance after expiry of four weeks.

(n) A perusal of the aforesaid orders passed by this Court clearly indicates that the applicant is guilty of abuse of process of law and his conduct disentitles him from any relief in the present petition also. In fact, as noticed by this Court in the earlier orders, the claim of the applicant has been rejected not only by the Ministry of Corporate Affairs but also by the

- 28 - Reserve Bank of India. Under these circumstances also, I am of the considered opinion that the present application is not maintainable and the same is liable to be dismissed.