Delhi High Court allows Daiichi Sankyo to withdraw ₹20.5 crore from Registry deposited by IHFL in contempt case

The Delhi High Court on Monday allowed Japanese pharmaceutical company Daiichi Sankyo to withdraw ₹20.5 crore which was deposited with the High Court Registrar General on the directions of the Supreme Court in September 2022..Daiichi had initiated contempt of court proceedings against former promoters of Fortis Healthcare Malvinder Mohan Singh, Shivinder Mohan Singh and several others. The money was deposited with the apex court by some of the respondents to purge themselves of contempt. The Supreme Court then ordered the deposit to be transferred to the Delhi High Court.Justice Yashwant Varma ordered the High Court Registrar General to take expeditious steps for the release of the amount.“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 22 September 2022 along with any interest that may have accrued thereon. The Registrar General to proceed in terms of the aforesaid direction and take expeditious steps for its release subject to due verification,” the High Court said..Daiichi Sankyo has been involved in protracted legal battle against the Singh brothers and others over enforcement of an arbitral award passed in its favour by Singapore tribunal in April 2016. The Singh brothers and 18 other respondents were jointly and severally liable to pay more than ₹4,000 crore to Daiichi.However, the respondents failed to pay the award amount. It was alleged that it was not just a case of creating encumbrance or pledge, but there were instances of sale of shares with the purpose of reducing the extent of the respondents' control over Fortis Healthcare Holding Private Limited [FHHPL]..The Supreme Court had convicted Singh brothers and others for contempt as they failed to make a genuine effort to pay the arbitral award against them.It had also found some officials of Indiabulls guilty of contempt. They deposited ₹17.93 crore to purge themselves of contempt. This amount was later transferred to the High Court..After considering the case, Justice Varma said that the deposit held by the High Court has an indubitable connection to the five assurances and the injunctions granted by the Supreme Court. Further, they constitute an unfractured thread forming part of Daiichi’s efforts to enforce the Foreign Award.“It must also be noted that the shares in question came to be sequestered in terms of directions and injunctions issued by this Court as well as the Supreme Court in relation to the Foreign Award only. The shareholding of FHHPL in FHL [Fortis Healthcare Limited] was directed to be maintained and frozen at levels prevailing on the date of the orders passed for the purposes of satisfaction of the Foreign Award," the order said. The Court added, "The attenuation of shareholdings in FHL resulting from the sale of those shares was in apparent violation of the sequestration orders. Any claims which could have been possibly asserted by any third party thus stood eclipsed by virtue of those orders. Those orders were essentially aimed at tackling the looming threat of dissipation of assets by the J.D.s’(Judgement Debtors) and for ensuring that these assets do not fall outside the reach of Daiichi during the pendency of the enforcement proceedings relating to the Foreign Award." .The Court also rejected objections raised by the Indiabulls Housing Finance Limited (IHFL) and Fortis Hospitals Limited against the release of the deposit.Justice Varma termed IHFL’s submission that after being purged of contempt, it has been “cleansed” of all wrongdoing."The Court is of the firm view that once IHFL had accepted its guilt and had suffered a judgment on merits, it was wholly impermissible for it to have reagitated the very same issues all over again in these proceedings. A wholly preposterous submission was addressed on its behalf with it being contended that since IHFL had purged itself of the contempt it must be viewed as being “cleansed” of all wrongdoing."The fact that the objections raised by IHFL were identical to those which were urged before the Supreme Court amounted to a clear abuse of the process of court, the Bench held.It, therefore, imposed costs of ₹10 lakh on IHFL, which will be paid to Daiichi..Senior Advocates Arvind Nigam and Arun Kathpalia along with Advocates Amit Kumar Mishra, Devna Arora, Samridhi Hota, Varad Choudhary, Gauri Goburdhun, Astha Ahuja, Diksha Gupta, Rohan Jaitley, Kunal Chatterji, Giriraj Subramanium, Simarpal Singh Sawhney, Siddharth Juyal and Urvashi appeared for Daiichi and objector Aahan Infrastructure.Advocates Aditya Dewan and Sahil Chandra appeared for Respondents R 6 to 8.Advocates Devina Sehgal and Mohd Ashaab appeared for Respondents 16 and 17.Senior Advocate Ritin Rai along with Advocates Shally Bhasin, Chaitanya Safaya, Prateek Yadav, Gunjan Mathur appeared for Yes Bank.Senior Advocate Sanjiv Kakra with Advocates Shally Bhasin, Chaitanya Safaya, Prateek Yadav and Akash Madan represented Axis Bank.Religare was represented through Senior Advocates Ashish Dholakia and Advocates Sandeep Das, Siddharth Sharma, Anandini Kumari and Peeyush Agarwal.Credit Suisse and Judgement Debtor 25 was represented through Senior Advocate Jayant Mehta and Advocates Roopali Singh, Durga P, Sayobani Basu and Akash Ray.Advocates Gaurav Mitra, Atul Sharma, Aditya Vashisth, Ananad Sengar and Himanshi Rajput for Respondent 22.Advocates Sumit Goel, Sonali Gupta, Ishan Nagar for ICICI Bank.Senior Advocates Rajiv Nayar and Abhinav Vasisht with Advocates Sanjeev Sharma, HS Chandhioke, Vaibhav Kakkar, Sahil Arora, Saleem Hassan, Vaishali Goyal, Rohit Dahiya, Siddharth Jain, Hriday Kochhar, Sannya Sud, Akshita Sachdeva and M Das Gupta represented Fortis Healthcare Limited.Advocate LK Giri appeared for garnishee RWL.Advocates Ateev Mathur, Tushar Sahu and Divya Rana appeared for RBL Bank..[Read Judgment]

Delhi High Court allows Daiichi Sankyo to withdraw ₹20.5 crore from Registry deposited by IHFL in contempt case

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