Case Note & Summary
The Supreme Court disposed of two civil appeals arising from Special Leave Petitions concerning competing open offers under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The appellant, Digvijay Laxhamsinh Gaekwad (Danny Gaekwad), challenged the public announcement date of an open offer made by private respondents (M/s. Puran Associates Private Limited and others). The private respondents contended that the public announcement was made on 25.09.2023, while the appellant argued it was made on 18.01.2025. The appellant had filed an application before SEBI on 22.01.2025, which was pending. SEBI had also asked the appellant to move an exemption application under Regulation 11, which was done out of abundant caution. The tendering period was set to close on 07.02.2025. The court heard the parties, including the Solicitor General for SEBI, and noted that the primary issue regarding the date of public announcement under Regulation 20(1) was yet to be decided by SEBI. The court also noted that the private respondents had deposited ₹330 crores in an escrow account on 26.09.2023. The court passed an interim order directing the appellant to deposit ₹600 crores in cash or bank guarantee by 12.02.2025, failing which the order would be automatically vacated. The tendering period was extended until 12.02.2025, and if the deposit was made, the offer would continue until three days after SEBI's order on the appellant's application. The court clarified that the order was interim, without prejudice to the parties' rights, and would not be treated as a precedent. The appeals were disposed of accordingly.
Headnote
A) Securities Law - Takeover Regulations - Competing Offers - Date of Public Announcement - Regulation 20(1) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 - The core issue is whether the public announcement date is 25.09.2023 (as contended by private respondents) or 18.01.2025 (as contended by appellant). The court noted that SEBI has yet to decide this aspect and directed interim measures pending SEBI's decision. (Paras 1-4) B) Securities Law - Takeover Regulations - Exemption Application - Regulation 11 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 - The appellant moved an exemption application under Regulation 11 out of abundant caution at SEBI's request. The court directed that SEBI shall decide the exemption application along with the main issue. (Paras 3-4) C) Securities Law - Takeover Regulations - Offer Price - Regulation 20(9) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 - The appellant contended that the offer price should be the higher of the acquisition price as on 25.09.2023 or the market price as on 18.01.2025. The court did not decide this issue but left it for SEBI. (Paras 3-4) D) Securities Law - Takeover Regulations - Interim Directions - The court directed the appellant to deposit ₹600 crores in cash/bank guarantee by 12.02.2025, extended the tendering period until 12.02.2025, and further extended it until three days after SEBI's order if the deposit is made. The order is interim and without prejudice. (Paras 5-6)
Issue of Consideration
The primary issue is the date on which a public announcement of an open offer was made under Regulation 20(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, and the consequent validity of the competing offer and exemption application.
Final Decision
The Supreme Court disposed of the appeals with interim directions: (1) Appellant to deposit ₹600 crores in cash/bank guarantee by 12.02.2025; (2) Tendering period extended to 12.02.2025, and if deposit made, further extended until three days after SEBI's order; (3) SEBI to decide the pending application and exemption application on merits; (4) Order is interim and without prejudice.
Law Points
- Competing offers under Regulation 20 of SEBI Takeover Regulations
- 2011
- Date of public announcement
- Exemption under Regulation 11
- Offer price determination
- Interim directions pending SEBI decision
