In this background disputes arose between the parties and the brothers of Respondent No.3, Shri C.K. Somany filed Civil Suit No.35 of 1997 before the Calcuatta High Court against Respondent Nos.2 and 3 and others for specific performance of the agreement dated August 5, 1994.
The Board permitted the Merchant Banker to get the shares valued by any other Chartered Accountant.
The offer price proposed to be mentioned in the public announcement was Rs.40 per share as determined by the Merchant Banker namely, M s. UTI Bank on the basis of the MOU dated October 7, 2002 between Respondent No.3 Shri C.K. Somany and his brother Shri K. Somany for sale of the shares of the target companypany Rs.40 per share.
In the circumstances set forth above the Board accepted the valuation report of M s. Patni and Company and by its order of August 19, 2005 approved the draft letter of offer incorporating the revised offer including interest.
The Appellate Tribunal by its impugned judgment and order dismissed all the appeals.
Respondent No.3, who is the real companytesting respondent, on the other hand companytended before the Appellate Tribunal that the valuation of shares was done having regard to the parameters laid down under Regulation 20 5 of the Takeover Code and the Board had taken all necessary precautions to safeguard the interest of the shareholders so as to ensure payment of best price for the shares to be sold by them.
Before approving the draft letter of offer, and having regard to the objections raised by the appellants, the Board appointed M s. Patni Company to value the shares.
137, 159, 160, 161 and 164 of 2005 and Civil Appeal No.1740 of 2006 has been filed against Appeal Nos.
Having numbericed the background facts in which the companytroversy arose, the appellate Tribunal observed that the valuation of shares companyld be impeached on the ground of fraud, mistake or miscarriage of justice.
The public announcement was made by respondent Nos.2 and 3 herein to acquire the balance 19.19 share of the target companypany held by the minority shareholders on November 30, 2003.
The appellants still persisted in their objection that the value of each share determined by the aforesaid firm of valuers was number companyrect.
While Civil Appeal No.1672/2006 arises out of Appeal Nos.
In that suit an ex parte order of injunction was passed restraining Respondent No.3 Shri C.K. Somany from selling the shares obtained from the other brothers in the target companypany.
2 and 3 were number satisfied with the higher valuation of M s. Patni and Company and, therefore, the Merchant Banker wrote to the Board objecting to the same on March 9, 2005.
Respondent Nos.
The aforesaid firm of valuers determined the price of each share of the target companypany as Rs.43.02 Ps.
In these circumstances, the Merchant Bankers in companysultation with the Board appointed M s. R. Chadha and Company to value the shares of the target companypany.
The application made by Respondent No.3, Shri C.K.Somany for exemption for making an open offer was rejected by the Board and he was directed to companyply with the requirements of the Takeover Code particularly those companytained in Chapter 3 thereof.
It may be numbericed at this stage that by letters dated March 11, 2004 and June 11, 2004 appellant G.L. Sultania had companyplained to the Board against the valuation of shares by the Merchant Banker and while doing so he had enclosed companyies of two valuation reports of M s. Anand K. Associates and M s. Sanjay Bajoria and Associates valuing the shares of the target companypany at much higher rates namely, Rs.408/ and Rs.590/ per share.
1704 OF 2006 L. Somany and others .Appellants Versus The Securities and Exchange Board of India and others .Respondents AND CIVIL APPEAL NO.
It was further companytended that the shares were valued by three reputed firms of valuers and the Board ultimately approved the highest price per share determined by the firm of valuers appointed by the Board namely, M s. Patni and Company.
1 SCC 499.
The appellants tendered the shares without prejudice to their rights and companytentions but challenged the order of the Board before the Appellate Tribunal.
This, however, is disputed by Respondent No.3, Shri C.K. Somany.
158, 162, 163 and 139 of 2005.
From the facts stated above it will appear that the shares of the target companypany have been valued by three firms of Chartered Accountants, namely, M s. Deloitte Haskin and Sells who valued the shares of the target companypany at Rs.43.02 per share, M s. Patni and Company who valued each share of the target companypany at Rs.64.17 and M s. Chadha and Company who valued each share of the target companypany at Rs.60.04.
The aforesaid valuers namely, M s. Patni Company valued the shares of the target companypany at the rate of Rs.63.50 per share by one method and Rs.64.17 by another method which had the approval of this Court in Hindustan Lever Employees Union vs. Hindustan Lever Ltd. and Others 1995 Supp.
The offer was opened on August 31, 2005 and closed on September 19, 2005.
WITH CIVIL APPEAL NO.
1740 OF 2006 K. Somany and others .Appellants Versus The Securities and Exchange Board of India and others .Respondents P.SINGH, J. This batch of appeals has been preferred by the appellants under Section 15Z of the Securities and Exchange Board of India Act, 1992 hereinafter referred to as the Act impugning the companymon judgment and order of the Securities Appellate Tribunal, Mumbai dated December 8, 2005 disposing of eleven appeals before it.
Certain other matters were also incorporated in the original public announcement as directed and a companyrigendum was issued accordingly.
According to the report of M s. T.R. Chadha Company submitted on April 13, 2005 the fair market value of each share of the target companypany was Rs.60.04.
The appellants companyplained to the Board that the price offered for the shares in the public announcement was very low and had number been determined in accordance with the parameters laid down in Regulation 20 5 of the Takeover Code.
The appellate Tribunal, however, numbericed that there was numberallegation of mala fide either against the Board in approving the public offer or against the three valuers whose reports were companysidered by the Board.
The Appellate Tribunal by its order of December 8, 2005 dismissed the appeals preferred before it.
A Memorandum of Understanding had been recorded on October 7, 2002 between Respondent No.3, Shri C.K. Somany and his brother Shri S.K. Somany to acquire 7.30 of the shares of the latter in the target companypany Rs.40 per share.
134 and 138 of 2005 Civil Appeal No.1704/2006 has been filed against Appeal Nos.
However, in view of the directions of the Board, Respondent No.3 was required to make an open offer to all the share holders of the target companypany including his brothers.
Since the price offered by the acquirers respondents 2 and 3 as determined by the Merchant Banker was number acceptable to the appellants, respondents 2 and 3 in companysultation with the Merchant Banker namely, M s. UTI Bank appointed M s. Deloitte Haskin and Sells, a firm of Chartered Accountants, to value the shares of the target companypany.
During the pendency of the Suit Shri S.K. Somany one of the brothers of Respondent No.3 offered to sell 7.30 share held by him in the target companypany on the basis of price mutually acceptable to the parties.
It companyld also be interfered with if there was an apparent or arithmetical error or the valuers took into account something, which ought number to have been taken into account or interpreted the regulations wrongly, or proceeded on some erroneous principles.
