- (1.) BOTH the appellants arc public limited companies incorporated in the United Kingdom. Burmah Castrol Plc is also a public limited company incorporated in the United Kingdom. Pursuant to an offer made by the appellant No. 1, Burmah Castrol Plc became its wholly owned subsidiary. Burmah Castrol Plc has a subsidiary namely Burmah Castrol holdings Ltd., which in turn has a subsidiary namely Castrol Limited (Appellant No. 2). Castrol Ltd. has a subsidiary company namely Castrol India Ltd. with 51 per cent shareholding. Castrol (India) Ltd. also a public limited company, is incorporated in India. Equity shares of Castrol (India) Ltd. are listed on the Stock Exchange, Mumbai and also permitted for trading on the National Stock Exchange.
(2.) On 14-3-2000 the appellant No. 1 issued a press announcement stating that subject to certain pre-conditions being met, it was prepared to make an offer in the United Kingdom for the acquisition of the entire share capital of Burmah Castrol Plc. It was also stated in the announcement that the offer would only be made if the following pre-conditions were satisfied that (i) all applicable waiting periods under the Hart-Scott Rodino Antitrust Improvement Act, 1976 and the regulations thereunder expiring, lapsing or otherwise terminating; and (ii) the European Commission issuing a decision declaring the merger to be compatible with the common market, and that if EEC or the FTC refused to grant the regulatory approvals the offer would lapse. On receipt of the requisite approvals from the concerned authorities, the appellant No. 1, posted the first formal letter of offer to the shareholders of Burmah Castrol Plc on 8-6-2000. The offer so made was subject to certain conditions which included (i) the condition that the appellant would be bound by the offer only if valid acceptance was received from not less than 90 per cent of shareholders of Burmah Castrol Plc, unless such requirement is waived by the appellant (the Acceptance Condition) and (ii) no material adverse change having occurred in the business, assets, financial or trading position or profits of any member of the Burmah Castrol Group taking as a whole (the Material Adverse Change Condition). On 7-7-2000, upon receipt of acceptance from more than 50 per cent of the shareholders of Burmah Castrol Plc, the appellant No. 1 waived the Acceptance Condition, the Material Adverse Change Condition and all other conditions and declared the offer wholly unconditional. As a result of the said acquisition of the shares of Burmah Castrol Plc, it became a subsidiary of the appellant and consequently the appellant No. 1 gained control of all the subsidiaries of Burmah Castrol Plc, including Castrol (India) Ltd. In that contest, on 10-7-2000, the appellant No. 1 approached the respondent, seeking exemption from the requirement of making a public offer for acquisition of upto 20 per cent of the shares of Castrol India Ltd. as required under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the Regulations). The said exemption application was disposed of by the respondent vide order dated 7-8-2000, by granting exemption subject to certain conditions which was not acceptable to the appellant. The appellant withdrew on 6-12-2000 its request for exemption and proceeded to take steps to make public offer to the shareholders of Castrol (India) Ltd., as required under the Regulations, and for that purpose, a draft text of the public announcement was filed with the respondent on 6-12-2000, wherein the offer price was shown as Rs. 311.91 calculated by taking 7-7-2000 as the relevant date. The appellant did not receive immediately any comments on the draft text of the announcement, from the respondent. On 11-12-2000 the appellants made a public announcement for acquiring 20 per cent of the equity share capital of Castrol (India) Ltd., at a price of Rs. 311.91 per share. On 10-1-2001 the appellants received a letter from the respondent asking them not to proceed with the dispatch of the letter of offer and also to await its comments. Thereafter the matter was discussed between the parties. In the absence of any consensus, the respondent by its communication dated 16-2-2001 inter alia directed the appellants to revise the minimum offer price taking 14-3-2000 as the relevant date and also to correspondingly increase the deposit in the escrow account. The appellants challenged the said order by filing an appeal in the Tribunal (appeal No. 11 of 2001). The appeal was disposed of by the Tribunal on 27-4-2001, holding that the relevant date for the purpose of deciding the offer price to the shareholders of Castrol (India) Ltd. should be 14-3-2000 and not 7-7-2000. On 16-5-2001 the appellants filed an appeal against the said order in the Hon'ble Bombay High Court (appeal No. 582 of 2001). During the pendency of the said appeal, the respondent by its letter dated 23-7-2001 directed the merchant banker of the appellants to proceed with the offer formalities within 15 days from the date of receipt of the letter and to pay interest @ 15 per cent per annum on the open offer price for the period from 14-3-2000 till the actual date of payment of consideration to the shareholders under the public offer. Since the appellants felt aggrieved by the said direction, they amended their pending appeal in the Hon'ble High Court to impugn the said direction. It has been stated that at the stage of oral arguments, the Hon'ble Court suggested that the appellants should adopt the statutory remedies against the respondent's said order and ought not directly approach the Hon'ble High Court and accordingly the challenge to the levy of interest was not argued before the Hon'ble High Court. They decided to file an appeal in the Tribunal under section 15T of the Securities and Exchange Board of India Act, 1992 ('the Act'). The present appeal is in the said context. It is understood that the Hon'ble High Court has already dismissed appeal No. 582 of 2001.
(3.) SHRI A.M. Setalvad, the learned senior counsel, appearing for the appellants submitted that levy of interest vide order dated 23-7-2001 was done as an afterthought in as much as whilst passing the original order on 16-2-2001 or at anytime thereafter, till 23-7-2001, no claim for payment of interest was made by the respondent. SHRI Setalvad submitted that the original order dated 16-2-2001 did not contain any direction for payment of interest, that once the order dated 16-2-2001 was made by the respondent, and the matter was carried in appeal by the appellants, the respondent ceased to have any authority to modify/review the order the learned senior counsel stated that the appeal against the said order filed in the Tribunal was dismissed on 27-4-2001 and till 23-7-2001 there was no demand or any direction from the respondent to pay interest, that for the first time payment of interest was brought up by the respondent in its affidavit dated 26-6-2001 filed in reply to the appellant's writ petition in the Hon'ble Bombay High Court. He pointed out that the impugned direction is to pay interest from 14-7-2000, more than a year before the direction was given. According to the learned senior counsel such a direction with retrospective effect is unfair, inequitable and not permitted in law.;