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M/s Daiichi Sankyo Company Limited vs Oscar Investments Limited & Ors.

Not available · 2022 INSC 994Decided 22 Sept 2022
Not available
Uday Umesh Lalit · Indira Banerjee · K.M. Joseph

Background

Daiichi Sankyo had won a foreign arbitral award of roughly Rs.2,562 crores against Malvinder Mohan Singh, Shivinder Mohan Singh (the "Singh Brothers") and a web of companies they controlled (including Oscar Investments and RHC Holding), after a dispute connected to the erstwhile Ranbaxy group. While Daiichi tried to enforce this award in the Delhi High Court, it repeatedly alleged that the Singh Brothers and their associated companies (including Fortis Healthcare entities) were quietly moving assets and shares out of reach to defeat the award, despite giving repeated assurances/undertakings to the courts that assets would remain available to satisfy the award. The Supreme Court had already found several of these individuals guilty of contempt in an earlier 2019 judgment and given them a chance to "purge" themselves by offering adequate assets; this judgment decides what happens next.

Decision Breakdown

The Court held that the assets Malvinder and Shivinder Singh (Contemnors 9 and 10) offered to purge their contempt were grossly inadequate to satisfy the award, so they had failed to purge themselves and were sentenced to six months' imprisonment plus a fine of Rs.5,000 each (with a further two months' imprisonment in default of paying the fine). On the separate question of whether various banks/financial institutions and Fortis Healthcare Limited had colluded in dissipating pledged shares and assets, the Court found the record insufficient to reach firm conclusions and declined to pass adverse orders against them at this stage; instead it directed the executing court (Delhi High Court) to appoint forensic auditors to examine these transactions in detail. The Court also directed that money already deposited in the Supreme Court's registry, along with certain shares still held by banks, be transferred to the executing court to be used towards satisfying the award, while leaving broader questions (like the transfer of Rs.4,000 crores to a Singapore trust and other IBC/criminal proceedings) to be pursued through the appropriate forums.

Lesson Learnt

Giving repeated assurances to a court about preserving assets, while actually working to place them beyond a creditor's reach, can result in imprisonment for contempt. Courts will not treat such undertakings as mere formalities. At the same time, complex questions about the conduct of third parties like banks require proper fact-finding (such as forensic audits) rather than summary findings in contempt proceedings.

Official source (sci.gov.in)View Judgment (PDF)

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