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TMI Blog1989 (5) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court of Bombay and Civil Suit No. 1172/88 pending before the Civil Judge, Junior Division Bench, Baroda, Gujarat, be transferred to this Court for disposal. It would be appropriate to deal with the facts of one of these, i.e., W.P. No. 1791/88, which was filed in Delhi High Court in T.C. No. 161/88. The other writ petitions and the suit raise more or less identical problems and issues on more or less same facts. The petitioner in that writ petition is one Narendra Kumar Maheshwari and the respondents are the Union of India, the Controller of Capital Issues, and Reliance Petro-chemicals Ltd. (RPL). The case of the petitioner is that he is an individual who is a public spirited person and is an existing shareholder of the Company known as Reliance Industries Ltd. (RIL), which was the promoter of Reliance Petrochemicals Limited, being the respondent No. 3. The petitioner held at all relevant times 144 shares of RIL and 100 debentures of different categories. The respondent No. 3, being RPL, was a newly set up public limited company for the purpose of carrying on the business of manufacture of petrochemicals. These petitions were filed in different courts challenging the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further stated that it was thus not clear what the equity capital of the Company would be, whether it would be Rs. 150 crores or Rs.600 crores or whether the residual amount would go into reserve account or whether a separate account would be opened in respect of the premium. It was alleged that the respondent No. 3 being RPL had been promoted by RIL and the past history of RIL showed that the share prices of RIL had fluctuated widely leaving lot of scope for manipulations. It was alleged in the petition that there was no explanation from the company or anybody from the share market as to why the share prices fluctuated so widely and it was obvious that there were market operators who prop up or bring down the prices depending on how it suited their convenience. The share value of RIL, the promoter company, was subjected to wide fluctuations on account of the purchase and sale operations of certain interested quarters close to the management of the respondent No. 3 Company, it was alleged. On more than one occasion during the past six months, the sale of the share in the stock market was banned in some Stock-Exchanges due to fall in price. It was alleged that it indicated the coope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms: 5% of the face value (equal to nothing) according to the petitioner, would be converted at par on allotment, another 20% {Rs.40) at a premium to be decided by the Controller of Capital Issues after 3 years but before 4 years of allotment and the balance of Rs. 150 at such premium as might be permitted by the Controller of Capital Issues after 5 years but before the end of 7 years from the date of allotment. It was stated that the investors would be completely left thrown at the mercy of respondents Nos. 3 & 4; and that till date no convertible debenture had been issued on such vague terms. In those circumstances, it was submitted, the consent of the Controller of Capital Issues was bad, illegal on the ground hereinafter alleged: The consent order was hit by arbitrary and capricious exercise of jurisdiction by respondent No. 1. It was further alleged that the respondent No. 3's promoters i.e. RIL had been obtaining from respondent No. 1/2 such Consent Orders on the ground that it was in a position to raise such huge moneys from the public for the purpose of implementation of its projects without recourse to the Financial Institutions. According to the petitioner, for the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 3 to the writ application. After disputing the locus of the petitioner, who challenged the consent order for making the public issue of 12.5 Secured Convertible Debentures by 3rd respondent, the respondent No. 3 stated that the petition suffers from laches and delays. On behalf of respondent No. 3 it was asserted that the public issues made by the 3rd respondent had been promoted by RIL. The RIL and RPL are inter connected and represented companies in the large industrial house known as 'Reliance Group'. According to respondent No. 3, they represented India's fastest growing private sector companies and comprised the world's second largest investor family of over 30 lakhs investors. It was further asserted that the 3rd respondent would have India's largest private sector Petrochemical Complex for the manufacture of critically scarce raw-materials. It was stated that the 3rd respondent would manufacture versatile raw-material which was behind the plastic revolution, particulars whereof have been mentioned in the Annexure. It was further stated that the petrochemical complex of the 3rd respondent would come up at Hazira, District Surat in the State of Gujarat and the production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as debenture. Apart from the above, in accordance with the application for listing made by the 3rd respondent to the Bombay Stock Exchange and Ahmedabad Stock Exchange, the 3rd respondent has proposed that all the three components or parts of the instrument, namely, Part 'A' representing an equity share on first conversion, Part 'B' being 20% of the face value of the debenture and Part 'C' being the balance 75% of the face value of the debentures, would all be listed separately and independently so that after allotment, an investor can sell if he so desires the convertible portion of the debentures being Part 'B' and 'C', and just retain the equity share being Part 'A'. It was intended to ensure both liquidity and appreciation in the hands of the investor. The products which were intended to be manufactured by the 3rd respondent were many, namely, (a) High Density Polyethylene (HDPE) and Poly Vinyl Chloride (PVC) which are raw-materials behind plastic revolution; (b) Mono Ethylne Glycol (MEG) is a critical polyester raw-material; HDPE and PVC being vital thermo plastic play an important role in the core sector and are used for manufacture of everything from films to pipes, auto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also not relevant. It was stated that Reliance is privy to the technology of the world leaders, such as Du Pont of U.S.A. and Imperial Chemical Industries of UK. Mr. Pageria, learned counsel appearing for one of the petitioners, Radhey Shyam Goyal tried to impress upon us that among the world leaders of technology, Du Pont of USA and Imperial Chemical Industries of UK cannot claim such high position. Neither is it necessary nor is it possible for us to consider these assertions and denials. The industrial licences have been applied for and it was stated that pending the formation and incorporation of RPL on 4.1. 1988 under the Companies Act, 1956, RIL had undertaken and performed various acts and deeds, particulars whereof have been mentioned in the Statement of Facts. In the Statement of facts filed on behalf of respondent No. 3, a list of consents and approvals obtained by the 3rd respondent, has also been indicated. It was further stated that pursuant to the order of this Court, dated 19th August, 1988 the public issue was made under the prospectus dated 27th July, 1988 which opened on 22nd August, 1988 and closed on 31st August, 1988. There had been an overwhelming response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management and ICICI at length from various aspects including the aforesaid aspect, it was asserted on behalf of respondent No. 3. It was reiterated that the Controller of Capital Issues had applied his mind and considered all relevant, pertinent and proximate matters and the Controller bona fide bestowed painstaking consideration by examining the entire gamut of means of finance, the volume of finance needed and types of securities, marketability of securities, conditions of the capital market and other relevant considerations as are normally and properly to be evaluated by him as an expert authority. A specialised expert statutory authority or agency under a valid and legal enactment has been set up for the purpose of examining on what basis securities such as share and/or convertible debenture should be issued 66 and the merits of his conclusions are not open to judicial review. It has to be borne in mind that the writ petitioners were only potential investors in the shares and debentures proposed to be issued at the time when a large part of the averments had been made. It was open to them, if they felt that the scheme was not attractive not to subscribe to the issues. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debenture conversion of investment of the rights holders is 46.51% and that of the investing public is nil. Hence, after the end of 3 years time the percentage of conversion in investment of rights holders is 100% whereas that of the investment of right holders at the end of 3 years in figures is approx Rs. 107.50 crores and the investing public is only 29.67 crores. Between 3 and 4 years of debenture allotment the percentage of conversion of allotment of rights holders is nil and that of the investing public is 20%. Between 5 and 7 years of the debenture allotment date the percentage of conversion of investment of the rights holders was nil and that of the investing public is 75%. Thus the conversion of the debenture allotment between 3 and 7 years of rights holders is nil and that of the investing public is 95%, which in figures comes to about Rs.563.73 crores. In a democratic set up in the country, it was asserted on behalf of the petitioners, the sanction of the issue amounted to concentration of wealth in one hand which brought danger to the national economy and was against the Directive Principles of State policy enshrined in the Constitution. It was submitted that the vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es as follows: "6% of the face value (Rs.30) would be compulsorily converted into equity at par at 1 year from allotment. 16% of the face value (Rs.80) would be compulsorily converted at 2 years from allotment into equity at a premium to be decided at the time of conversion but not greater than Rs.20 per share. 18% of the face value (Rs.90) would be compulsorily converted into equity at 3 years from allotment at a premium decided at the time of conversion but not greater than Rs.30 per share. 60% of the face value (Rs.300) would be redeemed between 8th and th years from allotment by draw of lots." It appears that the Industrial Credit and Investment Corpn. of India Ltd. (for short ICICI), was the lead financial institution and lead manager for the issue of capital of RPL, and its merchant banking department, having the necessary expertise, was interacting between the 2nd respondent, namely, the Controller of Capital Issues and RPL. Discussions were held with ICICI to evaluate whether the company could proceed with the proposal by respondent No. 3 (RPL) by removing the instrument of cumulative preference shares as also the noncon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debentures. As a practice, it is asserted, respondent No. 2 being the CCI, observed that debenture holders/fixed deposit holders of RIL were not eligible for preferential reservation in the capital issue of RPL, and thus RPL was not permitted to issue capital to these categories on preferential basis and only the shareholders of RIL were permitted preferential entitlement in accordance with the practice. By a Press Release dated 15th September, 1984 the 2nd respondent had issued certain non-statutory guidelines for approval of issue of secured convertible and non-convertible debentures. These guidelines had been subsequently amended by Press Release dated 8.3. 1985. Guidelines were also issued by Press Release on 19.8.1985 for issue of convertible cumulative preference shares. There are guidelines issued by Press Release dated 1.8.1985 for employees stock option scheme. In accordance with the guidelines of 15.9.1984, as amended on 8.3. 1985, the consent for capital issue for secured fully convertible debentures was issued as the projects originally to be established in RIL were permitted by the Deptt. of Company Affairs to be transferred to RPL. The application for industrial lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Note annexed to the guidelines. The guidelines postulate that these debentures should be secured. The proposal itself contemplated that the security would be in such form and manner as required by the trustees for the debenture holders for convertible debentures. It was asserted that it was not a requirement of the guidelines that the debenture issue be compulsorily under-written. The guidelines themselves contemplated that the 2nd respondent could satisfy himself that the issue need not be underwritten. An application to this effect had been made by RPL and was granted by the 2nd respondent after carefully examining this issue. The guidelines contemplated simultaneous listing of shares and debentures. In the present case, upon allotment, there was simultaneous compulsory conversion of 5% of the face value of the convertible debentures. It was stated that it was not an equity linked debenture as was asserted on behalf of the petitioner. However, it was further stated that, in view of the size of the issues, there was a modification dated 19th July, 1988 of the consent order which restricted and put a non-transferability condition on the preferential entitlement of the sharehol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment Corpn. of India Ltd. As regards Convertible Debenture Issue, it was asserted that there is no violation of the provisions of Section 81(5) of the Companies Act, 1956 as the section contemplates only an optional conversion of Government loan into equities. In the instant case, there is a compulsory conversion of publicly held debentures of the convertible type. In the premises, Sec. 81(5) of the said Act has absolutely, according to the deponent, no application to the facts and circumstances of the case. All these petitions challenge only the grant of sanction by the Controller of Capital Issues, though different aspects have been highlighted in the different petitions and we have heard different learned counsel. We have, therefore, to examine what is the scope of the powers and functions of the Controller of Capital Issues while discharging his statutory functions in according sanctions to capital issues. It is further necessary to examine if that role has in anyway, changed or altered due to the present economic and social conditions prevailing in the country. It has also to be considered whether the guidelines or the provisions of law under which the Controller has func ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was a hasty grant of consent in the present case. (b) Secondly, it has been submitted that the RPL was a company which was incorporated only on 11.1.88. RIL had issued a 'G' series of debentures as recently as 1986 for the same projects. In granting consent to the present issue the Controller of Capital Issues has completely over-looked the fact that in respect of the same projects the RIL had been permitted to raise debentures on earlier occasions. We do not think that the petitioners are correct in saying that the Controller of Capital Issues has over-looked or was not aware of the debenture issues by the RIL or the purposes for which these debenture issues had been sanctioned. The application for consent makes it clear that the petitioner company is a new company promoted by RIL and that RIL was promoting this company to manufacture HDPE, PVC and MEG at Hazira. The application refers to the fact that the total cost of the project was expected to be Rs.650 crores and that this cost had been approved earlier in 1985. Considering that RPL had come into existence only on 11.1.1988, this was clear indication that the projects for which the debenture issue was being proposed were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot have at all been considered by the CCI until the RPL produced the industrial licence in its favour, the collaboration agreements, the approvals of the financial institutions and the approvals under the MRTP Act. It is submitted that the application of the petitioner was cleared hurriedly without insisting upon these clearances and this was done specially to oblige the company. We must first of all point out that the pro forma relied on indicates a general procedure and should not be understood as a rigid requirement. It is, of course, the duty of the CCI to be satisfied that before the debentures are actually issued the applicant company has all the necessary licences, consents, orders, approvals, etc. in its favour. We are satisfied that in the present case there is no reason to doubt that he had been so satisfied if one remembers that those projects had been initiated by the RIL which had gone through the necessary exercises and all that remained to be done was a formal approval of their transfer for implementation to the RPL. We shall first refer to the steps taken by the RIL in this regard. On 10th October, 1983 as RIL proposed to engage in manufacture of MEG, it filed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the same was approved by the Govt's order dated 11th October, 1988. It appears that on 9th October, 1984 pursuant to an application made by RIL for foreign collaboration with M/s Union Carbide Corporation, USA, the Govt. of India by its order of that date accorded approval to the terms of the foreign collaboration for a period of six months for this project. It further appears that on 14th March, 1986 pursuant to an application made by RIL, the Govt. accorded approval for foreign collaboration with M/s Scientific Design Company. It may, however, be mentioned that there was a letter dated 30.4. 1986 whereby approval was granted by the Reserve Bank of India in respect of foreign collaboration agreement with M/s Scientific Design Co. USA. The next aspect of the matter which has to be borne in mind in view of the contentions urged was regarding the licences. It appears that there was an application on 25th March, 1987, for licence. On 9th August, 1988 the Industrial Licence dated 25.3. 1984 granted to RIL for manufacture of PVC was endorsed to RIL. This is important because one of the contentions that Shri Pagaria during the course of his long submissions made was that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the light of this that the Board of RIL on 30th December, 1987 passed a resolution to incorporate a 100% subsidiary Company whose main objects were, inter alia, to implement the licences/Letters of Intent received by RIL and the objects of undertaking, processing, converting, manufacturing, formulating, using, buying, dealing, acquiring, storing, packing, selling, transporting, distributing and importing etc. and approved the name of the Company as RPL. On 11th January, 1988 the RPL was incorporated and the Certificate of Incorporation was issued. Thereafter, on 12th January, 1988 letters were written by RIL for endorsement of licences/Letters of Intent in favour of RPL. The certificate of commencement of business was thereafter issued. The Press note earlier referred to makes it clear that the transfers from one company to an allied company were considered unexceptionable except where trafficking in licences is intended. In this situation the change of name from RIL to RPL, of the licences, letters of intent and other approvals was only a matter of course and much importance cannot be attached to the fact that CCI did not insist upon these endorsements being obtained even befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is in close touch with the progress of various projects. On references from the Department of Company Affairs, the CCI (MRTP) Section furnishes comments on the scheme of finance relating to the proposals of industrial undertakings covered under the MRTP Act for effecting substantial expansion for setting up of new undertakings, merger/amalgamations; and acquisition/takeover of other undertakings. The comments are furnished to the Department of Company Affairs with reference to the norms relating to equity debt ratio promoter's contribution, dilution of foreign equity, listing requirements for shares on Stock Exchanges and on analysis of balance sheets for cash generation etc. An officer attends regular meetings of the Advisory Committee meetings held in the Department of Company Affairs in terms of the MRTP Act, hearing held in Department of Company Affairs under section 29 of the MRTP Act, interdepartmental meetings held in the Department of Company Affairs to consider specific issues relating to applications received under the MRTP Act, Licensing-cum-MRTP Committee meetings held in the Department of Industrial Development, screening committee meetings held in the Administrative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 crores with four conversions. In this connection, reference may be made to Annexure 1 at page 39 of the reply affidavit filed in these proceedings by RPL. Thereafter, on 4th May, 1988 RPL made an application to the Controller of Capital Issues seeking permission to make an Issue of Capital on certain conditions. Specific details thereof are not necessary to be set out here. It also made a proposal for issue of 81 lakhs 10% cumulative convertible preference shares of Rs. 100 each for cash at par through prospectus to non--resident Indians/resident Indian public--81 crores. It is stated that in accordance with the present guidelines issued by the Govt. of India, the Company intended to retain excess subscription amount to the extent of 15% of Rs.566 crores, i.e., a right to retain an additional amount. It was further stated that in accordance with the Guidelines issued by the Government of India, the Company had intended to retain excess subscription amount to the extent of 15% of Rs.566 crores, i.e., a right to retain an additional amount of Rs.85 crores. The idea was that the company would in the event of over-subscription request the CCI for allotment of such additional amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect cost emerged at Rs.700 crores instead of Rs.650 crores and it was then felt that RIL should increase its own contribution to the project by way of a promotors' contribution at Rs. 100 crores, thereby increasing its stake to 14% at the suggestion of CCI. It was stated that this was also a requirement of the CCI guidelines and MRTP conditions. At the end of June, 1988, there was an amendment of the Order by the Department of Company Affairs in favour of RPL for PVC. Similarly, on 21st July, 1988, the order for MEG passed for RIL was amended permitting RPL to undertake the new projects for implementation of the MEG Project. It is not necessary to set out in detail these proposals. On 4th July, 1988, CCI granted the consent under the Capital Issues (Control) Act, 1947 to the public issue. There were variations between the proposal and the Order of consent of the CCI. It may be necessary at this stage to refer to the Order dated 4th July, 1988, which is as follows: "With reference to your letter No. BOK/DKG/505(c) dated 8.6.1988, I am directed to say that the Central Govt. in exercise of the powers conferred by the Capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re to the said Order. In that Annexure, certain conditions were laid down and condition (a) stipulated that in any prospectus or other document referred to in section 4 of the Capital Issues (Control) Act, 1947, relating to this issue, the statement required by that section must be worded as follows: "Consent of the Central Government has been obtained to this issue by an order of which a complete copy is open to public inspection at the Head Office of the Company. It must be distinctly understood that in giving this consent the Central Govt. do not take any responsibility for the financial soundness of any scheme or for the correctness of any of the statements made or opinions expressed with regard to them." It further imposed the condition (b) that the consent to lapse on the expiry of twelve months from the date of consent. Order also stipulated that the consent should not be construed as exempting the company from the operation of the provisions of the Monopolies & Restrictive Trade Practices Act, 1969, as amended. The consent also indicated that the company would be subject to any measures of control, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stipulated period as above, a statement signed by the Chief Executive or a person authorised by the Board, certifying that the allotment letters/securities and the refund orders have been despatched within the prescribed time limit as per the condition above. A copy of the statement shall be endorsed to the office of the CCI quoting this consent order and date. (iv) Non-compliance of conditions above shall be; punishable by the Stock Exchange, in addition to the action that may be taken by other competent authorities." The other conditions mentioned therein are not very relevant. These only enjoin certain procedural safeguards. The said consent order was amended on the 19th July, 1988, which clarified that the intention for imposing condition (w) as set out above, was not to block all the funds raised out should be invested in terms of the conditions laid down aforesaid. The amendment enjoined that the approval of the Central Government should be subject to the condition that allotment to the employees should not exceed 50 debentures per individual. It was further added that the company should obtain prior approval of the Reserve Bank of India, Exchange Control Department, for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1988, the issue of RPL was fully/over subscribed and closed. By October 25, 1988, the basis of allotment was approved by Ahmedabad Stock Exchange. A resolution of the Board of Directors of RPL was passed on October 27, 1988 to allot the debentures/shares. On November 4, 1988, lease deed for land at Hazira between RPL and GIDC was executed. There was no objection certificate obtained from GIDC. It is asserted that the Debenture Trust Deed between RPL and ICICI was executed at Surat and was lodged for registration on November, 7, 1988. Certificate of Mortgage under Section 132 of the Companies Act, 1956 was issued by the Registrar of Companies, Gujarat regarding the creation of charge for the Debentures on November 11, 1988 itself. In this context, on behalf of the respondents, Mr. Baig drew our attention to certain dates indicating that the writ petitioners were aware of this and it was stated that on July 20, 1988, Mr. Radheyshyam Goyal, the Writ Petitioner in Rajasthan High Court, wrote a letter to the Editor of the Financial Express that the premia for the issue of shares upon the second and third conversion had not been fixed and the terms and conditions were vague. Shri Goya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tage to refer to the said guidelines. It appears that from time to time, in exercise of the powers conferred by section 12 of the Capital Issues (Control) Act, 1947, the Central Government had issued rules and guidelines. On or about April 17, 1982, guidelines were issued by the Government of India under the said Act for the "Issue of Debentures by public Limited Companies". It is not necessary to set out in detail these guidelines, but it may be necessary to refer to clauses (4) and (6) of the said guidelines. Clause (4) reads as follows: "4. Debt-equity.' The debt-equity ratio shall not normally exceed 2: 1. For this purpose: "Debt" will mean all term loans, debentures and bonds with an initial maturity period of five years or more, including interest accrued thereon. It also includes all deferred payment liabilities but it does not include short-term bank borrowings and advances, unsecured deposits or loans from the public, shareholders and employees, and unsecured loans or deposits from others. It should also include the proposed debenture issue. "Equity" will mean paid-up share capital including preference capital and free reserves. Notes: (1) The computations under guideli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oan or indebtedness. Section 3(1) of the said Act enjoins that no company incorporated in the States shall, except with the consent of the Central Government, make an issue of capital outside the States. The other sub-sections of Section 3 deal with the modalities of such consent. It may be mentioned that the Statement of Objects and Reasons of the Act states that the object of this measure is to keep in existence .... the control over capital issue which was imposed by Rule 94-A of the Defence of India Rules in May, 1943 and continued in force after the expiry of the Defence of India Act by Ordinance No. XX of 1946. The Statement further states that although there has been an appreciable change in the general conditions which constituted the principal reason for the introduction of the control during war-time, it was thought in the light of experience gained that the control was still necessary to secure a balanced investment of the country's resources in industry, agriculture and the social services. (See Gazette of India, 1947, Part V, p. 264). In this connection, Shri G. Ramaswamy, learned Additional I Solicitor General for the Union of India drew our attention to the Debate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought that by a regulation, it was essential that in the prospectus it should be clearly stated that the sanction by the Government did not mean any guarantee about the suitability or the successful running of the industry. Therefore, this sanction of the Government should be stated more clearly and the public should be clearly warned that a sanction of the Government did not imply any sort of guarantee by the Government. We have referred to the debates only to highlight that the purpose of the Bill was to secure a balanced investment of the country's resources in the industry and not to ensure so much the soundness of the investment or give any guarantee to the investors. The section of the Act in question in express terms does not enjoin the CCI to discharge such obligations nor does the background of the Act so encompass. There was considerable discussion before us as to the scope of the powers and responsibilities of the CCI while granting his consent to an issue of shares and debentures proposed by a company. As stated above, the learned Additional Solicitor General submitted that the restrictions on issue of capital were introduced as part of the control measures found neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time the Act was passed, the present duties of the CCI have to be construed in the context of the current situation in the country, particularly, when there is no clear cut delineation of their scope in the enactment. This line of thought is also reinforced by the expanding scope of the guidelines issued under the Act from time to time and the increasing range of financial instruments that enter the market. Looking to all this, we think that the CCI has also a role to play in ensuring that public interest does not suffer as a consequence of the consent granted by him. But, as we have explained later, the responsibilities of the CCI in this direction should not be widened beyond the range of expeditious implementation of the scheme of the Act and should, at least for the present, be restricted and limited to ensuring that the issue to which he is granting consent is not, patently and to his knowledge, so manifestly impracticable or financially risky as to amount to a fraud on the public. To go beyond this and require that the CCI should probe in depth into the technical feasibilities and financial soundness of the proposed projects or the sufficiency or otherwise of the security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the public interest lay and what the equity of the case demanded. It was contended by Shri Haksar that there were departures from the guidelines and there was no indication as to why such departures had been made. We are unable, however, to accept the criticism that there has been derivations from the guidelines which are substantial. We have referred to the guidelines. We do not find that there has been any requirement of such guidelines which could be considered to be mandatory which have not been complied with. We have considered this carefully and found that there have been no deviations from paras 3, 5, 12, 13 and 14 of the guidelines. Nor has there been, as pointed out by the respondents, any infraction of guidelines nos. 2 and 4. The fact that debentures of the face value of Rs.200 have been approved as against the normal face value of Rs. 100 envisaged under para 8 or that the requirements of the service of underwriters have been dispensed with in exercise of the discretion conferred by para 11 do not constitute arbitrary, substantial or unjustified deviations from those guidelines. There has been sufficient compliance with the guidelines on the quantum of issue, debt-equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debentures were "secured fully convertible" ones. This is also what had been set out in the application for consent. Though the company does claim that the debentures were also fully secured, it is submitted that the emphasis in the issue was that the debentures were fully convertible and secured. We think this explanation is plausible and do not think that any importance or significance need be attached to the different description in some places, particularly, in view of our discussion below as to the extent and nature of the security actually provided for the debentures. (ii) The second contention is that the security offered, on the face of it, falls far short of the face value of the debentures. Sri Ganesh analysed before us some statements indicating the inadequacy of the security. It was submitted by him that as per page 6 of the prospectus issuing the debentures, after implementation of the projects only the following assets would be available with the company: Rs. in Crores Land and site development 11 Buildings 26 Plant and Machinery 305 Total 342 The assets of Rs.51.25 crores, mentioned in the balance sheet as at 31.5.88 as per the Auditor's re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Not only is the residential complex of the company excluded from the purview of the security, it is also open to the company and the trustees of the debenture holders to agree to the exclusion of any of the assets of the company from the purview of the security. (d) The current assets or the bankers' goods such as stocks, inventories, book debts, receivables, work in progress, finished and semi-finished goods etc. stand excluded from the security. (e) Clause 6 again emphasises that the company shall be at liberty to raise any further loans and secure the same in priority to the present security and/or on such terms as to security, ranking or otherwise as may be mutually acceptable to the. company and the trustees of the debenture holders without being required to obtain any further sanction from the debenture holders. If these clauses are closely perused, Sri Ganesh urges, it will be seen (a) that the charge in favour of the debenture holders has a very poor priority as it can rank subservient to any securities that may be created by the company in future in respect of further borrowings, (b) that the company and debenture trustees, by mutual agreement, can take any of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not stooges of the company. The ICICI is not only a financial institution in the public sector but is also one of the institutions financing the project and thus having a stake in the success of the project. It can be trusted to adequately look after the interests of the debenture holders. Thirdly, as has been pointed out by the company, the misapprehensions of the petitioners are more imaginary than real. The company, in its affidavit, has pointed out that the Debenture Trust Deed dated 7.11.1988, which has since been executed in the present case, contains a provision by which. at the time of creation of any future charge, the terms and conditions as to ranking have to be agreed upon between the RPL and ICICI. Also clause 16 of the Debenture Trust Deed authorises the debenture trustees to intervene and crystallise the charge in their favour, inter alia, in the following circumstances: "If the Company sells the Mortgaged Premises or any part thereof not in the ordinary course of business except a sale, transfer or disposition allowed under the terms of these presents to be made with the consent of the Trustees." (Sub-cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its application as well as the prospectus, carefully skirted round the issue by merely stating that security will be provided to the satisfaction of the trustees and that this is not very helpful as the debenture holders come into the picture only after the funds have been raised. This argument is untenable. We have already pointed out, there was sufficient security as was warranted by the issue. This was an issue of 12.5% fully secured convertible debentures of Rs.200 each. We have examined the share capital, the present issue and the scheme of conversion. In the premises, it is not possible to accept the submission of Shri Ganesh that the Controller satisfied himself (as stated by him in his affidavit) with the bare statement of the applicant company (RPL) that security would be created as per the requirements of the debenture trustees. There was this statement that the debenture trustees were well known financial instutitions and they had been entrusted with this obligation. Learned Additional Solicitor General drew our attention to similar debentures and submitted and, in our opinion, rightly that this was the usual practice. It is not possible for the CCI to ensure more th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely PVC, HDPE and MEG had already been approved by the Department of Economic Affairs in favour of RIL. In that context, in our opinion, to contend that there was violation of the guidelines because the RPL's project was not a new project was too narrow and legalistic view. Shri Ganesh tried to urge that the CCI ought to have been aware of the fact that he had sanctioned a capital issue of Rs.400 crores (subsequently enhanced to Rs.500 crores) to RIL for the same project and that the said issue had been implemented and capital of Rs.500 crores had been mopped up from the public by RIL. The CCI ought to have withheld permission for a fresh capital issue in the name of RPL for the very same project. However, the CC1 did not appear to have applied his mind, according to Shri Ganesh. Consent Order, therefore, according to Shri Ganesh, was bad. We are, however, unable to accept this submission. The CCI was not performing the role of a social mentor taking into account the purpose of RIL. If RlL has misutilised any of its funds or the funds had not been utilised for G-series, then RIL would be responsible to its shareholders or to authorities in accordance with the relevant provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e material shows that the details of the proposals have been examined and discussed and that an examination of the merits has not been a casualty due to the speed with which the application was processed; and especially in view of the fact that no injury has been caused to the investors and no substantial loss to their securities have been occasioned, we are of the opinion that much cannot be made of this criticism. Learned Additional Solicitor General placed before us other instances where applications had been sanctioned within shorter times. Shri Ganesh tried to urge that RIL had declared itself as a promoter of RPL and the prospectus stated that no benefit was being provided to RIL as promotor. But, the entire amount spent by RIL was being reimbursed to it by RPL. In these circumstances, RIL could not be treated differently from the general public in the matter of allotments of the shares of RPL. However, the scheme of allotment was such that gross discrimination resulted against the general investing public and in favour of RIL. The long-term implications, it was urged by Shri Ganesh, of the said discrimination were highly anomalous and unjust for the investing public who had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by RIL as compared with the investor in the debentures. Firstly, RIL's advance is interest free for 3 years whereas the debenture holders get interest at the rate of 12.5% during the period. Secondly, the debenture loan is secured while the RIL's are not. Thus the debenture-holders have certain benefits which RIL does not have and, if the debenture-holders have the disadvantage of having to pay a premium, that cannot constitute basis for a ground of discrimination. These considerations apart, we would like to observe that we are unable to appreciate how any question of discrimination is at all relevant in the present context. It is a company--not the State or a State instrumentality--that is issuing the shares and debentures. It is entirely for the company to issue the shares and debentures on such terms as they may consider practicable from their point of view. There is no reason why they should not so structure the issue that it confers certain greater advantages and benefits on the existing shareholders or promoters than on the new subscribers to the debentures. We do not think that it is permissible for the CCI to withhold consent only for this reason or to stipulate that cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responsibilities of the CCI can no longer be as limited as before. It may no longer be restricted merely to the task of preventing an imbalance of investment in various sectors or the diversion of investment to non-essential projects. The petitioners may perhaps have a point in suggesting that the CCI should be burdened with a duty also to safeguard the interests of the public who are invited to participate in such financing on large scale and at least to satisfy himself that the project for which funds are needed is not in the nature of a "South-sea bubble" and that the volume, terms and conditions of the issue proposed by the company are not such as to constitute a fraud on the public. But we think that the time is not yet ripe for placing on the office of the CCI, as at present constituted, more than a skelital outline of responsibility in this direction; his shoulders are, as yet, not strong enough to bear such burden. He does not have the time, the staff, the powers of enquiry, the benefit of public hearing, the requisite background, or the economic commercial or financial skill or expertise to so assess the technical, commercial and financial aspects of the projects as to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are conducive or ancillary to the directive principles. Nelson, it is reported to have said before the battle of Waterloo. that England expected every man to do his duty. It is well to remember that every authority in a vast developmental society must perform his role keeping in view the part he is expected to play in the background of the whole perspective anti should not encroah upon others taking the onus upon himself to do everything. That would lead to chaos and confusion. Shri Pagaria drew our attention to Section 237 of the Companies Act. 1956. If there was any violation of some of the rights of the parties, they are at liberty to proceed in accordance with law. It was contended that it was an admitted position that RPL is a newly established company though initially financed by RIL. No ceiling had been put on the allotment of the shares to the business associates of Directors whereas at item 5 page 2 of the Consent Order dated 4th July, 1988, the limit of the shares for the employees of the RPL had been reduced from 200 to only 50, thereby, according to Shri Pagaria, depriving the employees having large shareholding in the company which discriminated them vis-a-vis the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en shown. According to Shri Pagaria, the most important is the concentration of wealth in the hands of Ambani family and this aspect has not been considered in granting the consent, which according to him, resulted in violation of Article 39(b) & (c) of the Constitution of India and section 22(3) of the MRTP Act. It was submitted that the consent could not be given in favour of any applicant or company, who had no valid industrial licence nor it possessed the letter of intent under the provisions of Industries (Development and Regulation) Act, 1951. It was submitted that the CCI did not give judicial consideration to the application as in this connection reliance was placed on the decision of the Gujarat High Court in Navjivan Mills Co. Ltd. Kalol, v. In re. Kohinoor Mills Co. Ltd. Bombay, [1972] 42 Co. Cases 265. Some passages of Halsbury's Statutes of England, 4th edn., vol. 8, were referred. It was submitted that the Directors who had received money without disclosing full facts were bound to refund the same and were constructive trustees of the company. This proposition, in our opinion, is irrelevant in the present context. Shri Pagaria sought to urge that RIL management had pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rules and orders made thereunder); Explosives Act (and rules made thereunder); Essential Commodities Act, Atomic Energy Act; Insecticide Act; Air (Prevention and Control of) Pollution Act, 1981; Indian Standards Institution Certification (Marks) Act, 1952 (and rules and regulations thereunder); Foreign Exchange Regulation Act, 1973; Interest Act, 1978; Securities Regulation Act and Dowry Prohibition Act, 1961. We have gone through these provisions. They relate to various types of controls and regulations which have to be observed in the actual running of various types of business. We are satisfied that neither these statutes nor those regulating the grant of consent to the issue of shares and debentures intend that clearances thereunder should all be obtained before filing an application for consent. In our considered view, such requirement is neither practical nor feasible and is not envisaged by the statutes referred to. Some of the contentions of Sri Pagaria alleging misleading statements made by the Company to attract investments, such as the one based on the Dowry Prohibition Act and the description of the issue as the "Family Khazana", are farfetched and unrealistic besides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cured loans or deposits from others. 'Equity' would mean paid up share capital including preference capital and free reserves. Guideline No. 11 is also instructive. The Press Release also was referred to. The trustees to the debenture holders were enjoined to supervise the implementation of the conditions regarding creation of the security of the debentures. It was, therefore, submitted that the trustees of the debenture issue who were to supervise the implementation of the conditions regarding the creation of security, were vested with the requisite powers for protecting the interest of debenture holders. Before formulating the guidelines for protection of the interest of debenture holders considerable deliberations took place between the concerned departments in the Ministry and between the Public financial institutions, investment institutions, Department of Banking and CCI and Reserve Bank of India as a large quantum of debentures were coming to the period of maturity in 1989 onwards and redemption and a need was felt to protect the interest of debenture holders so that no defaults endanger their interests. Consequently,/he question of debenture redemption reserve and the secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed of this cost overrun in 1987 itself by ICICI. Major part of 'G' Series was utilised for PTA and LAB, CCI was also aware of this cost overrun through the proposal of the company to MRTP Commission much prior to granting consent to RPL as CCI is represented in the process of approval for MRTP. CCI's office was informed by ICICI of likely deployment of 'G' Series funds for projects other than MEG and HDPE much prior to the grant of consent to RPL. It was submitted that RIL had received approval to its modified scheme on 17th May, 1988 for its LAB project and on 13th July, 1988 for its PTA Project. However, these formal communications were preceded by the awareness of the CCI in regard to cost overruns in PTA and LAB projects and consequently the non-implementation of MEG and HDPE. Learned Additional Solicitor General, therefore, submitted that it was incorrect to state that the CCI granted consent for issue of debentures for financing the projects of RPL which were already given financing facilities earlier against the 'G' Series debentures. It was submitted that since the projects of MEG and HDPE were not implemented in RIL and were now being implemented in RPL for the first ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is further stated that the statutory information clearly indicated that no amount had been paid or given to the companies promoters or officers or offered to them. The prospectus and the terms and conditions were not approved by the CCI at the time of granting of consent. No discrimination had been practised against the existing shareholders of RIL, while according consent to RPL. The proposal of the 8th June, 1988, as submitted by RPL to the CCI, sought approval for equity participation to the extent of Rs.50 crores only. This Rs.50 crores was by way of unsecured interest-free deposit to be converted at the end of the 36 months into equity shares at par. This substantial addition to the promoter's contribution was to ensure an enhanced participation in the project and to ensure its stake. The Petrochemical Industry has a long gestation period for yielding high profits. The convertible debentures have a fixed return as contrasted to equity participation which might earn a flexible dividend. In the initial period, no dividend ,'night be earned. The CCI therefore applied its mind while evaluating this aspect since a sum of Rs.50 crores was to be non-interest bearing and unsecure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re necessary for the balanced capital structure of the company. The consent, it was submitted, could not be evaluated in hindsight, after the issue was closed and subscribed. It was asserted that today RIL is the third largest industrial house in India. It was stated that the present portfolio of RIL spreads over 2.5 million sharesholders/debenture holders/deposit holders. Till date, it has made 7 debentures issues besides making three equity share capital issues (rights) and 2 bonus shares issue. All the debentures issues were at a premium and over-subscribed. E-Series partly-convertible debentures of Rs.80 crores were issued in 1984-85. F-series non-convertible debentures of Rs.270 crores were issued in 1985-86. G-Series fully-convertible debentures for Rs.500 crores were issued in 1986-87. According to the respondent, the investment in RIL, during this period has proved to be consistently and remarkably profitable to investors. The RIL commenced business in the year 1966 for the manufacture of synthetic cloth made from synthetic yarn and fibre. Their factory was commenced and installed in the vicinity of Ahmedabad at Naroda. In order to manufacture synthetic fabric, the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. It is not necessary to set out however how the company developed in different stages. The application for consent was filed on 4th May, 1988 as mentioned hereinbefore. The licence and letter of intent were endorsed in favour of the RIL and the scheme for finance in favour of the RPL. Both Shri Baig and Shri Salve, appearing for the respondents 3 and 4, gave us the factual background of the business of the RPL. It is not necessary to set out these in greater detail than what has been mentioned hereinbefore. It is further submitted by both that the CCI had examined the nature and quantum of security in cases of the debentures. It was submitted that the submission of Shri Ganesh that the security was inadequate was wrong. It was submitted that clauses (5) and (6) of the Prospectus read together indicate how the power has been exercised. These clauses visualise the creation of a residual or floating charge on all or any of the movable or immovable assets and properties of RPL at Hazira and/or at any other location. These further postulate future charge, superior in priority, might be created by RPL. Future charges might be created without the consent or concurrence of the debentu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commitment to repay the principal with interest (Palmer's Company Law; p. 672; 24th Edition). Reference, in this connection, may be made to The British India Steam Navigation Co. v. The Commissioner of Inland Revenue. [1881] 7 QBD 165; at pages 172 and 173. A debenture may contain charge only on a part of the assets of the company Re. Colonial Trusts Corporation, [1879] (15) Ch. 465 or it may not contain any charge on any of its assets (See Speyer Brothers v. The Commissioner of Inland Revenue, [1907] 1 KB 246 and Lemon v. Austin Friars Investment Trust Ltd., [1926] (1) Ch. 15. A debenture may, therefore, be secured or unsecured (Palmer's Company Law; p. 675; 24th Edition). An ordinary debenture has to be distinguished from a 'mortgage debenture' which necessarily creates a mortgage on the assets of a company (See Palmer's Company Law p, 706). A compulsorily convertible debenture does not postulate any repayment of the principal. Therefore, it does not constitute a 'debenture' in its classic sense. Even a debenture, which is only convertible at option has been regarded a 'hybrid' debenture by Palmer's Company Law (Para 44.07 at page 676). In this connection, reference may be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could not deal with its assets and create future charges, ranking superior in priority, and if it would have to obtain the permission of the debenture holders for doing so. (See the discussion in Palmer's Company Law; page 709 and 682) (See also the observations in Re. Florence Land & Public Works Co., [1878] 10 Ch. 530; Re. Colonial Trust Corporation, (supra). In fact, in Re. Florence Land's case (supra), the Court observed that if the companies were not allowed to resort to floating charge, they would have to call the meeting of existing charge holders/debenture holders each time they intend to create future charge. The decision in Re. Panama, New Zealand, and Australian Royal Mail Co., as indicated in Palmer's Company Law at page 708 is a landmark because it established the validity and the utility of a floating charge. In the instant case, if the permission of the debenture holders were required or is insisted upon to create future security, 2.5 million debenture holders would have to be informed and invited for meeting. The extravagant effects of this course would be colossal especially when a shareholders' meeting is also additionally called for the same body of persons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier floating charge with respect to the ranking of future floating charge then any future floating charge will be inferior to the earlier floating charge. In this connection, reference may be made to sec. 48 of the Transfer of Property Act. The risk of floating charges can be controlled by creating legal mortgage in favour of debenture trustees as has been explained in "All About Debentures" by Sen & Chandrashekhar (pp. 6667). In the present case, a legal mortgage has been created by RPL in favour of the trustees in respect of its immovable and movable assets, except book debts, in respect of which financial institutions will hold a first charge on account of foreign loan. In the present case, RPL does not have any existing loans. Therefore, the charge in favour of the debenture holders is presently the first charge. No future borrowing is contemplated at this stage except the foreign currency loan to the extent of Rs. 84 crores. Therefore, the submission that the security is illusory cannot be accepted and the CCI is right that the apprehension is based on factually unsound and unfounded grounds. Even if the value of the foreign currency which has been sanctioned in prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance certificate. These guidelines apply to "non-convertible debentures" or "partly convertible debentures". These do not apply to "compulsorily convertible debentures". Even assuming that these are applied to "compulsorily convertible debentures", there was no need for the CCI to ask for the bankers prior clearance certificate because RPL was not issuing any new set of debentures. All requisite information had been furnished. Shri Ganesh as well as Shri Pagaria tried to submit that in order to protect the investors, a function, which they submitted, the CCI, in changed circumstances, should determine whether the project is profitable. Where a project has been appraised by an institution like ICICI, the Controller can safely assume that it is profitable and he need not engage in separate independent exercise of his own in this regard. The scope and nature of the Controller's powers and jurisdiction have to be determined in the light of the specific provisions of the CCI Act, its history, the debates, to which we have referred, the capital structure of the national economy and its over all direction, in higher priorities, are decided by the Government and the Planning Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectation in their minds that the authority would abide by such a policy/guideline. However, the doctrine of legitimate expectation applies only when a person had been given reason to believe that the State will abide by the certain policy or guideline on the basis of which such applicant might have been led to take certain actions. This doctrine is akin to the doctrine of promissory estoppel. See also the observations of Lord Wilberforce in IRC v. National Federation, [1982] AC 617). However, it has to be borne in mind that the guidelines on which the petitioners have relied are not statutory in character. These guidelines are not judicially enforceable. The competent authority might depart from these guidelines where the proper exercise of his discretion so warrants. In the present case, the statute provided that rules can be made by the Central Government only. Furthermore, according to Section 6(2) of the Act, the competent authority has the power and jurisdiction to condone any deviation from even the statutory requirements prescribed under Sections 3 and 4 of the Act. In Regina v. Preston Supplementary, [1975] 1 WLR p. 624 at p. 631, it had been held that the Act should be adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eviated from. Any member of the public can perhaps claim that such of the guidelines as impose controls intended to safeguard the interests of members of the public investing in such public issues should be strictly enforced and not departed from departure therefrom will take away the protection provided to them. The scope for such challenge will necessarily be very narrow and restricted and will depend to a considerable extent on the nature and extent of the deviation. For instance, if debentures were issued which provide no security at all or if the debt-equity ratio is 6000:1 (as alleged) as against the permissible 2:1 (or thereabouts) a Court may be persuaded to interfere. A Court, however, would be reluctant to interfere simply because one or more of the guidelines have not been adhered to even where there are substantial deviations, unless such deviations are, by nature and extent such as to prejudice the interests of the public which it is their avowed object to protect. Per contra, the Court would be inclined to perhaps overlook or ignore such deviations, if the object of the statute or public interest warrant, justify or necessitate such deviations in a particular case. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he is a part of a State instrumentalities committed to the endeavours of the constitutional aspiration to secure justice, inter alia, social and economic, and also under Article 39(b) & (c) of the Constitution to ensure that the ownership and control of the material resources of the community are so distributed as to best subserve the common good and that the operation of the economic system does not result in concentration of wealth and means of production to the common detriment. Yet, every instrumentality and functionary of the State must fulfil its own role and should not trespass or encroach/entrench upon the field' of others. Progress is ensured and development helped if each performs his role in the common endeavour. In that light it is true that as was contended by learned counsel appearing 'on behalf of the petitioners that in the changed socioeconomic conditions of the country one who is charged to ensure capital-investment has to perform the social role in capital formation and to protect the interest of the capital market, and to oversee the growth of industrialisation and investment in such a manner as to ensure employment and demand in the national economy to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he whole process of approvals which should be as expeditious as possible. But we have no hesitation in saying that some procedure has to be evolved to ensure that the CCI gets the benefit of the comments, suggestions and objections from the public before arriving at his decision whether to grant consent or not and, if so, on what terms and conditions. Perhaps, evolution of certain rules in this respect could be examined at this juncture of industrial growth in our country. But having regard to the facts and the circumstances of the case in view of the various facts mentioned hereinbefore, we are of the opinion that there was no undue haste. There was proper application of mind that the sanction was for a new project. Sufficient security for the debentures as was enjoined to be ensured before sanction has been ensured in the facts and the circumstances of this case and guidance provided by means of guidelines has been substantially complied with. There has been no infraction as such of the norms required to be followed in granting the sanction. The challenge to the sanction, therefore, must fail. Before we conclude, we must note that good deal of argument was adduced that these app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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