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TMI Blog2016 (12) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate entity [Regulation 2(1)(e)(2)(i) of the Regulations] and also its directors and associates [Regulation 2(1)(e)(2)(iii) of the Regulations]. If this is what is contemplated under the Regulations we do not see how the first argument advanced by Shri Divan on behalf of the respondents can have our acceptance. Insofar as the second argument advanced by Shri Divan is concerned it is correct that in the definition of 'offer period' contained in Regulation 2(1)(f) of the Regulations, relevant for the present case, a concluded agreement is not contemplated to be the starting point of the offer period. But such a consequence must naturally follow once the offer period commences from the date of entering into a Memorandum of Understandin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the aforesaid reversal, Securities Exchange Board of India (hereinafter referred to as SEBI ) is in appeal before us. 2. The relevant facts are not in dispute. The first respondent herein Burren Energy India Ltd. (hereinafter referred to as Burren ) was incorporated in December, 2004 under the laws of England and Wales with its registered office in London. Burren was formed to acquire the entire of the equity share capital of one Unocal Bharat Limited (hereinafter referred to as UBL ), incorporated in Mauritius in July, 1996. The shares of the aforesaid UBL were acquired in September, 1996 by one Unocal International Corporation (for short UIC ) incorporated in California in USA. 3. Admittedly, UBL did not carry out any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22(7) of the Regulations inasmuch as the said appointment was made during the offer period which had commenced on and from 14th February, 2005 i.e. date of execution of the share purchase agreement. 6. To appreciate the issue the provisions of Regulation 2(1)(f) of the Regulations which defines 'offer period' and Regulation 22(7) of the Regulations alleged to have been violated by the respondents may be extracted below: 2(1)(f) Offer period means the period between the date of entering into Memorandum of Understanding or the public announcement, as the case may be and the date of completion of offer formalities relating to the offer made under these regulations 22. General obligations of the acquirer.-(1)........... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ambiguity or uncertainty in the provisions of the Regulations the definition of 'offer period' has to be literally interpreted. The learned Tribunal went into the dictionary meaning of the expression 'Memorandum of Understanding' and went on to hold that the same falls short of a concluded contract. As there was no Memorandum of Understanding between the parties it is the date of public announcement that would trigger of the commencement of the 'offer period'. As the appointment of the Directors in the target company was made on 14th February, 2005 and the public announcement was made on 15th February, 2005 the learned Tribunal was of the view that the respondents (appellants before it) cannot be held liable for viol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company will operate only when the acquirer or persons acting in concert are individuals and not a corporate entity. This is because under Section 253 of the Companies Act, 1956 (corresponding to Section 149 of the Companies Act, 2013) there is an embargo on a body corporate from being appointed as a director. Shri Divan has also drawn the attention of the Court to the provisions of Regulation 22(7) of the Regulations as it originally existed; its amendment in the year 2002 (which provision is relevant for the purposes of the present case) and the subsequent amendment effected in the year 2011. Shri Divan has submitted that meaning sought to be attributed to the Regulations relevant to the present case i.e. 2002 Regulations has been specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the offer period can be triggered of by an understanding that is yet to fructify into an agreement, we do not see how the same can be said not to have commenced/started from the date of a concluded agreement i.e. share purchase agreement as in the present case. 13. On the view that we have taken we will have to hold that the learned Tribunal was incorrect in reaching its impugned conclusions and in reversing the order of the Adjudicating Officer. Consequently the order of the learned Tribunal is set aside and that of the Adjudicating Officer is restored. The penalty awarded by the Adjudicating Officer by order dated 25th August, 2006 shall be deposited in the manner directed within two months from today. 14. The appeal consequently is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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