1. Both these appeals are taken up for final disposal with consent of both parties in the common order.
2. The appeal is against the non listing, at the Stock Exchange Mumbai i.e. Respondent No. 2 herein and Hyderabad Stock Exchange i.e.
Respondent No. 3 herein of 10 lac Equity Shares and 10 lakh fully convertible warrants of the appellants allotted to the FIIS,/Promoter and also 25 lakh shares allotted to the appellant No. 2 on preferential basis purportedly pursuant to the Order dated 27th November, 2003 passed by the Securities & Exchange Board of India. The said order dated 27th November, 2003 of the Respondent No. 1 is as under: The Executive Director, Hyderabad Stock Exchange , 3-6-Himayatnagar, Hyderabad - 500 Sub: Preferential Aallotment of 25,00,000 Equity shares of Rs.10/-Allotted to Dr. Koteswara Rao of Transgene Biotech Ltd. Please refer to your letter dated May 26, 2003, regarding the captioned subject.
The aforesaid matter has been examined in the light of provision of SEBI (DIP) Guidelines 2000. it is noted that the aforesaid preferential allotment was done in violation with Clause No. 13.4.1 which states that Allotment pursuant to any resolution passed at a meeting of shareholders of a [company] granting consent for preferential issue of any financial instruments, shall be completed within a period of [fifteen days] from the date of passing of the resolution.
In view of this, the appropriate authority has noted that the factors for avoiding this violation were very much within the control of the company and it has thus violated provisions of SEBI (DIP) Guidelines as stated above. The company is therefore, advised to obtain ratification in a fresh resolution as is required by clause 13.4.3 of chapter XIII of the same Guidelines. The clause stated that If allotment of instruments and dispatch of certificates is not completed within three months from the date of such resolution, a fresh consent of the shareholders shall be obtained and the relevant date referred to in Explanation (a) in paragraph 13.1.1.1 above will relate to the new resolution.
(a) 10 lakh equity shares , 10 lakh fully convertible warrants of appellant No. 1 allotted to FIIs/Promoters.
(b) 25 lakh equity shares of appellant No. 1 allotted to the appellant No. 2 on preferential basis.
4. On 19th October, 2004 this Tribunal granted Interim relief for listing of 10 lakh equity shares and 10 lakh fully convertible warrants in a broad consensus of parties. During the course of arguments, the Respondent No. 2 stated that they have no objection for granting listing of aforesaid shares and warrants indicated at 3(a) above but as far as listing of shares allotted to the Appellant No. 2 at para 3 (b) above are concerned, they require clarification/interpretation of the order dated 27th November, 2003 of the Respondent No. 1, which had granted no objection to the appellants subject to 'ratification' of the earlier resolution dated 10/11/2001.
5. The appellants submitted that Respondent No. 1 sought to interpret the word 'ratification' as stated in their order dated 27/11/2003, contrary to the established meaning and understanding of the word 'ratification', and sought time to file their reply in the above matter.
6. The appellant No. 1 received a communication from Respondent No. 1 bearing No. CFD/DIL/EB/NB/28546/2004 dated 16/12/2004 where inter alia it has been stated by the Respondent No. 1 that "the representation has been examined in light of the provisions in SEBI (DIP) guidelines. The Respondent No. 1 drew the attention of the Appellant No. 1 to the provisions of clause 13.4.3 of DIP Guidelines which provides a recourse which a company take in case it has not been able to complete the allotment within the time specified in clause 13.4.1 of DIP Guidelines.
The Respondent No. 1 Tribunal praying therein for listing at Respondent No. 2 and 3: i.e.
SEBI grants extension from clause 13.4.1 only in those cases where the delay has occurred on account of external facts viz. delay in getting FIBP approval etc. According to the Respondent No. 1 the present case does not fall in this category. The relevant provisions of clause 13.4.1 of SEBI (DIP) Guidelines is furnished below: 13.4.1 Allotment pursuant to any resolution passed at a meeting of shareholders of a [company] granting consent for preferential issue of any financial instruments, shall be completed within a period of [fifteen days] from the date of passing of the resolution.
13.4.3 If allotment of instruments and dispatch of certificates is not completed within three months from the date of such resolution, a fresh consent of the shareholders shall be obtained and the relevant date referred to in Explanation (a) in paragraph 13.1.1.1 above will relate to the new resolution.
(a) "relevant date' for the purpose of this clause means the date thirty days prior to the date on which the meeting of the general body of shareholders is held, in terms of section 81(1A) of the Companies Act, 1956, to consider the proposed issue.
7. The facts of the case is that the Appellant No. 1 company is a public limited company incorporated under the provisions of Indian Companies Act, 1956 and having its Registered Office at Hyderabad.
Appellant No. 2 is one of the promoter directors of Appellant No. 1 company. The Appellant No. 2 is presently the Managing Director of the Appellant No. 1 company and also aggrieved party in the present appeal.
Appellant No. 1 is carrying on business of manufacture and marketing of Medical Diagnostic Products, Vaccines and Pharmaceuticals. Appellant No. 1 company was incorporated in the year 1992 and offered its shares to the Indian public in the very same year and immediately commenced its manufacturing activity. Appellant No. 1 had made application to the Respondent No. 2 and 3 in the year 1993 to list their shares and accordingly Respondent No. 2 and 3 Exchanges admitted the shares of the Appellant No. 1 company for dealing on the Respondent No. 2 and 3. The shares of the Appellant No. 1 company are being traded on Respondent No. 2 and 3 exchanges. The Appellant submitted that the Appellant No. 1 is at present having Authorised Capital of Rs.10,00,00,000/-divided into 1,00,00,000 equity shares of Rs.10/- each with Issued, Subscribed and Paid up Capital of Rs.8,94,00,000/-divided into 89,40,000 equity shares of Rs.10/- each.
8. The Appellants submitted that Government of India in the course of economic reforms in the year 1996 has liberalized its policy with regard to import of various good into India which included medical products resulting in import of various of Medical Diagnostic Products, Vaccines and Pharmaceuticals. This according to the appellants has adversely affected the Indian Manufacturers as the cost of equipment imported worked out cheaper when compared to that manufactured in India because of high cost of manufacture and lack of sophisticated technology. Accordingly the Appellant No. 1 to sustain in the market shifted its line of production from Medical Diagnostic Products to manufacturing of Vaccines from the year 97 onwards and therefore, the Appellant No. 2 had to infuse funds in order to bring it back onto the rails.
9. The appellants submitted that the Appellant No. 1 in its Annual General Meeting (AGM) held on 10/11/2001 passed a resolution, as required under section 81(1A) of the Companies Act, 1956 for issuing, on preferential basis, 25,00,000 equity shares of the Appellant No. 1 to the Appellant No. 2 at par i.e. @ Rs.10/- per share against the funds infused by the promoter into the Appellant No. 1 in the form of loans. A copy of the said resolution was sent to the Respondent No. 2 and 3. Subsequently the Appellant No. 1 by its separate letters dated 14/12/2001 and 13/12/2001 informed Respondent No. 2 and 3 respectively that the meeting of the Board of Directors of the Appellant No. 1 shall be held on 20/12/2001 to consider the allotment of above 25,00,000 equity shares to the Appellant No. 2. Later on the Appellant No. 1 by another letter dated 8th February, 2002 informed Respondent No. 2 and 3 that due to circumstances beyond the control of the Appellant No. 1, the meeting of the Board of Directors of the Appellant No. 1 for the aforesaid purpose was adjourned to 14/12/2002. The appellants submitted that on 14/12/2002 the aforesaid 25 lacs shares were issued and allotted to the Appellant No. 2 and the respective resolution has been passed by the Board of Directors of the Appellant No. 1 and the same was informed to the Respondent No. 3. Thereafter the Appellant No. 1 vide its letter/application dated14/3/2002 applied for listing of the said 25 lac shares to its Regional Exchange i.e. Respondent No. 3.
There is no dispute of the fact that there has been delay of 4 days in allotting the shares.
10. The Appellants submitted that, the Appellant No. 2 who acquired the said 25 lac shares through the preferential allotment, submitted report dated 22/2/2002 to the Respondent No. 1 as required under Regulation 3(4) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 seeking their approval of the acquisition of said 25 lac shares, where the fact regarding allotment of shares at the adjourned meeting held on 14/2/2002 was disclosed. According to the appellants, the Respondent No. 1 vide its letter dated 22nd April, 2002, after examining the merit, legality and validity of the issue and allotment of the said 25 lac shares to the Appellant No. 2 approved the request of the Appellant No. 2 as Respondent No. 1 did not find any violation about the issuance and allotment of the said shares to the Appellant No. 2. The contents of the letter dated 22/4/2002 of the Respondent No. 1 is reproduced below: DR. K. KOTESWAR RAO C-44, MADHURA NAGAR SR. NAGAR POST HYDERABAD - 500038.
Ref: Report filed u/r 3(4) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 - (Regulation) Acquisition of shares of TRRANSGENE BIOTECK LTD in terms of Reg.3(1)(c).
Please refer to your letter dated February 22, 2002 and other correspondence on the captioned subject.
2. On perusal of the report submitted by you, it is observed that the notice to the AGM dated November 10, 2001 did not contain specific disclosure with regard to (a) price )b) detailed changes in voting rights and shareholding pattern of Transgene Biotek Ltd., consequent to the said preferential allotment.
3. However, having regard to the fact that the disclosure has been made in the AGM notice that (a) price will be according to SEBI Preferential guidelines; (b) the allotment has been made to the promoter who had earlier given loan to the company, which are converted in to shares and there is not going to be any change in the management and the control of the company, we have, without creating any precedent, considered your submissions.
4. You are however advised to ensure that all the relevant provisions of Regulations are duly complied by you in future, as and when applicable. Any omissions/violation/delay on your part would be viewed seriously.
5. Accordingly, we advise to have taken on record the submissions made by you without creating any precedent.
11. The appellants further submitted that in or around March, 2003 the Appellant No. 1 vide their letter dated 24/3/2003 furnished the desired documents and clarifications to the Respondent No. 3.
The Respondent No. 3, vi de their letter dated 17/5/2003 to the Appellant No. 1 indicated therein that according to them there was delay of 4 days in allotment of the said 25 lac shares and it could not list the said shares unless No Objection from the Respondent No. 1was produced. In reply to the said letter the Appellant No. 1 vide their letter dated 21/5/2003 clarified that the meeting of the Board of Directors of the Appellant No. 1 held on 14/2/2002 was an adjourned meeting in continuation of the earlier meeting which was held within the stipulated period and, therefore, there have been no violation on the part of the appellants and once again the Appellant No. 1 requested the Respondent No. 3 to grant listing permission for the said 25 lac shares. It was informed to the Respondent No. 3 by the said letter that in fact Respondent No. 1 had given approval to the Appellant No. 2 for allotment of the said shares vide letter of approval dated 22nd April, 2002.
12. The appellants further submitted that since Respondent No. 2 would have required the permission of the Regional Exchange i.e. the Respondent No. 3 before considering the listing of the said 25 lac equity shares at the Respondent No. 2, the appellants awaited the response from the Respondent No. 3 before it could apply for listing at the Respondent No. 2. Accordingly thereafter the Appellant No. 1 applied for listing permission from the Respondent No. 2 vide its letter dated 3rd June, 2003. In reply the Respondent No. 2 vide its letter dated 6/6/2003 advised that "the company has not allotted the shares within a period of 3 months i.e. on or before 9/2/2002 from the date of resolution passed under Section 81(1A) of the Companies Act, 1956 and therefore, the company has not allotted the shares within the stipulated period and hence, the company is required to obtained a no objection/relaxation of SEBI with regard to validity of the resolution.
13. The appellant submitted as list of the relevant dates pertaining to various events in this connection which is annexed to the order.
14. The Appellants also relied upon certain pronouncements of the Supreme Court on this aspect of the matter as under: SRI PARMESHWARI PRASAD GUPTA ... Appellant Versus The Union of India .... Respondent "14. The agenda of the meeting of the Board of Directors held on December 23, 1953 shows that one item of business was the confirmation of the minutes of the meeting of the Board of Directors held on December 16, 1953. The confirmation of the minutes of the meeting of the Board of Directors held on December 16, 1953 would not in any way show that the Board of Directors adopted the resolution to terminate the service of the appellant passed on December 16, 1953. It only shows that the Board passed the minutes of the proceedings of the meeting held on December 16, 1953. But the resolution of the Board of Directors to confirm the action of the Chairman to terminate the services of the appellant by his telegram and letter dated December 17, 1953 would show that the Board ratified the action of the Chairman. Even if it be assumed that the telegram and the letter terminating the services of the appellant by the Chairman was in pursuance to the invalid resolution of the Board of Directors passed on December 16, 1953 to terminate his services, it would not follow that the action of the Chairman could not be ratified in a regularly convened meeting of the Board of Directors.
The point is that even assuming that the Chairman was not legally authorized to terminate the services of the appellant, he was acting on behalf of the Company in doing so, because, he purported to act in pursuance of the invalid resolution. Therefore, it was open to a regularly constituted meeting of the Board of Directors to ratify that action which, though unauthorized, was done on behalf of the Company. Ratification would always relate back to the date of the act ratified and so it must be held that the services of the appellant were validly terminated on December 17, 1953. The appellant was not entitled to the declaration as prayed for by him and the trial Court as well as the High Court was right in dismissing the claim." "That the action taken by the Registrar/Vice-Chancellor in cases where suits had already been filed or appeals preferred by them stood ratified.
7. On the basis of the above resolution, it is submitted that the action of the Registrar in filing the appeals stands ratified, hence, the plea of the respondents that the appeals are incompetent has no force. Learned counsel for the respondent submits that the Senate of the University is the main body invested with powers of entire management of the affairs of the University in accordance with the statutes, rules and regulations in force. This would also include powers to initiate legal proceedings as well. It is further submitted that under Regulation 10.2 of the Regulations of Punjab University, the Senate can delegate its function to those authorities as mentioned in the said regulation and the Registrar is not one of the authorities to whom the delegation could be made.
Therefore, it is submitted that the High Court was right in holding that the action of the registrar in filing the appeal was void and that being the position his action in filing the appeal could not be ratified. In support of the above contentions, he has relied upon the decision reported in Marathwada University v. Seshrao Balwant Rao Chavan ((1989) 3 SCC 132 : 1989 SCC (L & S) 436). This case, in our view, will not help the respondent. The Executive Council was competent to dismiss an officer of the University. On receipt of an inquiry report against the officer, the Executive Council resolved to give full power to the Vice-Chancellor to take the decision on the report. The Vice-Chancellor instead of acting on the basis of the inquiry report, appointed another inquiry officer and on the basis of the second inquiry report, dismissed the officer of the University. The Executive Council sought to ratify the action of the Vice-Chancellor in passing the order of dismissal but the Court did not accept the same mainly on two grounds, that the Vice-Chancellor could pass any order on the basis of the report supplied by the Executive Council but he could not appoint another inquiry officer and act on the basis of the second report. And secondly, the delegation of the power under the statute was subject to approval by the Chancellor which was lacking in the case, hence, the action of the Vice-Chancellor was held to be void ab initio and no amount of ratification could validate the order. The case pertains to the realm of disciplinary proceedings and dismissal of an officer of the University by the authority competent under the enactment. The case stands on a different footing. The learned counsel for the appellant places reliance upon a case reported in Jugraj Singh v. Jaswant Singh ((1970) 2 SCC 386 : AIR 1971 SC 761). In this case the act of the holder of power of attorney in transaction of sale, including presentation of the deed before the Registrar, at a time when the power of attorney did not authorise him to present the deed for registration but the act was ratified in the subsequent power of attorney. It was held that the ratification was valid and relates back to the date of original act.
8. The resolution dated 29-9-1991 is in two parts. The first part deals with the delegation of the powers to the Registrar/Vice-Chancellor authorising them to sue or file an appeal under Regulation 10.2 of the Regulations of Punjab University. The other part pertains to the suits or appeals which have already been filed by the Registrar/Vice-Chancellor that act of filing of the appeals has been ratified. The first part thus deals with delegation of the power for acts to be done in future. The other part is not delegation of power, but ratifying the action, which has already been taken by the authorities mentioned therein by act of filing the appeals. It has already been noticed that the Registrar under Section 21 of the Punjab University Act, 1947 is authorised to represent the University in all legal proceedings, except where there is a decision of the Senate to the contrary. While representing the University, in view of the provisions under Section 21 of the Punjab University Act, the Registrar would obviously be taking several steps in prosecution of the legal proceedings. The Registrar would not be totally a stranger in the matters relating to legal proceedings in the court. In this background if the Registrar filed the appeal, against the decision of the trial court, which had gone against Punjab University though strictly speaking exceeded his authority, but his action in having filed the appeals was later on ratified by the competent authority by resolution dated 29-9-1991.
The Registrar is a responsible officer of the University and has statutory powers under Section 21 of the Act to represent the University in legal proceedings. Had the Senate not ratified the act of the filing of the appeal, it would of course have been a different matter, but not thereafter. We also find no substance in the submission made on behalf of the respondent that the ratification came very late. In our view, it would not have any material bearing on the fact of ratification of the action of the Registrar in filing the appeals. The ratification has the effect of relating back to the time when the action was taken without authority. Despite the ratification by the competent authority, refusal to examine the matter on merits, would in no way serve the ends of justice. It would only be hankering to the technicalities rather than to be concerned with the intent and the substance. In view of the discussion held above, we allow the appeals and set aside the judgments passed by the High Court and appellate courts below and remand the matters to the respective first appellate courts for decision on merits. Since the appeals have become old, they shall be disposed of expeditiously. There would, however, be no order as to costs."OM PRAKASH J. C. G. Thorborg. Appellant v. Union of India and Ors. Respondents "The Delhi High Court held that Subsequent ratification relates backs to date of document ratified." 15. The learned Counsel for the Respondent made the following submissions: 16. Letter dated 22nd April, 2002 of Respondent No. 1 is addressed in response to Report filed by the Appellant No. 2 under Regulation 3(4) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 for acquisition of shares of Appellant No. 1 in terms of Regulation 3(1)(c).
17. By the said letter dated 22nd April, 2002 it is clarified that on perusal of reports submitted by Appellant No. 2, it is observed that notice to the EGM dated 10th November, 2001 did not contain specific disclosures with regards to (a) price and (b) detail changes in voting rights and shareholding pattern of Appellant No. 1 consequent to the preferential allotment. It further states that having regard to the disclosure made in the AGM notice that (a) the price will be according to SEBI Preferential Guidelines and (b) allotment is made to promoters who had earlier given loan to company and which are converted into shares, and that there is not going to be any change in the management and control of the company, Respondent No. 1 have without creating any precedent considered Appellant No. 2's submission. However, Appellant No. 2 was advised to ensure compliance of all the relevant provisions of Regulations as and when applicable and any omission violation delay would be viewed seriously. Accordingly, the submissions made by the Appellant No. 2 did not contained any application for condonation of delay.
18. The letter dated 27th November, 2003 of Respondent No. 1 is in response to Hyderabad Stock Exchange's letter dated 26th May, 2003, whereby Hyderabad Stock Exchange sought clarifications from Respondent No. 1 on listing of Appellant No. 1's shares allotted on preferential basis in the adjourned Board meeting held after expiry of three months from date of passing of special resolution. Respondent No. 1 in response vide its letter dated 27th November, 2003 clarified that the matter was examined in light of provisions of SEBI (DIP) Guidelines, 2002 and that preferential allotment was done in violation with Clause No. 13.4.1 which states that "allotment pursuant to any resolution passed at a meeting of shareholders of a [company] granting consent for preferential issue of any financial instruments, shall be completed within a period of [fifteen days] from the date of passing of the resolution." It is further submitted that the appropriate authority has noted that the factors for avoiding this violation were very much within the control of the company and it has thus violated provisions of SEBI (DIP) Guidelines as stated above. The company is therefore, advised to obtain ratification in a fresh resolution as is required by clause 13.4.3 of chapter XIII of the same Guidelines. The clause stated that If allotment of instruments and dispatch of certificates is not completed within three months from the date of such resolution, a fresh consent of the shareholders shall be obtained and the relevant date referred to in Explanation (a) in paragraph 13.1.1.1 above will relate to the new resolution.
19. In a nutshell, by letter dated 27th November, 2003 Respondent No. 1 clarified that (i) the preferential allotment was in violation of clause 13.4.1. (ii) the factors for avoiding the violation were very much within the control of Appellant No. 1 and that the Appellant No. 1 had violated the provisions of SEBI (DIP) Guidelines and (iii) Appellant No. 1 was advised to obtain ratification in fresh resolution as required under clause 13.4.3 of the said Guidelines, with clause 13.4.3 being spelled out verbatim for its correct interpretation and compliance.
20. It is submitted that the word 'ratification' cannot be read in isolation and the letter dated 27th November, 2003 has to be read in its entirety for its true meaning and contents. The Appellants have been advised ratification in fresh resolution as required under clause 13.4.3 of the said Guidelines, which inter alia requires a fresh consent of the shareholders and the relevant date will relate to the new resolution, which is also clearly spelled out by the Respondent No.1. SEBI (DIP) Regulations are framed with an objective of full disclosure of to all public issues, all offers for sale and rights issues and for protection of investors. Chapter XIII of SEBI (DIP) Guidelines deals with "Guidelines for preferential issues" and the provisions thereof are mandatory in terms of Regulation 13.0, which reads as under: Regulation 13.0 - The preferential issue of equity shares ....by listed companies whose equity share capital is listed on any stock exchange to any select group of persons under section 81(1A) of Companies Act, 1956, on private placement basis shall be governed by these Guidelines." Therefore, compliance of provisions of Chapter XIII are mandatory and cannot be condoned by Respondent No. 1 From the perusal of this letter it is clear that suggestion for ratification was given to Hyderabad Stock Exchange with a copy marked to BSE and Appellant.
21. In 2002, SEBI had on power to condone the delay. The interpretation given to the Regulation 17.2A, which came into effect pm 02.06.2003, do not apply to the fact of the case of the Appellants as admittedly the Board meeting took place on 14.02.2002 prior to the amendment.
Therefore, there is no question of granting post facto leave on the basis of the said amended Regulation. Assuming without admitting that Clause 17.2A could be applied to the case of the Appellants, according to SEBI, the case of the Appellants do not fall within the provisions of clauses (a) to (c) of the Regulation 17.2A.22. Without prejudice to the aforesaid contentions, Regulation 13.1.1 states that the issue of shares on Preferential Basis cou]ld not be made at a price not less than High of the following-(1) the average of the Weekly High Low of the closing price of the related shares quoted on the Stock Exchange during 6 months preceding the relevant date or (ii) the average of the Weekly High and Low of the closing price of the related shares quoted on the Stock Exchange during the 2 weeks preceding the relevant date.
23. The relevant date for the purpose of this Clause means - the date 30 days prior to the date on which the meeting of the General Body of the shareholders is held in terms of section 81(1A) of Companies Act, 1956, to consider the proposed issue. Therefore, for the price purpose, 30 days prior to the date on which the meeting of the General Body of the shareholders has to be taken into account, then SEBI directing the Appellants to ratify the issuance of the shares at a later date relating back to the date of the General Body Meeting would be erroneous and directing the SEBI to accept the same by this Hon'ble Tribunal, would be contrary to the provisions of law.
24. Heard both the parties. We have also perused all the documents submitted by the parties and we have applied our minds. The word 'ratification' as defined in the Black Law Dictionary 7th Edition clearly defines ratification as 'confirmation and acceptance of a previous act' thereby making the act valid from the moment it was done.
Further Law of Lexicon Dictionary also defines the word ratification as 'the adoption of a contract made on behalf of someone, who he did not authorize, which relates back to the execution of the contract and renders it, obligatory from the outset. Ratification relates back to the inception of the transaction and has to be a complete retro active efficacy.
25. On relying on these definitions we accept that 'ratification' relates back to the inception of the transaction without any change and hence the ratification done by the Appellant No. 1 of the said resolution dated 10/11/2001 on 29/12/2003 have the same effect. The Appellants have also referred to a case where the Respondent No. 1, in the matter of one M/s. Frontier Information Technologies Ltd., condoned the delay of about 30 days in the matter of allotment of shares to its promoters on preferential basis vide Respondent No. 1's letter bearing No. PM/MD/SUM//4907/00 dated 15th March, 2000 and hence the appellants pleaded that in the present case there is delay of 4 days in the allotment of shares when the Appellant No. 2 was suffering from ill health and the chief promoter undergoing bye pass surgery.
26. We have also taken into account the contents of the letter No.TO/MM/5952/02 dated April 22, 2002 of Respondent No. 1 addressed to the Appellant No. 2, the last para of which states as under: "Accordingly, we advise to have taken on record the submissions made by you without creating any precedent." 27. Word as interpreted by Court, means exactly what it says. Nothing more, nothing less. It would not be proper for this Tribunal to interpret the word Ratification as suggested by the Learned Counsel for Respondent.
28. For the reasons stated above the factors that have persuaded us to direct the respondents No. 2 and 3 to list the shares at the price as decided at the AGM dated 10/11/2001 are as follows: a) There was a delay of only four days in passing the resolution of the Board meeting.
b) Letter written by SEBI asking the company to ratify the general body meeting resolution.
c) The reason for the delay was the by-pass operation of one of the promoters.
d) SEBI itself has indirectly condoned the delay by its letter dated 22nd April, 2002.
e) The promoters have rehabilitated the company and have infused enormous amount of money.
f) No order was passed by SEBI objecting to the listing of shares to the FIIs/Promoters as per the original resolution passed on 10/11/2001.
29. In the facts and circumstances of the case, and for the reasons stated hereinbefore we direct the Respondent No. 2 and 3: (a) to list 25 lakh equity shares of appellant No. 1 company allotted to the appellant No. 2 Promoter, Dr. K. Koteshwar Rao on prefe rential basis; (a) to list 10 lakh equity shares and 10 lakh fully convertible warrants of appellant No. 1 company allotted to the FIIs i.e. M/s.
Batterymarch Financial Managements, USA, M/s. Lloyd George Investment and Management (Bermuda) Limited, Hong Kong, M/s.
Matterhorn Ventures, Mauritius and appellant No. 2 Promoter, Dr. K. Koteshwar Rao on preferential basis; as per the resolution passed at the AGM held on 10/11/2001 as expeditiously as possible and in any case not later than four weeks from the date of this order.