Rao claimed that the Burman Family’s takeover of REL is being mishandled and that their offer undervalues REL shares. She argued that a competing offer from M/s. Danny Gaekwad Developments & Investments, Florida (Gaekwad) values REL shares at Rs. 275 per share, which is a 17% premium over the Burman family’s offer of Rs. 235 per share.
NEW DELHI: The two different benches of the Delhi High Court on Tuesday(4th Feb) refused to intervene in the conduct of the Annual General Meeting (AGM) of Religare Enterprises Limited (REL), which is set to take place on February 7.
The AGM is expected to be an important event as shareholders will vote on the Burman Family’s proposed takeover of Religare Enterprises. Two separate pleas related to the AGM were heard by the court, but no interim relief was granted in either case.
First Plea: Minority Shareholder Challenges Burman Family’s Takeover
The first plea was heard by a bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela. It involved an appeal filed by a minority shareholder, Sapna Govind Rao, who challenged a single-judge’s decision on January 30 to refuse a stay on the AGM.
Rao claimed that the Burman Family’s takeover of REL is being mishandled and that their offer undervalues REL shares. She argued that a competing offer from M/s. Danny Gaekwad Developments & Investments, Florida (Gaekwad) values REL shares at Rs. 275 per share, which is a 17% premium over the Burman family’s offer of Rs. 235 per share.
The Division Bench, however, refused to grant Rao any interim relief. Instead, it directed the Securities and Exchange Board of India (SEBI) to decide on an application filed by Gaekwad at the earliest. Gaekwad had filed an intervention plea in the case before the High Court. The court stated:
“We direct SEBI to decide the application dated February 1 filed by the intervenor (Gaekwad) within the shortest possible time. It is further directed that the public offer process shall be subject to the outcome of this appeal. This order is being passed without prejudice to the rights of the party.”
Second Plea: Dr. Rashmi Saluja Challenges Her Removal
The second plea was heard by Justice Purushaindra Kumar Kaurav. This case was filed by Dr. Rashmi Saluja, the current Executive Chairperson of Religare, who challenged a proposed resolution at the upcoming 40th AGM.
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The resolution seeks to appoint a new director in her place, which could lead to her removal from the position. Dr. Saluja argued that the resolution is illegal, violates the Companies Act 2013, and contravenes a Reserve Bank of India (RBI) directive issued on December 9, 2024, which prohibits changes in REL’s management.
Dr. Saluja contended that her current term extends until February 25, 2028, and that her fixed-term appointment under Section 196 of the Companies Act exempts her from retirement by rotation under Section 152(6). She sought a declaration that she is not liable to retire by rotation and that the proposed resolution is illegal. Additionally, she requested permanent injunctions to prevent her removal and to stop the resolution from being voted on at the AGM.
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However, the court declined to grant any interim relief, stating that Dr. Saluja had not made out a prima facie case for an interim injunction. The court observed:
“When the monetary value of a claim can be determined, there can be no irreparable value. If the plaintiff (Saluja) succeeds in the civil suit, the plaintiff can be compensated monetarily. However, if the interim injunction is granted and the plaintiff cannot prove her case, she would have held the position without being eligible to hold the same. The plaintiff has failed to establish a prima facie case in her favour for the grant of an interim injunction.”
Represented By Counsels:
- Dr. Rashmi Saluja was represented by Senior Advocate Sandeep Sethi.
- Sapna Govind Rao (minority shareholder) was represented by Senior Advocate CA Sundaram.
- Gaekwad was represented by Senior Advocate Rajeev Nayyar.
- The respondents were represented by Senior Advocates AM Singhvi, Mahesh Jethmalani, Nalin Kohli, Neeraj Malhotra, and Abhimanyu Bhandari.
