Delhi Bench Vacates Bar On Russell & #39;S Vst Open Offer

A division bench of the Delhi high court today vacated the single bench order against Russell Credit, barring the ITC subsidiary from giving effect to its open offer for VST Industries.

In an appeal filed against the single bench order passed earlier this week, the counsel for Russell Credit Rajeev Nayyar submitted that the petition filed by Mahavir Prasad was "highly motivated" and was an effort to favour Bright Star Investment Ltd.

A similar petition was filed by Arun Pandey in the Calcutta High Court on May 21. The matter was part heard and was posted for hearing to June 27. The petitioner was directed to make Bright Star, the only party to benefit from the stay on Russell Credit, a party to the suit.

On May 25, Mahavir Prasad's petition was filed in the Delhi High Court before Justice Vijender Singh.

Rajeev Nayyar pointed out to the division bench comprising justice Anil Dev Singh and justice O P Dwivedi that having failed to have their way in the Calcutta high court, the Delhi high court was approached.

Moreover, the petitioner Prasad, a resident of Varanasi, had no address whatsoever in Delhi. It was only mentioned "presently staying in Delhi" and had no locus standi.

The counsel for Mahavir Prasad, K R Chawla & Co submitted that under regulation 38 of the Securities and Exchange Board of India, any person could file a complaint with the Sebi. The court, however, confirmed whether the man actually existed.

On Prasad's counsel pointing out that ITC had hiked its offer price in violation of the court order, Nayyar showed the Calcutta high court order which reads, "Meanwhile, if any transactions of shares are there in consequence of letter of offer of Bright Star and Russell Credit, the same will be subject to the decision of the writ petition."

Interestingly, Nayyar pointed out that certain passages of the petitions filed in the Calcutta and Delhi high courts were identical, word by word precise to commas and fullstops.

The Division Bench on perusing the two petitions was convinced of a nexus between the two petitioners, Mahavir Prasad and Arun Pandey.

The court vacating the single bench order observed, "The subject matter of the two petitions are identical. Some of the paragraphs in the instant petition and the one filed before the Calcutta high court are identical. It appears either the petitioners who filed in the Calcutta and Delhi high courts are the same person or there is a nexus between the two. Having failed to obtain stay from the Calcutta High Court a writ petition was filed in this court. We cannot allow parties to file petitions in different courts as this will amount to forum hunting. No interim order should have been granted by the single judge....was not apprised of the Calcutta High Court situation."