The Securities Appellate Tribunal upheld the strict 15-working-day deadline for a competing offer under SEBI’s SAST Regulations, rejecting the appellant’s plea for exemption and clarifying that Regulation 11(1) does not relax procedural timelines.
Background & Facts
The Dispute
The appellant, Digvijay Laxhamsinh Gaekwad (also known as Danny Gaekwad), acting through a power of attorney for Mr. Surya Pratap Singh Rana, sought to make a competing open offer for Religare Enterprises Limited (REL), an NBFC listed on BSE and NSE. The respondent group comprised SEBI and four private limited companies that together held 21.54% of REL’s equity and were in the process of acquiring an additional 5.27% to cross the 25% threshold, thereby triggering an open-offer obligation under Regulation 3(1) of the SAST Regulations.
Key Facts
- 25 Sep 2023: Burman Group (the first acquirer) made a public announcement under Regulation 13(1) to acquire 9,00,42,541 shares (26% of REL).
- 03-04 Oct 2023: Burman Group issued the Detailed Public Statement (DPS) required by Regulation 13(4).
- 10-11 Oct 2023: Draft Letter of Offer filed with SEBI under Regulation 16(1); SEBI approved the offer in Dec 2024 after RBI’s fit-and-proper certificate.
- 18 Jan 2025: Burman Group dispatched the Letter of Offer to shareholders (Regulation 18(2)).
- 23 Jan 2025: Advertisement of the Letter of Offer under Regulation 18(7).
- 24 Jan 2025 & 26 Jan 2025: Gaekwad sent letters to SEBI requesting permission to submit a competing offer.
- 1 Feb 2025: Gaekwad filed an exemption application under Regulation 20(1) and 20(5).
- 7 Feb 2025: Supreme Court ordered the appellant to deposit ₹600 crores by 12 Feb 2025.
- 12 Feb 2025: Supreme Court extended the deposit deadline to 13 Feb 2025.
- 13 Feb 2025: Deadline for deposit (not complied).
- 14 Feb 2025: SEBI hearing; appellant absent; SEBI rejected the exemption application and passed the impugned order.
- 19 Aug 2026: SAT delivered the present judgment dismissing the appeal.
Procedural History
- Appeal No. 133 of 2025 filed under Section 15T of the SEBI Act to set aside SEBI’s order dated 14 Feb 2025.
- Misc. Applications Nos. 295, 408 and 1079 of 2025 were listed alongside the appeal.
- 19 Aug 2026: Tribunal hearing; arguments presented by counsel for both sides.
- 19 Aug 2026: Tribunal order dismissing the appeal.
Relief Sought
The appellant sought exemption from the strict enforcement of Regulation 20(1) and Regulation 20(5) of the SAST Regulations, contending that the 15-day period should commence from the date of the Letter of Offer (18 Jan 2025) or its advertisement (23 Jan 2025), and that Regulation 11(1) permitted such relaxation.
The Legal Issue
Whether the Securities Appellate Tribunal can grant exemption from the mandatory 15-working-day deadline prescribed in Regulation 20(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, and whether Regulation 11(1) can be invoked to relax that deadline for a competing acquirer.
Arguments Presented
For the Appellant
- Asserted that the “Detailed Public Statement” referred to in Regulation 20(1) should be interpreted as the date of the Letter of Offer (18 Jan 2025) or its advertisement (23 Jan 2025), thereby giving the appellant a later deadline.
- Contended that a purposive construction of the regulation was necessary to avoid unfair discrimination against a later-entering bidder.
- Maintained that Regulation 11(1) provides a blanket exemption that can cover procedural timelines, not merely the obligation to make an open offer.
- Emphasised that the Supreme Court had directed a deposit of ₹600 crores, indicating a willingness to accommodate the appellant’s participation.
For the Respondent
- Stated that the plain language of Regulation 20(1) mandates a 15-working-day period from the date of the Detailed Public Statement made by the first acquirer, which was 04 Oct 2023.
- Explained that Regulation 11(1) is limited to exemption from the obligation to make an open offer and does not affect the timelines prescribed in Regulation 20.
- Highlighted the appellant’s failure to make a public announcement within the statutory period and his non-compliance with the Supreme Court’s deposit order.
- Argued that allowing a flexible start date would undermine the equal-treatment principle enshrined in the Regulations.
The Court's Analysis
The Tribunal began by emphasizing that the SAST Regulations are statutory instruments laid before Parliament and must be given their literal meaning unless ambiguity exists. It noted that Regulation 20(1) expressly states:
"Competing offers. 20.(1) Upon a public announcement of an open offer for acquiring shares of a target company being made, any person, other than the acquirer who has made such public announcement, shall be entitled to make a public announcement of an open offer within fifteen working days of the date of the detailed public statement made by the acquirer who has made the first public announcement." The Tribunal rejected the appellant’s purposive interpretation, observing that the phrase “detailed public statement” has a specific technical meaning under Regulation 13(4) and was satisfied on 04 Oct 2023. The subsequent Letter of Offer dated 18 Jan 2025 is a separate step under Regulation 18(2) and cannot be read back as the DPS.
The Tribunal further examined Regulation 11(1), which it held is confined to relieving an acquirer from the obligation to make an open offer. It does not, and cannot, dispense with the procedural timelines that apply to a competing offer, which are governed by Regulation 20(8). The appellant’s reliance on Regulation 11(1) was therefore misplaced.
The Tribunal also considered the appellant’s failure to deposit the ₹600 crores as ordered by the Supreme Court. It reiterated that non-deposit automatically vacates the Supreme Court’s direction, rendering any subsequent relief moot. The appellant’s argument that the delay was due to RBI’s procedural formalities was rejected because the appellant had not sought a formal extension from the Court.
In sum, the Tribunal found no merit in the exemption application, affirmed the literal construction of the Regulations, and underscored the principle of equal treatment for all bidders.
The Verdict
The appeal is dismissed. The appellant’s application for exemption from Regulation 20(1) and Regulation 20(5) is rejected. No costs are awarded. All pending interlocutory applications, if any, stand disposed of.
What This Means For Similar Cases
Strict 15-Day Deadline Applies
- Competing acquirers must issue a public announcement of their open offer within 15 working days of the first acquirer’s Detailed Public Statement, not from the Letter of Offer or its advertisement.
- Any deviation from this timeline will be treated as non-compliance and can lead to dismissal of exemption pleas.
Regulation 11(1) Cannot Relax Timelines
- The exemption provision under Regulation 11(1) is limited to waiving the obligation to make an open offer; it does not extend to procedural deadlines in Regulation 20.
- Practitioners must advise clients that seeking relief under Regulation 11(1) will not shield them from the 15-day rule.
Non-Compliance with Supreme Court Directions Is Fatal
- Failure to comply with a Supreme Court order (e.g., deposit of funds) automatically vacates the order and renders any subsequent proceedings infructuous.
- Prompt compliance and, where necessary, formal applications for extension are essential to preserve rights.
