Order in the matter of acquisition of shares of Horizon Infrastructure Limited

Under sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 read with regulation 44 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and regulations 32(1)(f) and 35(2)(a) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 in respect of (1) Ms. Akshita Nikhil Gandhi, (2) Mr. Ansh Bhavesh Gandhi, (3) Ms. Priyanka Nikhil Gandhi and (4) Ms. Anushka Bhavesh Gandhi

In the matter of acquisition of shares of Horizon Infrastructure Limited

1. Horizon Infrastructure Limited (hereinafter referred as “HIL”) is a company incorporated under the Companies Act, 1956. Its shares listed on the Calcutta Stock Exchange (“CSE”) and National Stock Exchange (“NSE”) since 1983 and 1996, respectively. Its scrip was suspended from trading from March 08, 2000 to January 24, 2008 on account of non-compliance with the listing agreement. The scrip recommenced trading on NSE from January 25, 2008 at the base price of ₹ 68.55. The price of the scrip rose to ₹1951.65 on May 05, 2008. In view of the same, Securities and Exchange Board of India (“SEBI”) conducted investigation into the matter.

2. During the investigation, it was inter alia observed that Ms. Akshita Nikhil Gandhi, Mr. Ansh Bhavesh Gandhi, Ms. Priyanka Nikhil Gandhi and Ms. Anushka Bhavesh Gandhi were part of promoter group of HIL. Further, a company viz; Awaita Properties Limited (“APPL”), promoted by Mr. Bhavesh Gandhi and Mr. Nikhil Gandhi was also part of promoter group of HIL. However, in the shareholding pattern of HIL for quarter ending June 30, 1998 till March 31, 2008, APPL was incorrectly shown in the public shareholders' category. The investigation observed following discrepancy with regard to disclosure of HIL's promoter and promoter group shareholding as disclosed to the stock exchanges vis-vis their actual shareholding:

ACTUAL SHAREHOLDING SHORTFALL IN SHAREHOLDING AS DISCLOSED arrived at after including APPL in P&PG P&PG to stock exchanges category SHAREHOLDING SHARE-due to inclusion of HOLDING P&PG Public Total P&PG Public Total APPL in Public -for QE -category No. of No. of No. of No. of No. of No. of No. of % % % % % % % shares shares shares shares shares shares shares

In the matter of acquisition of shares of Horizon Infrastructure Limited

ACTUAL SHAREHOLDING SHORTFALL IN SHAREHOLDING AS DISCLOSED arrived at after including APPL in P&PG P&PG to stock exchanges category SHAREHOLDING SHARE-due to inclusion of HOLDING P&PG Public Total P&PG Public Total APPL in Public -for QE -category No. of No. of No. of No. of No. of No. of No. of % % % % % % % shares shares shares shares shares shares shares 30-Jun-98 - 56,05,500 52.19 51,34,500 47.81 1,07,40,000 100 59,05,500 54.99 48,34,500 45.01 1,07,40,000 100 3,00,000 2.79 30-Sep-98 31-Dec-98 56,05,500 52.19 51,34,500 47.81 1,07,40,000 100 59,05,500 54.99 48,34,500 45.01 1,07,40,000 100 3,00,000 2.79 31-Mar-99 - 56,42,000 52.53 50,98,000 47.47 1,07,40,000 100 59,42,000 55.33 47,98,000 44.67 1,07,40,000 100 3,00,000 2.79 31-Dec-07 31-Mar-08 59,43,509 55.34 47,96,491 44.66 1,07,40,000 100 59,43,509 55.34 47,96,491 44.66 1,07,40,000 100 0 0

3. It was noted that for the quarter ending March 31, 2008, the actual shareholding of the promoter and promoter group in HIL was 55.34%. On January 16, 2008, when Ms. Akshita Nikhil Gandhi, Mr. Ansh Bhavesh Gandhi, Ms. Priyanka Nikhil Gandhi and Ms. Anushka Bhavesh Gandhi made off-market purchases of 65,300 shares, 49,650 shares, 34,000 shares and 49,050 shares respectively, aggregating to 1,98,000 shares of HIL.

4. Since the promoter and promoter group of HIL breached the 55% threshold prescribed in regulation 11(2) and did not make requisite public announcement under regulation 11(2) read with regulation 14(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as “Takeover Regulations, 1997”) before making these acquisitions a Notice to Show Cause (“SCN”) dated October 01, 2013 was issued to Ms. Akshita Nikhil Gandhi, Mr. Ansh Bhavesh Gandhi ,Ms. Priyanka Nikhil Gandhi and Ms. Anushka Bhavesh Gandhi ( hereinafter referred to as "the Noticees") calling upon them to show cause as to why suitable directions under section 11B of the SEBI Act, read with regulation 32(1)(f) and 35(2)(a) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as “Takeover Regulations, 2011”) should not be issued against them for the alleged violation of the provisions of regulation 11(2) read with regulation 14(1) of the Takeover Regulations, 1997.

5. Vide letter dated December 23, 2013, Mrs. Neha Nikhil Gandhi, mother of Ms. Priyanka N. Gandhi and Ms. Akshita N. Gandhi, and aunt of Mr. Ansh B. Gandhi and Ms. Anushka B. Gandhi, submitted a common reply to the SCN on behalf of all the four Noticees. The opportunity for personal hearing was given to the Noticees on May 13, 2014 when Mr. Rohan Rajadhyaksha, Advocate of the Noticees appeared on their behalf and made oral submissions. It was inter alia submitted that pursuant to a scheme of amalgamation of SKIL Infrastructure Limited (“SKIL”), Horizon Country Wide Logistics Limited (“HCWLL”) and Fastlane Distriparks & Logistics Limited (“FDLL”) with HIL, SKIL, HCWLL and FDLL stood dissolved with effect from September 28, 2013. Consequently, HIL is presently known as SKIL. With effect from January 22, 2014, the Registrar of Companies sanctioned the change of name of HIL to SKIL Infrastructure Limited vide a fresh Certificate of Incorporation. On May 08, 2014, further issuance of equity shares of SKIL was listed and SKIL got trading approval from NSE with effect from May 09, 2014. Vide their letter dated August 01, 2014, SKIL filed submissions of the Noticees.

Another opportunity of personal hearing was granted to the Noticees on August 05, 2014 when their authorised representatives appeared and made further submissions. Advocates of the Noticees also their written submissions vide their letter dated February 09, 2015. Submissions of the Noticees are, inter alia, as follows: i. The equity shares of HIL were not listed on any stock exchange and were suspended from trading from March 08, 2000 to January 24, 2008 when the impugned transactions were undertaken in 2007-2008. Therefore, the rules and Regulations framed by SEBI were not applicable to them on account of the scrip being suspended and hence not traded. ii. The SCN dated October 01, 2013 alleges violation of regulation 11(2) of the Takeover Regulations, 1997 but is issued under regulation 32(1)(f) and 35(2)(a) of the Takeover Regulations, 2011. Regulation 35(2) (a) of the Takeover Regulations, 2011 does not apply in this case since no show cause notice was issued under the Takeover Regulations, 1997 and pending when the Takeover Regulations, 2011 came into force. Regulation 35(2)(a) of the Takeover Regulations, 2011 does not protect the present SCN as it was not issued under the Takeover Regulations, 1997. The alleged acquisitions had taken place when the Takeover Regulations, 1997 were in force.

Accordingly, the SCN, in this case, should have been issued under the Takeover Regulations, 1997. On this ground alone, the SCN is vitiated and no action can be taken pursuant to thereto. iii. During the period March 08, 2000 to January 24, 2008, the trading in the shares of HIL was suspended. The alleged acquisitions had taken place prior to the removal of the suspension of trading. iv. It is admitted fact that APPL was a company belonging to the promoters. It is submitted that the NSE web site, for the quarter ended December 31, 2007, displayed the promoters' group shareholding of HIL as 52.53%. The Noticees acquired the shares acquisitions in question were made by the Noticees under the belief that the promoters' shareholding in HIL as on January 16,2008 was 52.53% i.e. less than 55% limit specified under regulation 11(2) of the Takeover Regulations,1997. The error was bona fide in view of the fact that the shares of HIL were not being traded for 8 years prior to the alleged acquisitions and that also that the Noticee had given prior notice of the same to the stock exchange as specified under the said Regulations.

The bona fide belief is further strengthened by the fact that taking into account the disclosed promoters' shareholding, the Noticees never wanted to cross the 55% limit, since after the alleged acquisitions their shareholding reached only to 54.37% from the disclosed 52.53%. Even if the shareholding of AAPL is also included then the increase in the promoters' shareholding, beyond 55% prescribed threshold, is merely 0.34%. v. The beneficial interests in 1,25,000 equity shares entered in the name of Mr. Bhavesh Gandhi and Mr. Nikhil Gandhi, each were held by the Horizon Employees Welfare Trust (hereinafter referred to as “Trust”) with effect from July 23, 2007. The Trust formally came into existence on February 01, 2008. The said 2,50,000 equity shares were transferred to the Trust by way of inter depository transfer delivery/receipt instructions and no consideration was received for the same, since the transfer of the said shares was for the welfare of the employees. vi. On May 29, 2008 and May 30, 2008, Mr. Bhavesh Gandhi and Mr. Nikhil Gandhi respectively, had made requisite declaration as per section 187C(3) of the Companies Act, 1956 specifying that the Trust holds beneficial interest in 125, 000 equity shares, each held by them and said shares were transferred to the Trust by the way of inter depository transfer.

The equity shares held by the Trust cannot be considered as part of the promoter or promoter group. vii. At the time of the alleged acquisitions on January 16, 2008, three out of the four Noticees were minors and no liability could be cast upon them for any alleged breach. Issuing the SCN itself is, therefore, bad in law. In this regard, the Noticees have relied upon the judgment of the Hon'ble Supreme Court of India in the matter of Ritesh Agarwal and Another Vs SEBI ( 2008)8 SCC 205. viii. The learned authorised representative of the Noticee further contended during hearing that that even if the breach is found in this case the same could be venial and technical considering the fact that the acquires were already part of the promoter group and that the breach was merely with regard to 0.34% shareholding. He further submitted that since pursuant to the scheme of amalgamation approved by the Hon'ble High Court of Bombay vide order dated September 23, 2013 many companies have merged with HIL and the resultant company is now known as SKIL, the shareholding pool in the transferee company is different than that of HIL.

The direction to make public announcement has to be made in order to give exit opportunity to the shareholders of the concerned target company. In this case, the target company itself does not exist and the shareholding pool has also changed no such direction will be possible. He further submitted that post amalgamation, the promoters' shareholding in the SKIL is 74.58% and there is no headroom for further acquisition pursuant to a public announcement. He, therefore, requested that the SCN may be dispose of without any direction to the Noticees. 6. I have considered the SCN, the oral and the written submissions made on behalf of the Noticees. In this case the limited question before me is to deal with the allegations in the SCN and determine as to whether the Noticees have contravened the provisions of regulation 11(2) of the Takeover Regulations, 1997 and if yes, then whether enforcement action contemplated in the SCN should be taken against them. Before dealing with the merits of the case, I proceed to deal with the preliminary objections raised by the Noticees. The first contention of the Noticees in this regard is that the Takeover Regulations will not apply in the present case, since the trading in its shares were suspended when the Noticees acquired 1.84% shares of HIL as described in the SCN.

In this regard, it is noted that the Takeover Regulations apply in case of acquisition of shares beyond prescribed threshold, acquisition of voting rights or control in a 'target company'. It is admitted position that at the relevant time the Takeover Regulations, 1997 were in force. In terms of regulation 2(1)(o) of the Takeover Regulations, 1997 the 'target company' means a listed company whose share or voting right or control is directly or indirectly acquired or is being acquired. It is not relevant for the purpose of applicability of the Takeover Regulations, 1997, that the shares acquired in a listed company should be traded on the stock exchange. What is relevant is that the company should be a listed company. In the instant case, when the acquisitions in question took place, HIL was a listed company even though trading in its shares was suspended. I, therefore, find that the Takeover Regulations, 1997 will apply to the acquisitions in question and reject the contentions of the Noticees in this regard.

7. The second preliminary objection of the Noticees is that the SCN is vitiated on account of wrong provisions invoked therein with regard to saving of probable obligations incurred under the Takeover Regulations, 1997. I note that, admittedly, the acquisitions were made by the Noticees on January 16, 2008 when the Takeover Regulations, 1997 were in force. When the SCN was issued on October 01, 2013, the Takeover Regulations, 1997( since repealed) were not in force and Takeover Regulations, 2011 had come into force. It has been alleged in the SCN that the Noticee violated the provisions of regulation 11(2) of the Takeover Regulations, 1997 since their acquisition breached the 55% limit specified therein and on this basis the SCN has called upon the Noticees to show cause as to why directions under section 11B of the SEBI Act read with regulation 32(1)(f) and 35(2)(a) of the Takeover Regulations, 2011 should not be issued against them. In order to deal with submissions of the Noticees, I deem it necessary to refer to the provisions of regulation 11(2) of the Takeover Regulations, 1997 as it existed at the time of acquisitions in this case and provisions of regulation 35 of the Takeover Regulations, 2011. The said provisions read as follows: - Takeover Regulations, 1997 " Consolidation of holdings 11. (2) No acquirer, who together with persons acting in concert with him holds, fifty five per cent. (55%) or more but less than seventy five per cent. (75%) of the of the shares or voting rights in a target company, shall acquire either by himself or through persons acting in concert with him any additional shares or voting rights therein, unless he makes a public announcement to acquire shares in accordance with these Regulations:

Provided that in a case where the target company had obtained listing of its shares by making an offer of at least ten per cent. (10%) of issue size to the public in terms of clause (b) of sub-rule (2) of rule 19 of the Securities Contracts (Regulation) Rules, 1957, or in terms of any relaxation granted from strict enforcement of the said rule, this sub-regulation shall apply as if for the words and figures 'seventy five per cent. (75%)', the words and figures 'ninety per cent. (90%)' were substituted." Takeover Regulations, 2011 “Repeal and Savings 35.(1) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, stand repealed from the date on which these Regulations come into force. (2) Notwithstanding such repeal,— (a) anything done or any action taken or purported to have been done or taken including comments on any letter of offer, exemption granted by the Board, fees collected, any adjudication, enquiry or investigation commenced or show-cause notice issued under the repealed Regulations, prior to such repeal, shall be deemed to have been done or taken under the corresponding provisions of these Regulations; (b) the previous operation of the repealed regulations or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the repealed regulations, any penalty, forfeiture or punishment incurred in respect of any offence committed against the repealed regulations, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, shall remain unaffected as if the repealed regulations has never been repealed; (c) any open offer for which a public announcement has been made under the repealed regulations shall be required to be continued and completed under the repealed regulations.” 8. In terms of regulation 11(2), an acquirer, holding 55% or more but less than 75% shares or voting rights in the target company could acquire any additional shares or voting rights therein only by way of an open offer by making a public announcement in accordance with the Takeover Regulations, 1997. In terms of regulation 14 of the Takeover Regulations, 1997 such public announcement has to be made not later than four working days of entering into agreement for acquisition of shares or deciding to acquire shares exceeding the respective percentage specified in regulation 11(2).

In this case, if the acquisition in question was to increase the promoters' shareholders in HIL beyond threshold prescribed in regulation 11(2) of the Takeover Regulations, 1997, the Noticee had triggered the obligation to make the public announcement within four working days from the date they agreed to acquire equity shares in the off market transaction. Thus, in this case, the possible public announcement, if any, had to be made when the Takeover Regulations, 1997 were in force. 9. I have examined the provisions of regulation 35(2)(a) of the Takeover Regulations, 2011 and note that this regulation 35(2)(a) saves anything done or any action taken or purported to have been done or taken including comments on any letter of offer, exemption granted by the Board, fees collected, any adjudication, enquiry or investigation commenced or show-cause notice issued under the repealed regulations. In this case, none of the matters contemplated under regulation 35(2)(a) was pending when the Takeover Regulations, 2011 came into force and which could be saved under this regulation 35(2)(a). The alleged acquisitions had taken place when the Takeover Regulations, 1997 were in force and the charge in this case is violation of regulation 11(2) of the Takeover Regulations.

The SCN in this case is obviously with regard to an obligation/ liability alleged to have incurred under the Takeover Regulations, 1997 and thus the saving provisions regulation 35(2)(b) of the Takeover Regulations, 2011 would apply in this case. To this extent, I find merit in submissions of the Noticees that the SCN has referred to a wrong saving provision. I, however, note that it is settled position of law that mentioning of a wrong provision or the omission to mention the provision which contains the source of power will not invalidate the order if the source of such power can be traced to a different provision. In this regard it is relevant to mention the judgement of Hon'ble Supreme Court in the matter of Collector of Central Excise Calcutta Vs. Pradyumna Steel Ltd. 1996982) E.L.T. 441 (S.C.), wherein it held that 'mere mention of a wrong provision of law when the power exercised is available even though under a different provision is by itself not sufficient to invalidate the exercise of that power.' 10. In this case, the provisions of regulation 35(2)(b) of the Takeover Regulations, 2011 clearly save the obligation/ liability incurred under the repealed Takeover Regulations, 1997 and provide that such obligation/ liability shall remain unaffected as if the repealed regulations has never been repealed.

In other words, such obligation/ liability has to be enforced under the Takeover Regulations, 1997 read with SEBI Act. I, therefore, find that the proceedings initiated by the SCN, in this case, is not vitiated because it refers to the saving provision of regulation 35(2)(a) and not the applicable saving clause provided in regulation 35(2) (b). 11. I further note that, in this case, there is no quarrel as to the charging provision i.e. regulation 11(2) of the Takeover Regulations, 1997 and power to issue directions under section 11B of the SEBI Act. It is also settled position that the power to issue direction under section 11B is of wide amplitude and is co-extensive with the duty of investor protection under section 11 of the SEBI Act. With regard to violations of the provisions of the Takeover Regulations, 1997 the possible directions and actions are listed in regulation 44 and 45 thereof. Thus, the source of power to enforce the obligation/ liability under regulation 11(2) of the Takeover Regulations, 1997 exists in these provisions of the SEBI Act and Takeover Regulations, 1997. In this connection, it is relevant to mention the judgement of Hon'ble Supreme Court in the matter of Union of India Vs. Tulsiram Patel (1985) SUPP.

2 SCR,266 wherein it was held that the exercise of the power is always referable to the source of such power and must be considered in conjunction with it. If a source of power exists by reading together two provisions and the order refers to only one of them, the validity of the order should be upheld by construing it as an order passed under both the provisions. I, therefore, am of the view that though the SCN refers to only provisions of section 11B of the SEBI

Act, the SCN in this case can be considered and decided by passing an order under section 11B of the SEBI Act and regulations 44 and 45 of the Takeover Regulations, 1997. 12. Having dealt with the preliminary objections of the Noticee, I now proceed to deal with the merits of the case. In this case, there is no dispute as to the fact that four Noticees collectively acquired 1,98,000 shares of HIL on January 16, 2008. It is admitted fact that Noticees are part of promoters' group of HIL. The Noticees have further admitted that AAPL was one of the promoters of HIL. In terms of the applicable regulation and Listing Agreement it is the obligation of the concerned company to make correct disclosures of its shareholding to the stock exchange which in-turn is displayed by the stock exchange on its website. Further, under the Takeover Regulations, it is the obligation of the promoters to make requisite disclosures of their sales or purchases. Applicability of regulation 11(2) does not depend on compliance of these requirements as they prescribe additional compliance obligations. The status of AAPL remains as promoter even if its shareholding was not disclosed or wrongly disclosed as the case may be.

I, therefore, am of the view that the wrong disclosure of promoters' shareholding to the stock exchange or compliance, if any, of disclosure obligations with regard to purchase of shares by the Noticees cannot be reason to hold that regulation 11(2) will not apply, if the promoters' shareholding increases beyond 55% threshold. 13. It is noted that APPL was a promoter group company of HIL since 1994. However, in its shareholding pattern disclosed to the stock exchange, APPL was shown in the public shareholder category till the quarter ended December 31, 2007. It is only in the quarter ended March 31, 2008 i.e. after the acquisitions in question that it was disclosed in the promoters' category. Admittedly, AAPL is a company promoted by its two promoters namely, Mr. Bhavesh Gandhi and Mr. Nikhil Gandhi. It is relevant to mention here that at the relevant time Mr. Bhavesh Gandhi and Mr. Nikhil Gandhi, the respective fathers of the Noticees were also the directors of HIL. Thus, the Noticees alongwith their respective fathers were at the relevant time in control of HIL along with other promoters.

Further, being relatives of the Noticees, Mr. Bhavesh Gandhi and Mr. Nikhil Gandhi are also persons acting in concert (PACs) with them with regard to the acquisitions in question. Considering these facts, I am of the view that the promoters of HIL cannot feign ignorance of the fact that shareholding of AAPL would also be reckoned for considering the limit of specified 55% under regulation 11(2). 14. It is settled position that the regulations are triggered by acquisition of shares and the obligation under regulation 11 of the Takeover Regulations, 1997 has to be reckoned on the date of acquisition. It is noted that, in this case, the Trust had come into existence on February 01, 2008 i.e. prior to the acquisition on January 16, 2008. On this ground alone, I do not agree with the contention of the Noticees regarding excluding the shares/voting rights of Mr. Bhavesh Gandhi and Nikhil Gandhi from the promoters shareholding/voting rights. I further note from the declaration submitted by Mr. Bhavesh Gandhi and Nikhil Gandhi as per section 187C(3) of the Companies Act, 1956, it is noted that they have disclosed that specifying that the beneficial interest in 1,25,000 equity shares each held by them is vested in the Horizon Employees Welfare Trust.

In this regard, it is pertinent to mention that for the purpose of applicability of Takeover Regulations, 1997 the acquisition of shares entitling voting rights is important. If pursuant to any increase the voting rights of the acquires increases beyond the specified threshold, the Takeover Regulations,1997 shall apply irrespective of the fact that some of the shares of the promoters are held for Trust. It is also relevant to mention that in terms of the Press Note dated 25 June, 1957 issued by the Department of Company Law Administration under section 153 of the Companies Act, the shares being the property of the Trust can be held in the name of its Trustees who are individuals/legal persons. Thus, the voting rights with regard to the 2,50,000 equity shares in respect of which the beneficial interest is held by Trust in this case, remains with Mr. Bhavesh Gandhi and Nikhil Gandhi. Therefore, their shareholding held in Trust cannot be excluded while computing the voting rights of the promoter and promoter group in HIL. 15. From the facts described in the SCN it is noted that during the quarter ended December 1998, actual shareholding of the promoters' in HIL was 54.99%.

During the period 31st March 1999 to December 31, 2007 their shareholding in HIL was 55.33%. From the material available on record it is noted that the promoters' shareholding in HIL had crossed 55% during the period 1st January 1999 to March 31st, 1999. At that time prescribed threshold was 75%. In this case, the acquisitions of 1,98,000 shares collectively by the Noticees on January 16, 2008 breached the prescribed threshold of 55% under regulation 11(2). Thus, the acquisitions in question breached the provisions of regulation 11(2) as on January 16, 2008. It is also relevant to mention here that the obligation of the acquires and PACs under regulation 11(2) is joint and several. However, it is noted that while the SCN takes into account the collective holding of all promoters it has not been issued to other promoters viz; Mr. Bhavesh Gandhi and Mr. Nikhil Gandhi (related to the Noticees) and AAPL, (a company promoted by the respective fathers of the Noticees). 16. I further note that at the time of the acquisitions in questions, Mr. Akshita Nikhil Gandhi (date of birth 18.04.1988) was major and Mr. Ansh Bhavesh Gandhi (date of birth 02.11.1997), Ms. Priyanka Nikhil Gandhi (date of birth 10.04.1990) and Ms. Anushka Bhavesh Gandhi (date of birth 07.07.1995) were minors.

Relying upon the judgment of Hon'ble Supreme Court of India in the matter of Ritesh Agarwal and Another v. SEBI ([2008] 84 SCL 373 (SC) it has been contended by the Noticees that the present proceedings cannot be proceeded for enforcement action as contemplated in the SCN. I have perused the said judgment and note that in that case Hon'ble Supreme Court held as under:

“As they were minors having regard to the provisions of the Indian Contract Act, they could not have been proceeded against strictly in terms of the provisions of the said Act. Apart from the actions taken by the Board, the persons who undertook those fraudulent actions may also be held to be guilty of making a mis-representation and commission of fraud not only before the prospective purchasers of the shares but also before the statutory authority. The same, however, would itself not mean that a minor would not be penalized for entering into a contract which per se was not enforceable. A contract must be entered into by a person who can make a promise or make an offer. If he cannot make an offer or in his favour an offer cannot be made, the contract would be void as an agreement which is not (sic) enforceable in law would be void. Section 11 of the Indian Contract Act provides that the person who is competent to contract must be of the age of majority.” 17. I note that in the above case, the Hon'ble Supreme Court has settled that the minors cannot be proceeded against as they do not have capacity to make a promise or make an offer as a minor's agreement is not enforceable in law and is void ab inito.

I note that in that case, one Mr. S alongwith his wife and two minor sons and two other promoters had committed fraud with regard to a public issue of a company named RPL. SEBI had taken action against all of them including the two minors. Hon'ble Supreme Court held that the minors who cannot enter into a contract they cannot be party to a fraud and thus, they cannot be subjected to penalty. The person, who committed the fraud in their names i.e. Mr. S, should have been proceeded against not only for the commission of act of fraud on his own behalf but also on behalf of the minors. In the present case, however, there is no allegation that the respective fathers of the minor Noticees acquired the shares on their behalf nor does the SCN even makes any reference as to whether the respective fathers aided, in whatsoever manner, the acquisitions of the minors. It is further noted that though one of the Noticees was major at the time of her acquisition, the other promoters' have not been issued the SCN. Thus, the three minor Noticees cannot be directed to acquire further shares consequent to their transactions.

18. I further note that pursuant to the scheme of amalgamation approved by the Hon'ble High Court of Bombay vide order dated September 23, 2013 many companies have merged with HIL and the resultant company is now known as SKIL. Consequently, the shareholding pool in the transferee company is different from that of HIL. 19. Considering these peculiar facts and circumstances of this case, I find that direction to make the open offer in respect of the three minors cannot be issued. At the same time, the Noticees cannot be allowed to enjoy the benefits of their consolidation pursuant to acquisitions which were in breach of provisions of regulation 11(2) of the Takeover Regulations, 1997. I have also taken note of the fact that all requisite disclosures with regard to the acquisitions were made as per requirements.

20. In view of the above facts and circumstances and mitigating factors, I am satisfied that a direction to the Noticees to sell that number of shares of SKIL held by them which represent 1,98, 000 shares acquired by them in HIL and transfer the entire proceeds of such sale of shares to the Investor Protection and Education Fund established under the Securities and Exchange Board of India (Investor Protection and Education Fund) Regulations, 2009 would be feasible as well as commensurate with the violation as found in this case. 21. I, therefore, in exercise of powers conferred upon me under sections 19, 11 and 11B of the SEBI Act, 1992 and regulations 44 and 45 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 read with regulation 32(1)(h) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, hereby issue following directions to the Noticees,viz; Ms. Akshita Nikhil Gandhi, Mr. Ansh Bhavesh Gandhi ,Ms. Priyanka Nikhil Gandhi and Ms. Anushka Bhavesh Gandhi :- i. The Noticees shall, jointly and severally, disinvest that number of shares of SKIL Infrastructure Limited SKIL held by them which represent 1,98, 000 shares acquired by them in HIL; ii. The Noticees shall divest the shares as aforesaid through sale to parties not connected/ related to them in small lots in trenches on the BSE and NSE ensuring that such sale does not disturb the market equilibrium; iii. The Noticees shall transfer of the entire proceeds of such sale of shares to the Investor Protection and Education Fund established under the Securities and Exchange Board of India (Investor Protection and Education Fund) Regulations, 2009; iv. The noticees shall complete the sale of shares as directed above within 3 months from the date of this order and file a report to the SEBI detailing the compliance of the above directions within two weeks from the date of such compliance. 22. This Order shall come into force with immediate effect.

Sd/- DATE: March 4th, 2015 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA