Navigating the Legalities: A Case Analysis of ChhatwalGroup Trust, Shrem Infraventure Pvt. Ltd., and ShremRoadways Pvt. Ltd

Abstract

Chhatwal Group Trust (CGT) along with Shrem Infraventure Pvt. Ltd. (SIPL) and Shrem Roadways Pvt. Ltd. (SRPL) gave a notice to the Competition Commission of India (CCI) on 02.01.2018 under section 6(2) of the Act. The above stated acquirers proposed acquisition of 23 special purpose vehicles (SPVs) and wholly owned subsidiaries of Dilip Buildcon Ltd. (DBL) in furtherance of the Master Agreement (MA) dated 18.12.2017. CCI approved the combination under section 31(1) subject to any proceedings under section 43A of the Act. While reviewing the combination, it was found that parties entered into two indicative Term Sheets on 24.08.2017 prior to execution of the MA. On 27.09.2017 and 24.10.2017, it was noted that, INR 70 Cr. & INR 50 Cr. were transferred to DBL by SIPL & SRPL as token amount. It was due to this transaction, CCI formed a prima facie opinion that such pre-payment has amounted to part consummation of combination before the filing of notice and seeking an approval from CCI. On 13.04.2018, a show cause notice was issued by CCI to the acquirers. An opportunity was provided to the concerned parties to state reasons as to why penalty shall not be imposed on them for violation of section 6(2) of the Act.