Supreme Court – Daily Orders
Gpe (India) Ltd vs Twarit Consultancy Services Private … on 26 August, 2025
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ITEM NO.3 COURT NO.6 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s).6856/2023
[Arising out of impugned final judgment and order dated 05-01-2023
in ARB. O.P.(COM. DIV) No. 88/2022 passed by the High Court of
Judicature at Madras]
GPE (INDIA) LTD & ORS. Petitioner(s)
VERSUS
TWARIT CONSULTANCY SERVICES PRIVATE LIMITED & ANR. Respondent(s)
IA No. 69062/2023 - EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT
IA No. 171210/2024 – EXEMPTION FROM PERSONAL APPEARANCE
IA No. 146939/2024 – MODIFICATION OF COURT ORDER
IA No. 194480/2024 – PERMISSION TO FILE ADDITIONAL
DOCUMENTS/FACTS/ANNEXURES
IA No. 182414/2023 – PERMISSION TO PLACE ON RECORD SUBSEQUENT FACTS
WITH
Diary No(s). 45297/2023 (XII)
IA No. 246048/2023 – CONDONATION OF DELAY IN FILING
IA No. 246049/2023 – EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT
IA No. 48838/2024 – MODIFICATION
IA No. 246050/2023 – PERMISSION TO FILE ADDITIONAL
DOCUMENTS/FACTS/ANNEXURES
CONMT.PET.(C) No. 206/2024 in SLP(C) No. 6856/2023 (XII)
Date : 26-08-2025 These matters were called on for hearing today.
CORAM :
HON’BLE MR. JUSTICE J.B. PARDIWALA
HON’BLE MR. JUSTICE K.V. VISWANATHANFor Petitioner(s) Mr. Balbir Singh, Sr. Adv.
Mr. Jatin Pore, Adv.
Mr. Sreeram Vg, Adv.
Mr. Chandra Prakash, Adv.
Mr. Naman Tandan, Adv.
For M/S. D.S.K. Legal, AOR
Signature Not VerifiedMr. Rajiv Shakdher, Sr.Adv.
Digitally signed by
SATISH KUMAR YADAV
Date: 2025.08.26
17:24:18 IST
Reason:
Mr. Siddharth Khattar, Adv.
Mr. Kush Chaturvedi, AOR
Syed Faraz Alam, Adv.
Mr. Atharva Gaur, Adv.
Mr. Aayushman Aggarwal, Adv.
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Ms. Ayesha Choudhary, Adv.
Mr. Karan Khetani, Adv.
Mr. J.Ivan Rajan, Adv.
Mr. Divij Mohan, Adv.
Mr. Samrath Rekhi, Adv.
For Respondent(s) Mr. Purvish Malkan, Sr. Adv.
Mr. Karan Jain, Adv.
For M/S. D.S.K. Legal, AOR
Mr. Atul Sharma, Adv.
Mr. Abhinav Sharma, Adv.
Mr. Alok Tripathi, AOR
UPON hearing the counsel the Court made the following
O R D E RSLP(C) No.6856/2023
1. This petition arises from the judgment and order passed
by the High Court of Judicature at Madras, dated 05.01.2023 in
Arbitration O.P.(COM. DIV) No. 88/2022 and O.A. No.76/2022 and
A.No. 67/2022 respectively, by which the petition filed by the
petitioners herein under Sections 47 and 49 of the Arbitration and
Conciliation Act, 1996 respectively (for short, `the Act 1996’) to
declare the foreign arbitral award being enforceable in India with
other ancillary prayers came to be disposed of holding that the
Foreign Award, in favour of the petitioners, is enforceable in
India subject to obtaining RBI approval, if required under the law.
2. We should first take notice of the order dated 17.04.2023
passed by a coordinate Bench. The same reads thus:
“Issue notice to the respondents, returnable in
the month of July 2023.
Notice will also be issued to the Reserve Bank
of India to ascertain, if at all any
approval/permission from them is required,and if yes,
at what stage will it be required. Copy of the
paperbook with this order will be served on the
nominated counsel for the Reserved Bank of India, who
3would obtain instruction and file response.
We clarify that the execution proceedings may
continue. It will be open to the petitioners to file
an application as an allegation has been made that
the respondents are parting with the assets with a
view to frustrate the award/decree. We clarify that
we merely recorded the submission, and have not made
any comments on the correctness or merits of the
allegation.”
3. We should also take notice of the second order dated
12.12.2023, which reads thus:
“It is stated by the learned counsel
appearing for the Reserve Bank of India (RBI) that
the payment under an award is treated as a current
account payment and does not require any specific
approval or permission. This statement is made
without prejudice to the rights and contentions of
the RBI or relating to the purchase of shares.
Let an affidavit to the above effect be
filed on behalf of the RBI within seven days from
today.
Re-list in January 2024.”
4. The High Court while disposing of the petition filed by
the petitioners herein for the purpose of enforcement of the
Foreign Award recorded a categorical finding that the respondents
herein – judgment debtors failed to establish any ground on which
the recognition of the Foreign Award should be declined. Para 45
of the impugned order reads thus:
“45. For reasons set out above, I conclude that the
respondents failed to establish any ground on which the
recognition of the Foreign Award should be refused.
Consequently, subject to the requirement of obtaining
RBI approval before initiating further proceedings for
enforcement, the Foreign Award is recognized and held to
be enforceable as a decree of this Court. As a
corollary, subject to and in accordance with terms and
conditions, if any, imposed by the RBI in its approval,
the respondents are required to pay the amounts claimed
by the petitioners in paragraph 36(b) of the petition.
If the Foreign Award is not complied with, after
4obtaining RBI approval, it is open to the petitioners to
institute appropriate proceedings in accordance with the
applicable provisions of the Code of Civil Procedure,
1908. Consequently, connected original application and
application are closed.”
5. We heard Mr. Balbir Singh, the learned Senior Counsel
appearing for the petitioners, Mr. Rajiv Shakdher, the learned
Senior Counsel appearing for the judgment-debtors and Mr. Atul
Sharma, the learned counsel appearing for the Reserve Bank of India
(for short, `RBI’).
6. Mr. Shakdher, the learned Senior Counsel, tried his best
to persuade us to take the view that the agreement between the
parties itself could be termed as illegal as the parties were in
pari delicto. In such circumstances, according to Mr. Shakdher,
once this Court holds that the agreement itself is illegal, the
Foreign Award cannot be enforced under the provisions of the Act
1996.
7. On the other hand, Mr. Balbir Singh, the learned Senior
Counsel, fervently urged the Court to look into the Affidavit-in-
Reply, filed by the RBI, particularly the stance of the RBI.
According to Mr. Balbir Singh, the RBI has made itself very clear
that the payment of compensatory damages, as awarded by the
Arbitral Tribunal, being in the nature of current account
transaction, the same is enabled under Section 5 of the Foreign
Exchange Management Act, 1999 (for short, `FEMA’) read with Foreign
Exchange Management (Current Account Transaction) Rules, 2000 by
residents (respondents) to non-resident (petitioner Nos.1-2
respectively), and per se, would not require any approval or
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permission from the RBI under the FEMA. The RBI, in its Affidavit-
in-Reply, has stated thus:
“5. It is stated that, in exercise of the powers
conferred by clause (b) of sub-section (3) of Section 6
and Section 47 of FEMA, the Reserve Bank makes the
regulations to prohibit, restrict or regulate, transfer
or issue security by a person resident outside India.
Accordingly, foreign investments by a person resident
outside India in the equity instruments in India was
governed by Notification No. FEMA.20/2000-RB dated
03.05.2000 (“FEMA 2000 Notification”) at the time when
the investment in the instant case was made by the
Petitioners. FEMA 2000 Notification has since been
replaced by Foreign Exchange Management (Transfer or
Issue of Security by a Person Resident Outside India)
Regulations, 2017 issued vide Notification No. FEMA
20R/2017-RB dated 07.11.2017 and further again
superseded by Foreign Exchange Management (Non-debt
instruments) Rules, 2019 dated 17.10.2019 (“FEMA NDI
Rules”).
(Note: sub-section (3) of Section 6 was omitted Amended
vide the Finance Act, 2015 dated 14-05-2015).
A copy of FEMA 2000 Notification has been attached as
Annexure R-3/1.
6. It is stated that the present Petition has been
filed to seek special leave to appeal against the Order
dated 05.01.2023 of the Hon’ble High Court of Madras
relating to enforcement of the foreign arbitral award
granted in favour of the Petitioners under the
Arbitration and Conciliation Act, 1996 (“Impugned
Order”). Under the Impugned Order, the Hon’ble High
Court of Madras has observed, inter alia, that,
“41. Given that FEMA is a statute aimed at
regulating foreign exchange, in my view, the receipt
of damages equivalent to the entire unpaid sale
consideration of INR 195 crore pursuant to the
Foreign Award for breach of contracts to buy shares
at an aggregate sum of INR 200 crore, when the
market value of the shares at the time of breach was
zero, requires the prior approval of RBI. While
undertaking this exercise, the RBI will do well to
bear in mind that an Indian company received
investments by representing and warranting that the
agreements are valid and enforceable under Indian
law and thereafter reneged on contractual
obligations. This resulted in the award of damages
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by the Arbitral Tribunal. Some relevant
considerations would be: if the amount received as
damages is not repatriated and is instead deployed
in India, there may not be an impact from a foreign
exchange outflow perspective, whereas, if the money
is to be repatriated out of India, the implications
from a foreign exchange perspective change
significantly. These and other material aspects may
be taken into consideration by the RBI upon receipt
of an appropriate application. To that extent, in
this context, I disagree with the conclusion in NTT
Docomo.” (emphasis added)
7. Accordingly, under the Impugned Order, the
Hon’ble High Court of Madras has held, inter alia,
that:
“Consequently, subject to the requirement of
obtaining RBI approval before initiating further
proceedings for enforcement, the Foreign Award is
recognized and held to be enforceable as a decree
of this Court. As a corollary, subject to and in
accordance with terms and conditions, if any
imposed by the RBI in its approval, the
respondents are required to pay the amounts
claimed by the petitioners in paragraph 36(b) of
the petition….” (emphasis added)
8. It is observed from the writ petition that the
aforementioned foreign arbitral award dated 07.01.2021
has been granted in the international commercial
arbitration held in Singapore International Arbitration
Centre in accordance with the Singapore International
Arbitration Centre Rules, 2016. The aforementioned
arbitration had arisen on account of a dispute under
three share purchase agreements (hereinafter referred
as “SPAs”) and a letter agreement dated 28.09.2015
wherein the Respondents 1 and 2 were to purchase the
securities held by the Petitioners in Haldia Coke and
Chemicals Private Limited. However, it is observed that
a dispute arose when Respondents 1 and 2 failed to
furnish the purchase consideration in accordance with
the SPAs. In accordance with the arbitral award, the
Petitioners were awarded aggregate damages for INR
195,00,00,000/- with interest for breach of SPAs by
Respondents 1 and 2. A copy of the SPAs is attached as
Annexure P-1 to the Petition. A copy of the letter
agreement dated 28.09.2015 is attached as Annexure P-2
to the petition.
9. It is stated that two share subscription and
shareholders agreements dated 31.05.2010 executed by
the Petitioners for purchase of securities of Haldia
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Coke and Chemicals Private Limited (“SSHAs”) stated
that:
“the Investor [i.e., the Petitioners who have
invested in Haldia Coke and Chemicals Private
Limited] shall be entitled to receive an IRR of at
least 24% (twenty four percent) on its Total
Investment Amount by exercising any of the rights
under Clauses 15.2.4, 15.2.3, or 15.2.5 (“Put Buy
Back Return”)
10. It is stated that the aforementioned provisions of
the SSHAs provided the Petitioners with an exit option
wherein the exit price for each security was
guaranteed.
11. It is submitted that Section 6 of the FEMA
regulates capital account transactions (investments)
involving foreign exchange in capital instruments made
by a person resident outside India and FEMA 2000
Notification regulates foreign investments at the point
in time during which the investments were made by the
petitioners. It may be noted that in terms of
Regulation 5 (1) of FEMA 2000 Notification read with
Para 5 (b) of Schedule 1 further read with Regulation
10B of FEMA 2000 Notification, the non-resident
petitioners cannot invest in an instrument which
provides an assured exit price as the investment in an
Indian Company and transfer of shares to another
resident has to be at fair value arrived at as per the
instructions issued by Reserve bank from time to time.
Relevant portion of the Para 5 (b) of Schedule 1 and
Regulation 10B of FEMA 2000 Notification is reproduced
herein below:
“5. Issue Price:
Price of shares issued to persons resident outside
India under this Schedule, shall not be less than –
(b) the fair valuation of shares done by a SEBI
registered Category-I Merchant Banker or a Chartered
Accountant as per the discounted free cash flow
method, where the shares of the company is not listed
on any recognised stock exchange in India …”
“10. B Transfer by way of sale not covered by
Regulation 9 by a person resident outside India(1) A person resident outside India, may transfer
share or convertible debenture of an Indian company,
without the prior permission of the Reserve Bank, by
way of sale, to a person resident in India subject to
the adherence to pricing guidelines, documentation
and reporting requirements for such transfers as may
8be specified by Reserve Bank from time to time.]
12. It is submitted that, an Indian entity can issue
equity instruments to a person resident outside India
only at a price more than or equal to the fair value of
shares as determined in accordance with the pricing
guidelines of Reserve Bank.
13. It is therefore submitted that, based on the
perusal of the documents produced along with the
Special Leave Petition, it is prima facie observed that
the initial investment made through the SSHAs involves
contravention of applicable provisions of FEMA.
14.It is further submitted that the share transfer
contemplated under the SSHAs as referred to in the
present petition is also prohibited under Regulation
10B of FEMA 2000 Notification as a guaranteed exit
price to the person resident outside India for the
investment made may not be adhering to the pricing
guidelines. Relevant portion of the Regulation 10B of
FEMA 2000 Notification is already reproduced for
reference above.
15.The detailed guidelines on the pricing for transfer
of shares from person resident outside India to person
resident in India is to be read with relevant
instructions consolidated in Master Circular on Foreign
Direct Investment issued by RBI from time to time. In
this regard, Para 2 of Annex-3 of Master Circular on
Foreign Direct Investment dated 01.07.2010 (“Master
Circular”) states that:
“2.3 Transfer by Non-resident (i.e. by incorporated
non-resident entity, erstwhile OCB, foreign national,
NRI, FII) to residentSale of shares by a non-resident to resident shall be
in accordance with Regulation 10 B (2) of
Notification No. FEMA 20/2000-RB dated May 3, 2000
which shall not be more than the minimum price at
which the transfer of shares can be made from a
resident to a non-resident as given at para 2.2
above.”
A copy of the Master Circular is attached as Annexure
R-3/2.
16.However, in the instant case, it is understood
from para 35 and 45 of the Impugned Order that,
pursuant to the failure of Respondents 1 and 2 to
furnish the purchase consideration in accordance with
the SPAs, the Arbitral Tribunal has awarded aggregate
damages of INR 195,00,00,000/- plus interest for
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breach of contract to purchase shares that were
subscribed to by the Petitioners. Thus, the Arbitral
Award does not provide for any transfer of shares
from Petitioners to Respondents. The Ld. Tribunal
has, instead, awarded INR 195,00,00,000/- as
compensatory damages that shall be paid to the
Petitioners by the Respondents, which are not in the
nature of the consideration for transfer of equity
shareholding from the Petitioners to the Respondents
as contemplated under the SSHAs.
17. In view of the above, it is submitted that the
payment of compensatory damages as awarded by the Ld.
Tribunal, being in the nature of current account
transaction is enabled under Section 5 of FEMA read
with Foreign Exchange Management (Current Account
Transaction) Rules, 2000 by resident Respondents to
non-resident Petitioners Nos. 1 and 2, and per se would
not require any approval or permission from the
Answering Respondent under FEMA. Further, it may be
noted that payment of such compensatory damages without
any transfer of equity instrument does not fall under
the purview of RBI. The submissions made hereinabove
are without prejudice to the position that to the
extent issuance and transfer of shares referred to in
the writ petition involve contravention of FEMA, the
contravening parties are liable, unless such
contraventions are compounded in accordance with the
provisions of FEMA. A copy of Foreign Exchange
Management (Current Account Transaction) Rules, 2000 is
attached as Annexure R-3/3.
18.It is further submitted that as far as payment of
amount awarded under the Arbitral Award as damages by
resident Respondents to resident Petitioner No. 3,
being a transaction between a person resident in India
with another person resident in India, does not fall
under the purview of FEMA. “
8. Learned counsel appearing for the RBI submitted that he
has nothing further to add in view of the clear stance of the RBI
as reflected in the Affidavit-in-Reply.
9. In view of the aforesaid, we are of the view that there
is no impediment in law insofar as enforcement of the Foreign Award
is concerned. Nothing further is required to be adjudicated in
this petition and the same is accordingly disposed of.
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10. The execution proceedings shall now proceed further
expeditiously.
11. As a result, the pending interlocutory applications also
stand disposed of.
D.No.45297/2023
1. Delay condoned.
2. In light of the disposal of SLP(C) No.6856/2023, the
instant petition is dismissed.
3. As a result, the pending interlocutory applications also
stand disposed of.
Contempt Petition (C) No.206/2024 in SLP(C) No.6856/2023
1. Learned counsel for the petitioner does not want to press
the petition.
2. The Contempt Petition is, accordingly, disposed of as not
pressed.
(SATISH KUMAR YADAV) (POOJA SHARMA) ADDITIONAL REGISTRAR COURT MASTER (NSH)