With reference to the direction to pay interest @ 15% per annum by way of compensation to the shareholders with effect from 27.8.1999 which, according to SEBI, is the alleged date on which the "offer process" would have been complete, it was submitted that assuming though without admitting, the worst position that the Appellant’s appeal is disallowed and the Appellant held to have been under obligation to have made a public announcement on 28.4.1999, the levy of interest @ 15% is without any basis for the reasons: that (i) the rate of 15% per annum is excessive, that the Hon’ble Supreme Court has held in Smt. Kushnuma Begum Vs. New India Insurance Co. Ltd., ((2001) 2 SCC 9) that where no rate of interest is specified, 9% per annum (which at that time was linked to the nationalised bank rate of interest for fixed deposit for one year) was considered reasonable compensation, that SEBI has itself on different occasions, where rate of interest is not specified by a particular Regulation, levied interest at different rates of 10%, 12% etc., that the rate of interest differs from time to time and currently it ranges from 5% to 7% on bank deposits for one year, which should have been the norm in this case also. Apart from the question of rate, interest should have been applied only in case of those shareholders who were shareholders on 28th April 1999 (the date on which according to SEBI, the public announcement should have been made) and continue to remain shareholders in an uninterrupted manner till today, and not to all shareholders who were shareholders at the time of the impugned order. This principle has now been settled by the Tribunal in Clariant International Ltd., V SEBI (2003)42 SCL 834 (SAT) Further, SEBI has also ignored the fact that even if an offer was to have been made by the Appellant pursuant to a public announcement in April, 1999, it would have had to be a conditional offer maturing with the sale of the Eyecare assets by the Target Company which ultimately took place on 23.10.2000 and therefore the shareholders could not have expected any money for their shares till that date and, as such the period from which interest could have been levied under such circumstances would only be effective from 23rd October, 2000 and not earlier, that in the context the Counsel for SEBI had left the question of the rate, the extent and the period of applicability of interest to the Tribunal, that it was submitted that the Tribunal may not direct to pay interest in the facts and circumstances, as the question of levy of interest does not arise as the Appellant had no obligation to make a Public Announcement under the Regulations.
