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2. The facts of the case are fairly simple and are admitted on all sides. The two appeals arise from almost identical facts but in this judgment we would be referring to the paper book of Civil Appeal No.7148 of 2009.

3. On October 3, 2007 Ranbaxy Laboratories Limited (respondent no.3), a company incorporated and registered under the Indian Companies Act, entered into a Share Purchase and Share Subscription Agreement jointly with Zenotech (respondent no.4) and its promoter, Dr. Jairam Chigurupati (respondent no.1 in Civil Appeal No.7148). The agreement provided for Ranbaxy to purchase from Zenotech's promoters a large block of equity shares (78,78,906 in number), representing 27.35% of the company's fully paid-up equity share capital, at the negotiated price of rupees one hundred and sixty (Rs.160.00) per equity share and to subscribe to 54,89,536 fully paid-up equity shares at the same price (rupees one hundred and sixty per share) under a preferential allotment by Zenotech. Having entered into the agreement to acquire shares that would entitle it to exercise voting rights in Zenotech far in excess of the statutorily prescribed limit of fifteen percent (and, in all likelihood, control over it) Ranbaxy was legally obliged to make a public announcement to acquire shares of the company from the ordinary shareholders. It did so on October 5, within four days of the agreement as required by law. In the public announcement it sought to acquire from the public shareholders, equity shares of Zenotech constituting twenty percent of its expanded share capital. In the public announcement Ranbaxy quoted offer price of rupees one hundred and sixty only (Rs.160.00) per equity share as the negotiated price under the agreement (SPSSA) was the highest of the prices arrived at by the different ways prescribed by law. On November 8, 2007 the share purchase transaction between Ranbaxy and the promoters of Zenotech (Dr. Chigurupati and his family) was completed and at the annual general meeting of Zenotech held on the same day, the shareholders of Zenotech approved the preferential allotment of shares to Ranbaxy. On November 23, 2007 Zenotech duly allotted (by way of preferential allotment) 54,89,536 fully paid-up shares to Ranbaxy. The `open offer' made by Ranbaxy for Zenotech shares, in terms of the Takeover Regulations, closed on November 15, 2008. Following the completion of the open offer formalities, Ranbaxy issued a post offer announcement on January 30, 2008. The announcement disclosed that though in the public announcement it offered to purchase shares amounting to twenty percent of Zenotech's capital it actually received shares comprising only 2.2 percent of the expanded share capital of the company and further that on completion of all transactions Ranbaxy's shareholding in Zenotech stood at 46.85% of the latter's share capital. It may be stated here that even after the sale in terms of the agreement the promoters (Dr. Chigurupati and his family) retained a large portion of their shareholding in Zenotech.

(ii) Ranbaxy Laboratories Ltd. Under the agreement, Daiichi would acquire 30.91% of the fully paid-up equity share capital of Ranbaxy by buying a sufficiently large block of shares from the company's promoters. In addition, Daiichi would subscribe to (i) shares, representing in the aggregate 11% of the fully paid-up equity share capital of Ranbaxy, and (ii) 2,38,34,333 share warrants, each warrant exercisable for one equity share of Ranbaxy. On the same day Ranbaxy informed the Stock Exchanges that in the meeting held on that date its Board of Directors had ratified the terms of the SPSSA and had decided to seek the approval of the company's shareholders for issuance of the shares and the warrants to Daiichi, on preferential basis, as stipulated in the SPSSA. In this letter dated June 11, 2008, addressed to the Stock Exchanges it was also stated that, since Ranbaxy was holding 46.85 percent of the equity shares of Zenotech, the SPSSA "has also triggered an `Open Offer' to be made by `Daiichi Sankyo' to the public shareholders of `Zenotech' to acquire a minimum of 20% of the Equity Shares of `Zenotech' at a price to be determined under the applicable SEBI Regulations". In order to complete its takeover of Ranbaxy as envisaged under the SPSSA, Daiichi went through the gamut of the statutory prescriptions. On June 16, 2008 it made a public announcement (`open offer') to the shareholders of Ranbaxy (other than the Sellers under the SPSSA) to acquire in the aggregate 22.01% of the fully paid-up equity share capital of Ranbaxy. The offer price in the public announcement, was rupees seven hundred and thirty seven only (Rs.737.00) for each share, which was the price Daiichi had paid to the company's promoters for acquisition of the shares under the agreement and which worked out to be the highest of the prices reckoned by the different ways prescribed by the law. Daiichi's control over Ranbaxy consummated on October 20, 2008 when it acquired more than fifty percent of the share capital of Ranbaxy (as it stood on that date) and on and from that date Ranbaxy became a subsidiary of Daiichi. The relation in which Ranbaxy came with Daiichi had another consequence, to which an allusion was made in the letter that Ranbaxy had addressed to the Stock Exchanges on the date of the SPSSA. Whether intended or not, as a result of its takeover (direct) of Ranbaxy, Daiichi also (indirectly) acquired control of 46.85% of the equity share capital in Zenotech, held by Ranbaxy. What on the date of the SPSSA was an anticipated consequence, on October 20, 2008 became the reality and this date became the starting point for reckoning the period during which the "acquirer", Daiichi must make the public announcement (open offer) to the shareholders of Zenotech. Daiichi duly made the public announcement in regard to Zenotech on January 19, 2009. In the public announcement, Daiichi offered rupees one hundred thirteen and paise sixty two (Rs.113.62) for each share of Zenotech. The offer price was based on the price of the Zenotech shares quoted on the stock exchange.

29. The Securities Appellate Tribunal accepted the respondents' contention observing and holding as follows:

"It is Daiichi's own case, as is clear from the public announcement made to the shareholders of the target company, that Ranbaxy became its subsidiary on October 20, 2008 when the acquisition of Ranbaxy got completed. Being a subsidiary, Ranbaxy shall be deemed to be acting in concert with Daiichi with effect from that date as per Regulation 2(1)(e)(2)(i) of the Takeover Code. According to this Regulation, "person acting in concert" comprises a company, its holding company or subsidiary unless the contrary is established. There is no question of the contrary being established in the instant case because Daiichi itself had made it known in the public announcement to the shareholders of the target company that Ranbaxy had become its subsidiary on October 20, 2008. It is, thus, clear that on January 19, 2009, the material date on which the offer price for indirect acquisition is being worked out, Ranbaxy, being a subsidiary, was acting in concert with the Daiichi and that it (Ranbaxy) had paid Rs.160 per share to the shareholders of the target company during January 16 and January 28, 2008 when it acquired their shares under the Ranbaxy-Zenotech deal which period falls within twenty-six weeks prior to June 16, 2008. In other words, Ranbaxy, a person acting in concert with Daiichi on January 19, 2009, had paid during twenty-six weeks prior to June 16, 2008, Rs.160 per share to the shareholders of the target company. In this view of the matter, the price paid by Ranbaxy to the shareholders of the target company has to be reckoned with in terms of sub- regulation 4(b) read with sub-regulation (12) of Regulation 20 while determining the offer price for the indirect acquisition of the target company."

39. He contended that such a simple ploy would defeat the whole object and purpose of the Takeover Code. We shall presently consider the illustration given by Mr. Divan and the validity of the inferences drawn by him on that basis.

40. From the rival contentions it is clear that the real controversy among the parties is about the applicability of regulation 20(4)(b) to determine the offer price for Zenotech shares in the public announcement made by Daiichi. Regulation 20(4)(b) speaks of the price paid by the acquirer or persons acting in concert with him for acquisition of shares , if any, during the twenty six weeks period prior to date of public announcement. It does not speak of any agreement to acquire shares or of any voting rights or control over the target company but the actual price paid for acquisition of its shares. Here a question arises, to what point in time does the expression "person acting in concert" used in regulation 20(4)(b) refer? Should the person be acting in concert with the acquirer at the time of the public announcement or at the time of acquisition of shares of the target company? To make the matter more explicit, assuming that Daiichi and Ranbaxy together comprised "persons acting in concert" on the date Daiichi made the public announcement for Zenotech shares, was it sufficient that they were in that relationship on that date or for the application of regulation 20(4)(b) it was necessary that Daiichi and Ranbaxy should have been in that relationship when Ranbaxy had made acquisition of Zenotech shares. The Appellate Tribunal has of course proceeded on the basis that since Daiichi and Ranbaxy were "persons acting in concert" on the date of the public announcement made by Daiichi for Zenotech shares sub-regulation (b) of regulation 20(4) would be attracted regardless of the fact that the two were not in that relationship on the dates of purchase of Zenotech shares by Ranbaxy.