Damages suit: Satyam told to wait for judgement in similar case
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Damages suit: Satyam told to wait for judgement in similar case

Last Updated: Tuesday, January 24, 2012, 16:05
 
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Damages suit: Satyam told to wait for judgement in similar case
Hyderabad: The damages claim, filed by Mahindra Satyam against its former board of directors, certain employees and audit firm Price Waterhouse may not be taken up by a local court immediately as it has demanded the court fee in cash, whereas the company prefers to pay it in draft or cheque.

Sources close to the development said that as of now, the court has advised the company to wait for the judgment of a similar case that is pending before the AP High Court.

"As per court rules it will accept only cash as court fee. However the company argues that since the amount involved is large, it cannot pay cash due to accounting problems. Now the court has advised Mahindra Satyam to wait for the judgment in a similar case in the higher court," sources told.

The company has to pay one per cent of the total damages claimed in the petition as court fee.

Sources said Mahindra Satyam, which has claimed around Rs 250 crore as damages, would have to pay Rs 25,00,000 as non-refundable court fee.

Though the final claim of the damages will run into thousands of crores, Mahindra Satyam chose to claim lesser amount in the petition as it is yet to make payments in some of the issues that the company agreed to settle.

"The court asked the Mahindra Satyam not to ask for dispensation of the case as it is advisable to wait for the Andhra Pradesh High Court judgment on a similar issue," sources said.

The company has named around 123 people as defendants, including Satyam Founder Chairman B Ramalinga Raju, Rama Raju, V Srinivas, and former directors including Ram Mynampati and Krishna Palepu, sources added.

In January 2009, Ramalinga Raju admitted to an accounting fraud of Rs 14,000 crore at the IT firm. The government soon stepped in and set up a new board, following which Tech Mahindra bought a 46 per cent stake in Satyam through a formal public auction process. The company was later rechristened as Mahindra Satyam in July.

Last year, Mahindra Satyam agreed to pay USD  125 million (over Rs 587 crore) in an out-of-court settlement to end a bunch of class action suits filed in the US. It had also agreed to pay USD  70 million in a legal settlement with British firm Upaid Systems.

The Indian tax authorities have also slapped an income tax claim of about Rs 2,500 crore on the company.

According to a member of Institute of Chartered Accountants of India, no company or individual should deal with more than Rs 20,000 in cash. However, in special cases such as compensation to farmers, exgratia to victims Government may pay cash.

Bureau Report


First Published: Tuesday, January 24, 2012, 16:05


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