From correspondents in Maharashtra, India, 11:11 PM IST

Promoters of Pune based hi-tech construction equipment company Aquarius Engineers Pvt. Ltd., who are also the Indian promoters in the Goa based Joint Venture Company Putzmeister India Pvt. Ltd., won a major legal battle against Putzmeister AG, Germany in the Delhi High Court. The Delhi High Court in its verdict dated 1st July 2008 has upheld the Government’s Order that Putzmeister A. G, Germany has violated Press Notes 1 and 3 of the Government of India in making an investment in its wholly owned subsidiary Dynajet Machinery India Private Limited, now known as Putzmeister Concrete Machines Limited.

The India promoters entered in to a JV Agreement with Putzmeister, Germany in 1997 for manufacture of Concrete Pumps. The JV Company has been performing in an excellent fashion and is expanding operations both in terms of manufacturing capacity as well new hi-tech products. Putzmeister AG formed a wholly owned subsidiary by the name Dynajet Machinery India Pvt. Ltd., in the year 2005, in the same field, without obtaining any prior approval, as required by the Indian Government Regulations commonly known as Press Notes 1 and 3. Putzmeister AG availed the automatic route via RBI for making investment in its wholly owned subsidiary.

On learning about the same, Putzmeister India Pvt. Ltd., and the Indian Promoters complained to various authorities and filed a Writ Petition in the Delhi High Court. During the pendency of this Writ Petition, the Govt. of India gave its Order on 2nd April 2007 that a violation of the FDI Policy had occurred by Putzmeister AG making investment in its wholly owned Indian subsidiary and directed the Reserve Bank of India to take action.

Putzmeister AG and its wholly owned subsidiary challenged the Order of the Govt. of India by filing a Writ Petition in the Delhi High Court. Both the Writ Petitions were heard by the Delhi High Court and by a Judgment dated 1st July 2008 the Delhi High Court has upheld the Government's Order.

With the Delhi High Court's Judgment the investment made by Putzmeister AG in its wholly owned Indian subsidiary has come in difficulty. Action from the Reserve Bank of India and other authorities is awaited in the matter.

Several cases pertaining to violation of Press Note 1 and Press Note 3 are being contested in Indian Courts. The verdict given by the Delhi High Court has been a Landmark Judgment in this matter.

Source: Press Release Distribution via India PRwire