2015 (3) TMI 620 - HC - Indian Laws

Public Interest Litigation (PIL) to refrain proposed de-recognition of Regional Stock exchanges - No protection to the shareholders of companies listed on such exchanges - No holding by the petitioner - Circular shows the mandatorily listed on other stock exchange or to provide exit option to the shareholders , before de-recognition Held that - The investors in the companies listed on the stock exchanges which are being de-recognized can neither be said to be socially or economically backward nor can it be said that the impugned actions are such as affecting the general public without affecting anyone in particular. The petitioner has been unable to satisfy us as to how he is entitled to file the petition in public interest. The Supreme Court, in Holicow Pictures (P.) Ltd. 2007 (12) TMI 445 - SUPREME COURT has also held that the Court has to act ruthlessly while dealing with such busybodies or meddlesome interlopers impersonating as public spirited persons and masquerading as crusaders of justice. Similarly, in Dr. B. Singh 2004 (3) TMI 740 - SUPREME COURT , it was held that Courts should not waste valuable judicial time which can be otherwise utilized for disposal of genuine cases, in deciding petitions which cannot legitimately be called PILs. -Dismiss the PIL.

Summary

Issues:
1. Whether SEBI can de-recognize Regional Stock Exchanges/Non-Operational Stock Exchanges without providing protection to investors?
2. Whether the petitioner has the locus standi to file a Public Interest Litigation (PIL) in this case?

Analysis:
1. The petition sought directions to SEBI to refrain from de-recognizing stock exchanges without protecting investors' investments. The petitioner argued that SEBI should withdraw certain Circulars related to de-recognition. However, the Court noted that provisions were made for companies listed on de-recognized stock exchanges to seek listing elsewhere or provide exit options for shareholders as per SEBI's guidelines. The Court emphasized that PIL is meant for situations where the public interest is at stake, not for individual grievances. The petitioner failed to demonstrate how the de-recognition process harmed public interest. The Court referred to previous judgments warning against misuse of PIL and dismissed the petition, stating that investors affected by de-recognition are not socially or economically backward, nor does the issue affect the general public without specific impact on individuals.

2. The Court examined the petitioner's locus standi to file a PIL. The petitioner lacked the necessary standing to represent the public interest in this case. The Court highlighted the importance of preventing busybodies or meddlesome interlopers from misusing the PIL mechanism. Citing previous judgments, the Court emphasized the need to prioritize genuine cases over frivolous petitions. As the petitioner failed to establish a valid basis for filing a PIL, the Court dismissed the petition without imposing any costs.

In conclusion, the Court declined to entertain the PIL filed against SEBI's de-recognition of stock exchanges, citing the lack of public interest and the petitioner's insufficient standing to represent such interest. The judgment underscored the importance of upholding the purpose of PIL and preventing its misuse by individuals without a genuine stake in the matter at hand.