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2015 (3) TMI 899 - HC - Companies LawConfidential and unpublished price sensitive information - Acquisition of shares - Insider trading - Regulation 3A of Securities and Exchange Board of India (Prohibition of) Insider Trading Regulations, 1992 - Board to investigate into the insider trading - Held that:- In the present case, as noted above, the allegations of the petitioners are with regard to insider trading. Regulation 3-A states that no company shall deal in the securities of another company or associate of that other company while in possession of any unpublished price sensitive information. Regulation 4A empowers the Board to enquiry into the violations and provisions of the regulations. The procedure for investigation is contemplated from Regulations 6 to 11-A. Powers and functions of the Board and the Penalties are provided under the provisions of the Act. Therefore, from these provisions it is clear that the Act and the Regulations, provide for forum, procedure and penalty for investigating into the offences prohibited under the Act. In other words, under the above provisions, it is the Board, which is the competent authority to investigation into the alleged offence. Coming to the facts of the case, the allegations of the petitioners have been vehemently denied by the contesting respondents, and these disputed questions of fact cannot be gone into by this court under the writ jurisdiction. As noted in the preceding paragraph, the Act and the Regulations, provide for complete procedure for investigating the allegations of insider trading. Further the contesting respondents also referred to procedure contemplated under Clause 24(f) of the Listing Agreement, which the listed company has to follow before seeking approval for scheme of amalgamation, during which also the petitioners can file objections. The Act and the Regulations provide for forum for investigating into the alleged offence of insider trading. Therefore, in my considered view, the petitioners are not justified in approaching this court without availing the alternative and efficacious remedy. Further, under Sections 391 to 394 of the Companies Act, 1956, provide the procedure for amalgamation whereunder, the respective High Courts, where the registered head offices of the two companies are located, have to consider the amalgamation of companies and in the process, they are required to consider all the issues. In my considered view, as contended by the learned counsel appearing for the 6th respondent, the present interim order may come in the process of considering the amalgamation proceedings. Therefore, as the writ petitioners have alternative remedy under the provisions of the Act and the Regulations made thereunder and in according with the said provisions, the Board has already initiated proceedings and seized of the matter and having regard to the above facts and the circumstances, I am of the considered view, that it is not desirable to continue the interim order and the issue framed is answered in the negative. Accordingly the interim order 25.4.2014 in WPMP.No.16656/2014 in W.P.No.13309/2014 is vacated and the vacate petitions are allowed.
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