TMI Blog2005 (11) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... and regulations made thereunder then the court would certainly have jurisdiction to entertain and try such a suit u/s 9 of the CPC. It is because what is barred under sections 15Y and 20A is only those acts which falls either under the said Act or under the regulations framed thereunder. It is not possible to accept the contention of the learned counsel for the plaintiff that the provisions of sections 15Y and 20A should be so read down so as to exclude the cases of rectification of the share register by shareholder. If the provisions of the Act are such so as to cover all eventualities which arises under the statute then in that event it is not possible that a special exception be carved out only in the matter of one type of case as it is urged by the learned counsel for the plaintiffs. Reading of section 15Y read with section 20A of the Act all the cases arising out of the breach and Take- over Regulations must fall within the exclusive domain of SEBI and cannot be complained in the court of Law by virtue of express bar contained u/s 15Y and section 20A of the SEBI Act. I am also of the further opinion that there is no doubt that there is a common law right in a share- holder to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f and therefore, the right of the plaintiffs is to complain to the SEBI of such breach and seek necessary remedy. The contention of the learned counsel for the plaintiffs that to merely file complaint with the SEBI is not equivalent to the right of the plaintiffs to file a suit for substantial relief cannot be accepted because the nature of the right conferred by the Take- over Regulations provides for substantial nature of remedy thereunder. The plaintiffs must therefore, seek relief as per the provision of law and cannot independently invoke any common law right of rectification of the share and file a suit independent to the provision of sections 15Y and 20A of the SEBI Act. Therefore, the present suit as framed is not maintainable in this court and this court has no jurisdiction in view of the express bar conferred under the provision of section 15H and section 20A of the SEBI Act to entertain and try the present suit. I therefore, answer the preliminary issue of jurisdiction in negative and I hold that this court has no jurisdiction to entertain and try the present suit under section 15Y and section 20A of the SEBI Act. Thus , the suit is liable to be dismissed for want of jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to take charge of the assets of the 7th defendant. Between 1997 to 1999 the promoters tried to obtain funds from the foreign investors to relaunch the airlines. 2. Sometime in or about March 1999 the promoters found an investor known as Ajmal Khan of Canada and after discussion the said Ajmal Khan agreed to fund the defendent No. 7. The said Ajmal Khan through his group of companies agreed to raise U.S. $ 35 million for relaunch of the airlines by way of equity investment of U.S. $ 17.5 million through its holding company, defendant No. 1, and further U.S. $ 17.5 million through the bankers and financial institutions. It is the case of the plaintiff that the said Ajmal Khan agreed that the amount of 17.5 million U.S. Dollar would be offered by private placement and the entire proceeds from the said issue will be utilised by defendant No. 1 for investing in cumulative redeemable convertible preference shares (C.R.C.P.S.). In furtherance of the aforesaid proposal it was decided that C.R.C.P.S. to be preferentially allotted to defendant No. 1 and in respect thereof a necessary resolution under section 81(1)( a ) of the Companies Act, 1956, should be passed allotting the said prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting and proposed to raise the share capital from Rs. 240 crores to Rs. 325 crores with a view to enable the defendant No. 7 to relaunch the airlines. It was also proposed to pass a special resolution under section 81(1)( a ) for preference shares allotment of 1 crore equity shares/convertible warrants to defendant Nos. 8 to 10 aggregating to 3 crore equity shares/convertible warrant of the face value of Rs. 100. A notice was issued on 4-11-2004 for the aforesaid proposal and general body meeting was called on 22-12-2004. It is the case of the plaintiff that pursuant to the said notice dated 4-11-2004 on 21-12-2004 various allotments were made of equity shares to the defendant Nos. 8 to 10. On 28-2-2005 an extraordinary general meeting was called for the purpose of passing a special resolution authorising the preferential allotment of 1.53 million unsecured fully convertible debentures of Rs. 100 each converted into 3.7 million of Rs. 10 each to such a person as the board may decide. At the said meeting on 28-2-2005 the said preference shares allotment was approved. 4. In the aforesaid circumstances the plaintiffs have challenged the original allotment as well as transfer of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares. By prayer c( i ) to c( v ) a declaration has been sought that the sale of the shares of the defendant No. 7 by defendant No. 1 to defendant Nos. 2 to 6 are illegal, null and void and non est because of the original allotment in favour of the defendant No. 1 itself being invalid. By prayer d( i ) to d( v ) the plaintiffs are seeking cancellation of the shares which has been sold in favour of the defendant Nos. 2 to 6. By prayer ( e ) of the plaint a declaration is sought that the allotment by defendant No. 7 of 50,00,000 convertible warrant of Rs. 10 each and 50,00,000 equity shares of Rs. 10 each to the defendant No. 8 pursuant to the resolution dated 6-12-2004 is without authority of law, illegal, null and void and non est. Similarly by prayer e( ii ) to e( iii ) reliefs are sought against similar allotment of convertible warrant and equity shares of 50,00,000 each in favour of the defendant No. 9. By prayer e( iii ) an allotment in favour of the defendant No. 10 of 1,00,000 convertible warrants of Rs. 10 each and 50,00,000 convertible warrants of Rs. 10 each by resolution dated 6-12-2005 is sought to be declared null and void ab initio . By prayer clause ( f ) a directio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said allotments as well as rectification of the said register on such cancellation by prayer clause ( i ) of the present suit. 6. At the ad interim hearing of both the aforesaid motions the defendant No. 4 raised the issue as to the jurisdiction of this court under section 9A of the CPC by filing an affidavit. By my order dated 22-9-2005 I have framed the preliminary issue as to the jurisdiction which reads as under : Whether this court has jurisdiction in the light of section 15Y and section 20A of the SEBI Act, 1992 read with relevant rules and Regulations thereof ? 7. I have heard the parties at length on the said preliminary issue as to the jurisdiction of this court to entertain the present suit in the light of bar contained in the provisions of the SEBI Act, 1992. Before I deal with the rival submission of the parties it is necessary that the relevant provisions of the Act and regulations must be set out for the purpose of appreciation of the rival contentions. PENALTIES AND ADJUDICATION : 15-I. Power to adjudicate. (1) For the purpose of adjudging under sections 15A, 15B, 15C, 15D, 15E, 15F, 15G [15H, 15HA and 15HB], the Board shall appoint any officer not below the rank o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company and in the board of directors of the company, if any, and whether such allotment would result in change in control over the company. ( b ) allotment pursuant to an application made by the shareholder for rights issue, ( i ) to the extent of his entitlement; and ( ii ) up to the percentage specified in regulation 11 : Provided that the limit mentioned in sub-clause ( ii ) will not apply to the acquisition by any person, presently in control of the company and who has in the rights letter of offer made, disclosures that they intend to acquire additional shares beyond their entitlement, if the issue is under-subscribed : Provided further that this exemption shall not be available in case the acquisition of securities results in the change of control of management; ( c ) ( d ) allotment to the underwriters pursuant to any underwriting agreement ( e ) inter se transfer of shares amongst [( i ) group coming within the definition of group as defined in the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) where persons constituting such group have been shown as group in the last published Annual Report of the target company;] ( ii ) relative within the mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer of any proceeds or securities to the investors protection fund of a recognised stock exchange; ( c ) directing the target company or depository to cancel the shares where an acquisition of shares pursuant to an allotment is in breach of regulation 10, 11 or 12; ( d ) directing the target company or the depository to give effect to transfer or further freeze the transfer of any such shares and not to permit the acquirer or any nominee or any proxy of the acquirer to exercise any voting or other rights attached to such shares acquired in violation of regulation 10, 11 or 12; ( e ) debarring any person concerned from accessing the capital market or dealing in securities for such period as may be determined by the Board; ( f ) directing the person concerned to make public offer to the shareholders of the target company to acquire such number of shares at such offer price as determined by the Board; ( g ) directing disinvestment of such shares as are in excess of the percentage of the shareholding or voting rights specified for disclosure requirement under regulation 6, 7 or 8; ( h ) directing the person concerned not to dispose of assets of the target company contrary to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document which, in the opinion of the adjudicating officer, may be useful for or relevant, to, the subject-matter of the inquiry. (7) If any person fails, neglects or refuses to appear as required by sub-rule (3) before the adjudicating officer, the adjudicating officer may proceed with the inquiry in the absence of such person after recording the reasons for doing so. SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002 4. Enquiry for contravention of the regulations - An enquiry for the purpose of passing an order under these regulations may be held for contravention of any of the provisions of ( a ) the Securities and Exchange Board of India (Stock-brokers and Sub-brokers) Regulations, 1992. ( b ) the Securities and Exchange Board of India (Insider Trading) Regulations, 1992. ( c ) the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992. ( d ) the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993. ( e ) the Securities and Exchange Board of India (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this behalf may appoint a presenting officer in an enquiry. (2) The enquiry officer, if he considers it necessary, may advise the Board to appoint a presenting officer for the purpose of the enquiry and the Chairman or a member designated in this behalf on receipt of such advice shall appoint a presenting officer. 8. For the purpose of ascertainment of jurisdiction of this Court under section 9A of Civil Procedure Code it is first required to consider the provisions of section 9 of the Civil Procedure Code. The provisions of section 9 of the CPC, inter alia, provides that the civil court shall have jurisdiction to entertain and try all the matters save and accept the ones which are expressly or impliedly barred under any statute. Thus whether the provision of sections 15Y and 20A of the SEBI Act, 1992 expressly bars the present suit or not is the inquiry which is required to be undertaken. 9. Mr. Virag Tulzapurkar learned counsel for defendant No. 4 has raised the objection as to the jurisdiction of this court to entertain and hear the present suit. He has drawn my attention to the provisions of section 15Y of the Securities and Exchange Board of India Act, 1992 (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed where the cognizance of the type of case is either expressly or impliedly barred by any special statute. The learned counsel for defendant No. 7 has contended that in the present case there is an express bar as contended under sections 15Y and 20A of the SEBI Act and therefore, this court cannot exercise jurisdiction to entertain the suits under section 9 of the CPC. Learned counsel has further contended that even otherwise the provisions of the SEBI Act is a complete code by itself and it provides for right as well as remedy thereunder and thus the jurisdiction of this court is otherwise also impliedly barred and this court ought not to entertain the present suit. He has drawn my attention to the provisions of section 11 of the SEBI Act while analysing the scheme of Act and pointed out that it provides for power and functions of the Board. He has particularly drawn my attention to the provisions of sub-section (4) of section 11 of the said Act which inter alia provides that it is the board who has power to protect the interest of the investor in securities and to permit the development and regulate the securities market by such measure as it thinks fit and while doing so inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of express bar the court ought not to go into the said disputes and must refer the party to the forum prescribed under the Act so as to effectively determine the disputes between the parties. Learned counsel has thereafter drawn my attention to regulation 44 of Takeover Regulations and has contended that clauses ( c ) and ( d ) thereof provides for all the remedies including the nature of remedy sought in the present suit. Learned counsel for defendant No. 7 has contended that sub-clauses ( c ) and ( d ) of regulation 44 takes into account the nature of relief sought by the plaintiff in the present suit and therefore, also the suit ought not to be entertained by this court when especially an expert body like SEBI is conferred with the special power under the SEBI Act, 1992. 11. Learned counsel has thereafter contended that the provisions of SEBI as well as the provisions of the Takeover Regulations are not meant for individual shareholder but are meant as a remedy in favour of the investors as a class and therefore, the remedy which is prescribed under the Act is also of the nature which gives relief to the investors as a class. He has further contended that it is also open for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sildar, the revenue Court and the Collector to try the suit as per the procedure as of a civil court under the Code of Civil Procedure. Section 14 of the Inams Act reads thus : 14. Bar of jurisdiction of civil courts. No suit or other proceedings shall be instituted in any civil courts to set aside or modify any decision of the Tehsildar, the revenue Court, or the Collector under this Act, except where such decision is obtained by misrepresentation, fraud or collusion of parties. 14-A(1) Notwithstanding anything contained in this Act, the Board of Revenue may, at any time either suo motu or an application made to it, call for and examine the records relating to, any proceedings taken by the tehsildar, the Revenue Court or the Collector under this Act for the purpose of satisfying itself as to the regularity of such proceeding or the correctness, legality or propriety of any decision made or order passed therein and if, in any case, it appears to the Board of Revenue that any such decision or order should be modified, annulled, reversed or remitted for consideration, it may pass orders, accordingly. (2) No order prejudicial to any person shall be passed under sub-section (1) unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion, the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case, it is necessary that the statute creates a special right or liability and provides remedy for the determination of the right or liability shall be determined by the Tribunal so constituted and the question whether remedies are normally associated with the action in civil courts or prescribed by the statutes or not require examination. Therefore each case requires examination whether the statute provides right and remedy and whether the scheme of the Act is that the procedure provided will be conclusive and thereby excludes the jurisdiction of the Civil Court in respect thereof. 14. Learned counsel by citing the aforesaid judgments has contended that a particular statute can provide for a bar of the jurisdiction of the civil courts and in that event the court would not entertain any dispute which can be effectively considered under the said statute. He has also drawn my atte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, in the eyes of law. In view of the abovementioned facts, the plaintiffs submit that clearly, the preferential allotment of 8,10,77,500 CRCPS to defendant No. 1 by defendant No. 7 in October, 2000 is bad in law, violative of the provisions of the SEBI Takeover Code, illegal, null and void. The plaintiffs submit that the said CRCPS have been issued pursuant to a Special Resolution passed at the Annual General Meeting of defendant No. 7 on 27th August, 1999. At the time of passing of the said special resolution the defendant No. 7 was under the control of Mr. Ajmal Khan and not of Kansagra Brothers through the medium of their 2 OCBs, Malwood Holdings Ltd. and Desmond Holdings Ltd. It is submitted that when the Kansagra Brothers took over control over defendant No. 1, a fresh resolution under section 81(1A) giving full disclosure regarding identity of the allottee necessarily had to precede the allotment of CRCPS to defendant No. 1. The plaintiffs submit that defendant Nos. 8 to 10 by acquiring control over defendant No. 7 have violated regulation 12 of the Takeover Code. The Takeover Code was triggered at the time of an agreement was reached to enable defendant Nos. 8 to 10 to acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Bench in the aforesaid judgment and in view thereof the issue of jurisdiction raised by defendant No. 4 and supported by the defendant Nos. 1 and 8 is no loner res integra . Learned counsel for the plaintiff has further contended that the judgment of the Division Bench of this court is a law declared which is binding on me and I must follow the view expressed by the Division Bench and reject the contention of the defendant that this court has no jurisdiction to entertain and try the present suit in view of sections 15Y and 20A of the SEBI Act. He has taken me through various paras of the judgments of the learned Single Judge and Division Bench of this Court to support his contention that the contention of jurisdiction was squarely raised before the court and has been squarely answered to hold that this court has jurisdiction irrespective of the fact that sections 15Y and 20A of the SEBI bars the jurisdiction of this court to entertain and try the nature of the suit which has been presented before me. Learned counsel has further contended that infact the provisions of sections 15Y and 20A have been reproduced in the judgment of both the learned Single Judge and the Division Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neous but contrary to the aforesaid judgment itself. Learned counsel has drawn by attention to the judgment of the Single Judge in the case of M. Sreenivasulu Reddy ( supra ) particularly pages 66 to 70 thereunder. It has been pointed out that though the issue as to the jurisdiction being barred by virtue of sections 15Y and 20A of the Act was raised, however on an objection raised by the plaintiff thereunder that the issue of jurisdiction must be framed and determined as per the specific provisions of section 9A of the CPC learned counsel for the defendants in that case had given up the said issue as to the jurisdiction expressly. My attention has been drawn by the learned counsel for the defendants to the following paras of the judgment of the learned Single Judge : In view of the insistence of Mr. Nariman on the basis of the aforesaid authorities, Mr. Chidambaram and Mr. Doctor appearing for the defendants pointed out that their plea was not one of ouster jurisdiction. Section 9A of the Civil Procedure Code (as concluded in Maharashtra) contemplates what is known as ouster of jurisdiction. They submitted that the defendants were only insisting that the discretion to exercise jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Defendants would have relied on Ammonia Supplies Corpn. (P.) Ltd. v. Modern Plastic Containers (P.) Ltd. [1998] 94 Comp. Cas. 310 AIR 1998 SC 3153, read with section 111A(2) and (3). 5. However it is Mr. Reddy (plaintiff) a shareholder who has filed the suit alleging violation of his civil rights. Such a suit can be filed before a civil court (which has territorial and pecuniary jurisdiction). In answer, the defendants urge, among other grounds that ( i ) At an interlocutory stage : ( a ) that this Hon ble court should not in exercise of its discretion, grant any interim relief to Mr. Reddy (plaintiff) since there is another forum which could be moved by the company for rectification of the register; and ( b ) that as Mr. Reddy (plaintiff) is only a name lender for the company and no civil rights of Mr. Reddy are infringed, no relief should be granted to him. These are some factors amongst others which the court should consider. While exercising its discretion in refusing the interim relief. ( ii ) as the trial of the suit : That Mr. Reddy (plaintiff) does not have any civil right to oppose registration or to have the register rectified and hence his suit should be dismissed. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced on two decisions of this court in Meher Singh v. Deepak Sawhny [1998] 4 ALL MR 536 and Institute Indol Portuguese v. Borges [1958] 60 Bom. L.R. 660. Reliance was also placed on the judgments of a Single Judge of this court in Ignatius D counha v. (Dr.) Father Denis [1993] 2 Mah. L.J. 1441. In the light of the submissions urged by Mr. Nariman, the defendants replied that their plea was not one of ouster of jurisdiction, which could be tried as a preliminary issue in view of section 9A of the Code of Civil Procedure. Their submission was that the court may not exercise its discretionary jurisdiction in view of the fact that the aforesaid disputes could appropriately be agitated either before the Company Law Board or the SEBI. The jurisdiction of the civil court and that of the authorities concerned, was somewhat overlapping and concurrent. Mr. Nariman, however, drew the attention of the court to a letter dated January 22, 1999, written on behalf of other defendants to SEBI requesting it to defer the determination in view of the fact that the High Court was seized of the matter. He, therefore, insisted that the defendants must agree to an issue being framed on the question of jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction was never tried as a jurisdictional issue under section 9A in view of the express affidavit filed by the defendant but the said issue of jurisdiction was infact expressly given up. Learned counsel for the defendant has contended that on the other hand in the present case they are pressing for the issue of jurisdiction in view of the bar contained under sections 15Y and 20A of SEBI and this court itself has framed the issue of jurisdiction under section 9A of CPC. It has been thus contended that in the light of the aforesaid position the authorities cited by the learned counsel for the plaintiff both of the learned Single Judge in the case of M. Sreenivasulu Reddy ( supra ) and the judgment of the Division Bench in the case of Shirish Finance and Investment (P.) Ltd. ( supra ) are not the authority at all for the proposition that this court has no jurisdiction in view of the express bar contained under section 15Y read with section 20A of the SEBI Act. Learned counsel for the defendants have contended that the issue of jurisdiction which was considered by the Division Bench and the learned Single Judge of the aforesaid case did not pertain at all to the jurisdiction of this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh it is true that the issue of jurisdiction was given up by the defendants in both the aforesaid judgments, i.e., the Division Bench and the learned Single Judge but even after giving up the said contention the defendants did argue the issue of jurisdiction at length before the Single Judge and the Division Bench and thus the Single Judge and the Division Bench both were required to consider the aforesaid issue of jurisdiction and the court has given a appropriate finding in that behalf and thus the same are binding on me. It has been thus contended by the learned counsel for the plaintiff that though it is true that there is no discussion in the entire judgment of both the Learned Single Judge and the Division Bench as to the jurisdiction of this court in the light of the provisions of sections 15Y and 20A of the SEBI Act but he has urged that it is not necessary that the provisions of the SEBI and/or the wordings of the section must be considered by the court. He has contended that this court has held that identical kind of suit was within the jurisdiction of this court and therein the court has ultimately passed interim reliefs in that behalf and therefore, this court must als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in order to determine whether a prima facie case exists. To what degree the court will enter will vary with the facts of each case. When the court declares that a prima facie case, it intends to say that the case of the plaintiff is not with-out merit. It is an opinion rendered on the state of the evidence then exis-ting on the record, and it is open to the trial court to take a different view when all the three evidence has been let in and the suit itself has to be decided. In some cases, a pure question of law alone may arise in the suit. In such a case when the court expresses an opinion on the question in order to determine in an injunction application whether a prima facie case exists, an impression can conceivably be gathered that the suit itself has been disposed of. But when the matter is considered in deeper perspective, it will be evident that the impression is a false one. The finding is limited to the context in which it has been given. It is a finding on an application for interim relief only. Any opinion expressed by the court, whether it be of the trial court or an appellate court or revisional court, cannot in law preclude the trial court from considering the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in the case of M. Sreenivasulu Reddy ( supra ) the law is well-settled that this court has jurisdiction to entertain and try the present suit irrespective of the provisions of sections 15Y and 20A of the SEBI Act and therefore, this court must hold that this court has jurisdiction to entertain the present suit. 24. I have considered the arguments of both the learned counsel appearing for various parties. Before I deal with the same I am of the opinion that it is necessary to remind myself of the well known golden rule that a judgment is an authority on proposition of law which it decides. This golden rule has been laid down ages back in the famous case of Quinn v. Leathem (1901) AC 495 which has been approved and accepted by this Court in various judgments including the famous case of Privy Purse of the 11 Judges bench of the Apex Court in which it has been inter alia held as under : 229. In the State of Orissa v. Sudhansu Sekhar Misra , dealing with the question as to the importance to be attached to the observations found in the judgments of this court, this is what this court observed : A decision is only an authority for what it actually decides. What is of the essence in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction to entertain and try the suit of the nature which has been placed before me. In my opinion the answer is an emphatic no. This is not only because the issue is not considered and/or decided by either of the judgments of the learned Single Judge and the Division Bench but infact as quoted above the issue was specifically given up and the court has so recorded that the defendants in that case are not pressing the issue of jurisdiction under section 9A of the CPC pertaining to the bar contained under sections 15Y and 20A of the SEBI Act. In the light of the express recording of a concession by the Division Bench and the learned Single Judge that the defendants are not pressing the issue of jurisdiction it is not possible for me to hold that the aforesaid two judgments of the learned Single Judge and the Division Bench is a by way of precedent a binding authority on an issue which was given up and thus not considered by the learned Single Judge and the Division Bench of this court. However the learned counsel for the plaintiff has strenously contended that though the said issue has been given up, still the learned Judge and the Division Bench in appeal have considered the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t affected by the provisions of section 111A which inter alia confers on the Company Law Board the power to rectify the register. It is because the jurisdiction of the Company Law Board is a summary jurisdiction whereas in a case of complicated questions of facts or a serious question of fraud arising the court is empowered to exercise jurisdiction in a civil court in exercise of power conferred under section 9 of the CPC. It has been held that the power of the civil court, under section 9 is not impliedly barred by virtue of the provisions of section 111A. In the light of the aforesaid I am of the view that the judgment of the learned Single Judge and the Division Bench does not conclude an issue as to whether this court has jurisdiction or not in the light of the provisions of sections 15Y and 20A. 27. In the light of the aforesaid view I have taken it is now necessary for me to consider as to whether the provisions of sections 15Y and 20A on the facts of the case bars the jurisdiction of this court to entertain the present suit which has been filed before me. Before I do so it is necessary to consider the settled position of law as to the interpretation of section 9 of the CPC. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emedies normally associated with actions in civil courts are prescribed. . . . (p. 943) 28. The judgment of the 7 Judges bench was followed by another judgment of the constitutional bench in the case of Dhulabhai v. State of Madhya Pradesh AIR 1969 SC 78 there the court laid down the principles which are to be considered for exclusion of jurisdiction of civil court and the seven principles which have been laid down read as under : (1) Where the statute gives a finality to the orders of the special Tribunals the civil courts jurisdiction must be held to be excluded if there is adequate remedy to do what the civil court would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory Tribunal has not acted in the conformity with the fundamental principles of judicial procedure. (2) Where there is an express bar on the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction is expressly provided for, the consideration as to the scheme of the statute in question and the adequacy or sufficiency of the remedy provided for by it may be relevant, but cannot decisive. Where exclusion is pleaded as a matter of necessary implication such consideration would be very important and in conceivable circumstances might become even decisive. (p. 248) 30. It has been further followed in the case of S. Vanathan Muthuraja v. Ramalingam alias Krishnamurthy Gurukkul (1997) 6 SCC 143 and has been further followed in the case of Vankamamidi Venkata Subha Rao v. Chatlapalli Seetharamaratna Ranganayakamma AIR 1997 SC 3082 wherein it has been held as under : 15. . . .Where there is an express bar of jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court. Where there is no express exclusion, the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case, it is necessary that the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as pre-existing it cannot be treated that, that rights has been taken away by implication by providing the provisions of sections 15Y and 20A. It has been further contended that while interpreting sections 15Y and 20A this court also must take into consideration the provisions of sections 21 and 32 of the SEBI Act. It was contended that by virtue of section 21 it is expressly provided that infact the suit or other proceedings which can be brought against any person that would not be meant to have taken away by virtue of the provisions of this Act. By relying upon section 32 it has been contended that the provisions of SEBI Act is in addition to and not in derogation of the provisions of any other law and therefore, the common law right of rectification is not taken away and the remedy under the provisions of the SEBI Act particularly under section 44 of the Takeover Regulations is in addition to the pre-existing common law right and not in derogation thereof. It has been contended that looking to the scheme of the Act itself it is clear that the bar contained under sections 15Y and 20A cannot be extended to the nature of the suit and must be restricted to those matters where the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egister challenging the acquisition of the shares and thus though the provisions of the SEBI Act confer a power on the board to cancel allotment or freeze transfer of shares which are in contravention of Takeover Regulations they do not simultaneously confer any right on the shareholder to challenge the allot-ment and/or transfer of the shares in breach of the Takeover Regulations. He contends that the right of the shareholder is a common law right to maintain purity of the share register and thus consequently he can apply for the enforcement of a right by way of rectification of share register by a civil suit. He further contends that the Takeover Regulations indirectly confers a right on the shareholder to see that the transfer of the shares is not in breach of any law and thus the Takeover Regulation under the said right can be exercised by filing of the suit for rectification of the register. He has also drawn my attention to the Takeover Regulation of the SEBI Act and the inquiry provisions and contended that the provisions of the said Act confers power on the board to see that the Takeover Regulations are not violated but it does not confer any simultaneous right on the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. The relevant part of section 343 is as follows: 343. Order of demolition and stoppage of buildings and works in certain cases and appeal - (1) (2) Any person aggrieved by an order of the Commissioner made under sub-section (1) may prefer an appeal against the order to the appellate Tribunal within the period specified in the order for the demolition of the erection or work to which it relates. (3) Where an appeal is preferred under sub-section (2) against an order of demolition, the appellate Tribunal may, subject to the provisions of sub-section (3) of section 347C, stay the enforcement of that order on such terms, if any, and for such period, as it may think fit : (4) No court shall entertain any suit, application or order proceeding for injunction or other relief against the Commissioner to restrain him from taking any action or making any order in pursuance of the provisions of this section. (5) Subject to an order made by the Administrator on appeal under section 347D, every order made by the appellate Tribunal on appeal under this section, and subject to the orders of the administrator and the appellate Tribunal on appeal, the order of demolition made by the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the common law. Then statutory enactments were few. Even such enactments only created rights or liabilities but seldom provided forums for remedies. The result was that any person having a grievance that he had been wronged or his right was been affected, could approach the ordinary civil court on the principle of law that where there is a right there is a remedy - ubi jus ibi remedium. As no internal remedy has been provided in the different statutes creating rights or liabilities, the ordinary civil courts had to examine the grievances in the light of different statutes. With the concept of the welfare state, it was realised that enactments creating liabilities in respect of payment of taxes, obligations after vesting of estates and conferring rights on a class of citizens, should be complete codes by themselves. With that object in view, forums where created under the Acts themselves where grievances could be entertained on behalf of the persons aggrieved. Provisions were also made for appeals and revision to higher authorities. 12. Then a question arose as to where a particular Act had created a right or liability and had also provided a forum for enforcement of such right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was said to be a society registered under the Tamil Nadu Societies Registration Act asking this Court for direction to the Union of India to refer the dispute under section 4 of the Act and this Court in Tamil Nadu Cauvery Neerppasana Vilaiporugal Viulasayigal Nala Urmial Padhugappu Sangam v. Union of India allowed the petition and directed the Central Government to fulfil its statutory obligation and notify in the official gazette the constitution of an appropriate Tribunal for the adjudication of the water dispute. 15. Thus, we hold that this court is the ultimate interpreter of the provisions of the Interstate Water Disputes Act, 1956 and has an authority to decide the limits, powers and the jurisdiction of the Tribunal constituted under the Act. This Court has not only the power but obligation to decide as to whether the Tribunal has any jurisdiction or not under the Act, to entertain any interim application till it finally decides the dispute referred to it. There is thus no force in the above argument raised by Dr. Y.S. Chitale. (p. 243) 34. It has been contended by the learned counsel for the plaintiff that the provisions of sections 15Y and 20A of the SEBI do not apply a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete code providing all the reliefs which are sought for by the plaintiff in the present suit. He has contended that the word cancellation used in regulation 44( c ) and ( d ) are much higher than rectification and in respect thereof he has relied upon the definition of the word cancellation and rectification as given by the Advanced Law Lexicon Aiyar s. The relevant portion of the definition read as under : Cancellation. To destroy the force effectiveness, or validity of. To annual, abrogate, or terminate. Defacement or mutilation of instrument. Words of revocation written across instrument. A means whereby a holder discharges a parties liability on an instrument by physically demonstrating on the face of the instrument the intention to discharge, as by writing cancelled across the instrument s face, striking out the aptly signature, or destroying or mutilating the signature on the instrument. As applied to documents of title, the term refers to the act of the bailee voiding a negotiable document upon its surrender by the holder in taking possession of the goods. Rectification. Implies the correctness of an error or removal of defects or imperfections. It implies prior existe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the remedy is not provided under the SEBI Act does not any longer survive and therefore, the same should be rejected. It has been further contended that the argument of the learned counsel for the plaintiffs that the various provisions of the law are required to be interpreted and therefore, this court has jurisdiction as this court is a final authority as to the interpretation of any of the legislation is also without any merits. It is because the various provisions of law are already interpreted by the learned Single Judge and the Division Bench in the case of Shirish Finance Investments (P.) Ltd. ( supra ) and every time the person cannot circumvent an express bar in respect of exclusion of the jurisdiction of the court by contending that certain provisions are required to be interpreted. He has contended that the provisions which are sought to be interpreted in the present case are identical to the provisions which are sought to be invoked before the court in the case of M. Sreenivasulu Reddy ( supra ) and thus the said provisions are also considered and already been interpreted and therefore, the argument that this court has jurisdiction for the purpose of interpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ) obviously the same takes into account also the argument of the learned counsel for the plaintiff because share register will be brought to the original form once the allotment is cancelled and or transfer is freezed and effect thereof is not permitted to be given. 38. Mr. Tulzapurkar learned counsel for defendant No. 4 has thereafter brought to my attention the judgment of the Division Bench of this court in the case of Nagin Mansukhlal Dagli v. Haribhai Manibhai Patel AIR 1980 Bom. 123 and has contended that the form or words in which the relief is couched in is not important as much as what is necessary to see is what substantive relief has been sought. He has relied upon para 10 of the judgment which reads as under : 10. Prayer ( b ) of the plaint, in the guise of a prayer for a mandatory injunction against the defendant to remove himself from the said flat, is in substance no other than a prayer for the recovery of possession of the said flat. Realizing full well that the proper relief to pray for would be a decree or order for possession but at the same time being desirous of bringing the suit in this court and simultaneously not wishing the suit to suffer from a technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause ( a ) can be granted by the board then all other prayers are covered and automatically the plaintiff would get complete relief in the SEBI proceedings. Learned counsel has brought to my attention that though there may not be express right for the individual to go to the board but under regulations 38, 39 of the Takeover Regulations any person can lodge a complaint and under regulation 39 the board has been empowered to give notice and appeal lies therefrom to the Central Government under regulation 46 of the Takeover Regulations. It has been thus contended by the learned counsel for defendant No. 4 that the complete remedy is provided under the Takeover Regulations and therefore, this Court ought not to entertain the present suit. 41. I have considered the rival submissions of the parties and I am of the opinion that the contention of the learned counsel for the plaintiff that irrespective of the fact that there is an express bar conferred under section 15Y read with regulation 20A this court must entertain the present suit and grant necessary relief cannot be accepted. The contention of the learned counsel for the plaintiff that there was a pre-existing common law right un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of sections 15Y and 20A along with the provisions of the Takeover Regulations I have no doubt in my mind that there is an express bar as to the jurisdiction of this court for rectification of the register when it solely based on the contention that the allotment and/or transfer of shares is contrary to the Takeover Regulations. Though it is not necessary still I feel it is important to clarify that when the rectification of the share register is de hors the provisions of the Takeover Regulations or any other provisions of the SEBI Act and rules and regulations made thereunder then the court would certainly have jurisdiction to entertain and try such a suit under section 9 of the CPC. It is because what is barred under sections 15Y and 20A is only those acts which falls either under the said Act or under the regulations framed thereunder. 42. It is not possible to accept the contention of the learned counsel for the plaintiff that the provisions of sections 15Y and 20A should be so read down so as to exclude the cases of rectification of the share register by shareholder. If the provisions of the Act are such so as to cover all eventualities which arises under the statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectification. However, in the light of subsequent amendment to the Regulation the said argument does not survive any further and therefore, the reliance placed by the learned counsel on the aforesaid judgment of the Single Judge and Division Bench would not apply insofar as such finding is concerned in view of the amendment provisions referred to hereinabove. 46. I am therefore of the further opinion that the entire suit is based on the sole ground of violation and/or breach of the Takeover Regulations and no other ground has been invoked for rectification of the Share Register. The Takeover Regulations has been enacted under the SEBI Act, 1922 and the board is empowered to take cognizance of the breach thereof and therefore, the right of the plaintiffs is to complain to the SEBI of such breach and seek necessary remedy. The contention of the learned counsel for the plaintiffs that to merely file complaint with the SEBI is not equivalent to the right of the plaintiffs to file a suit for substantial relief cannot be accepted because the nature of the right conferred by the Take- over Regulations provides for substantial nature of remedy thereunder. The plaintiffs must therefore, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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