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Mr. Bharatbhai Baldevbhai and Ors. Versus Securities and Exchange Board of India and Ors.

2009 (10) TMI 957 - SECURITIES APPELLATE TRIBUNAL, MUMBAI

Appeal no. 142 of 2008 - Dated:- 6-10-2009 - N.K. Sodhi and Samar Ray, JJ. JUDGMENT N.K. Sodhi, 1. Whether the appellants are persons aggrieved within the meaning of Section 15T of the Securities and Exchange Board of India Act, 1992 (hereinafter called the Act) is the primary question which arises for our consideration in this appeal. 2. GHCL Ltd. (hereinafter called the company) is a public limited company whose shares are listed on the National Stock Exchange of India Ltd., the Bombay Stock E .....

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elling or dealing in the shares of the company directly or indirectly. This order was an ex-parte order passed on April 25, 2007 under Sections 11(4) and 11B of the Act. Respondents No. 2 to 5 alongwith others were subsequently given a personal hearing by the whole time member of the Board. Investigations have since been completed and by order dated October 22, 2008, adjudication proceedings have been initiated, among others, against Respondents No. 2 to 5 which are pending. Since adjudication p .....

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ore, the appeal was not maintainable under Section 15T of the Act. The relevant part of Section 15T reads as under: Appeal to the Securities Appellate Tribunal - (1) Save as provided in Sub-section (2), any person aggrieved: (a) by an order of the Board... (b) by an order made by an adjudicating officer under this Act, may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter. (2) to (6).... A reading of the aforesaid provision makes it clear that only a "per .....

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busy body of meddlesome interlopers. Persons in the last category were said to be those who interfere in things which do not concern them and act in the name of Pro Bono Publico though they have no interest of the public or even of their own to protect. The learned judges further observed that the distinction between persons aggrieved and strangers was real and laid down the following broad tests in this regard: Whether the applicant is a person whose legal right has been infringed? Has he suffe .....

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r inconvenience suffered by him in common with the rest of the public? Was he entitled to object and be heard by the authority before it took the impugned action? If so, was he prejudicially affected in the exercise of that right by the act of usurpation of jurisdiction on the part of the authority? Is the statute, in context of which the scope of the words "person aggrieved" is being considered, a social welfare measure designated to lay down ethical or professional standards of condu .....

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e delinquent entities like Respondents No. 2 to 5 ought to be restrained from accessing the capital market till such time the investigations are over and subsequently on the completion of the investigations it was of the view that adjudication proceedings should be initiated against them. The Board was fully justified in taking such a view keeping in view the facts as they emerged from the investigations. The appellants cannot be allowed to interfere with such regulatory matters which is the fun .....

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ession having regard to the fact that the Board while taking disciplinary proceedings against the so called delinquent entities deals with their private rights and with particular individuals/entities and strangers like the appellants have no concern with such proceedings. The appellants could be aggrieved by the impugned order only if that order is materially adverse to them. They are required to establish that they have been denied or deprived of something to which they are legally entitled in .....

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in upholding the preliminary objection raised on behalf of the Board which we hereby do. 4. Before concluding, we may notice the judgments relied upon by the learned Counsel for the appellants. He cited Bar Council of Maharashtra v. M.V. Dabholkar and Ors. (1975) 2 SCC 702 to contend that the words "person aggrieved" should be given a wide meaning so as to entitle the appellants to maintain the present appeal. We have carefully gone through this judgment and find that it does not adva .....

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onal ethics. In this context, their Lordships made the following observations: The words "person aggrieved" in Sections 37 and 38 of the Act are of wide import and should not be subjected to a restricted interpretation of possession or denial of legal rights or burdens of financial interests. The test is whether the words "person aggrieved" include "a person who has a genuine grievance because an order has been made which prejudicially affects his interests". It has .....

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