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TMI Blog2018 (8) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit, then, whether SEBI is justified in disposing of that complaint by merely recording that the Trust is not a subsidiary of the listed company and hence no disclosures were required to be made under Clause 36 of the Listing Agreement, is the basic question raised in this appeal. 2. Specific case of the appellants in the complaint filed before SEBI was that Reliance Industries Ltd. (RIL) a listed company had failed to disclose that it had acquired indirect control over Network 18 Media & Investments Ltd. (NW18) and TV 18 Broadcast Ltd. (TV18) through Independent Media Trust (IMT), a Trust established on 22/11/2011 for the exclusive benefit of RIL. The complaint was based on the agreements entered into by IMT with other entities, namely, Single Unit Agreement (SUA) dated 23/11/2011 and the Investment Agreement dated 27/2/2012 ('ZOCD Agreement' for convenience). Apart from the above, reliance was also placed on the decision of the Competition Commission of India dated 28/5/2012 wherein it was specifically held that subscribing to the Zero Coupon, Optionally & Fully Convertible Debentures (ZOCDs) by IMT under the ZOCD Agreement dated 27/2/2012 amounts to acquiring indirect contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Agreement, SEBI has declined to entertain the complaint filed by the appellants, solely on ground that IMT was not a subsidiary of RIL and therefore, no disclosures were required to be made by RIL under Clause 36 of the Listing Agreement. In these circumstances, the impugned decision which vitally affects the rights and obligations of the appellants as shareholders of NW18 would be a quasi judicial decision and not an administrative decision. Accordingly, argument of the respondents that the impugned decision of SEBI on the SCORES platform is administrative in nature and hence appeal against that decision is not maintainable before this Tribunal, cannot be accepted. 7. Reliance placed by the respondents on the Apex Court decision in case of NSDL (supra) is misplaced. In that case, general administrative circular issued by SEBI was challenged before this Tribunal, whereas, in the present case, appellants have challenged the quasi judicial decision of SEBI by which the complaint filed by the appellants has been disposed of by misinterpreting Clause 36 of the Listing Agreement. Clause 36 of the Listing Agreement could not be interpreted administratively and had to be interpreted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the holding companies have been declared as promoters of NW18 & TV18. It is equally interesting to note that like the SUA dated 23/11/2011, even the ZOCD Agreement was signed by Mr. Rahgav Bahl as authorized representative of all the parties to the ZOCD Agreement except his wife who has signed on her own behalf. Thus, Mr. Raghav Bahl and his wife were the only signatories to the ZOCD Agreement under which IMT could exercise indirect control over NW18 at any time IMT deemed it fit and proper. (d) On 28/5/2012, the Competition Commission of India passed an order wherein it is specifically held that by subscribing to the ZOCDs under the ZOCD Agreement dated 27/2/2012, IMT would acquire control over the holding companies and consequently acquire indirect control over NW18 & TV18, however, such acquisition of indirect control would not violate the provisions contained in the Competition Act, 2002. (e) On 24/3/2014 appellants filed a complaint before the National Stock Exchange of India Ltd. (NSE) alleging that RIL failed to disclose that it had acquired indirect control over NW18 & TV18 through IMT and thereby violated Clause 36 of the Listing Agreement. In support of the above, app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to agitate in Appeal No.55 of 2015 the issues determined by SEBI in its communication dated 9/2/2015. This Tribunal declined to consider any of the issues determined by SEBI in its communication dated 9/2/2015 and proceeded to consider the sole question raised in Appeal No.55 of 2015 relating to the approval given by SEBI to the open offer price at Rs. 41.04 per share. (m) However, while considering the approval given by SEBI to the open offer price of NW18, it was noticed that the open offer price was based on the clauses contained in the ZOCD Agreement dated 27/2/2012. Accordingly, this Tribunal perused the clauses contained in the ZOCD Agreement and arrived at a prima facie conclusion that on execution of the ZOCD Agreement, control over NW18 indirectly stood divested in favour of IMT. It was also noticed by this Tribunal that SEBI had issued the communication dated 9/2/2015 without considering the clauses contained in the ZOCD Agreement. In these circumstances, irrespective of the fact that the appellants had not challenged the decision of SEBI dated 9/2/2015, this Tribunal in the order passed in Appeal No.55 of 2015 on 13/4/2016 deemed it fit, in public interest, to direct S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /6/2014 alleging that RIL had violated Clause 36 of the Listing Agreement by failing to disclose that it had acquired indirect control over NW18 through IMT was rejected by SEBI on 9/2/2015 and that decision has not been challenged by the appellants and hence the said decision of SEBI dated 9/2/2015 has attained finality. (b) In the order passed in Appeal No.55 of 2015 on 13/4/2016 this Tribunal has specifically held that the appellants without amending Appeal No.55 of 2015 to challenge the decision of SEBI dated 9/2/2015 cannot advance arguments against the said decision of SEBI dated 9/2/2015. Therefore, the appellants who are guilty of not challenging the decision of SEBI dated 9/2/2015 cannot seek to re-agitate the very same issue by filing the present appeal. (c) Admittedly, appeal filed by the appellants against the decision of this Tribunal dated 13/4/2016 has been dismissed by the Apex Court on 27/3/2017. Thus the decision of this Tribunal that the appellants cannot agitate the issues covered under the decision of SEBI dated 9/2/2015 has attained finality and therefore, the appellants cannot re-agitate the very same issue by filing the present appeal. (d) It is only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I as per the directions given by this Tribunal on 13/4/2016 has reconsidered the issue and by an affidavit dated 10/10/2016 submitted a report stating that even on re-examination SEBI finds that there was no divesting of control over NW18 in favour of IMT on account of subscribing to the ZOCDs under the ZOCD Agreement. It is not in dispute that on re-examination of the issue, SEBI has not passed any fresh order/decision but only submitted a report by way of an affidavit. 16. From the aforesaid facts, it is clear that in view of the decision of this Tribunal dated 13/4/2016 in Appeal No.55 of 2015, it cannot be said that the decision of SEBI dated 9/2/2015 has attained finality. On the contrary, pursuant to the directions given by this Tribunal, in public interest, on 13/4/2016, it was obligatory on part of SEBI to reconsider the issue decided on 9/2/2015. Admittedly, after reconsidering the issue, SEBI has not passed any quasi judicial order but has only filed an affidavit on the issue raised by the appellants. In these circumstances, while setting aside the impugned decision of SEBI dated 9/1/2017, we deem it proper to direct SEBI to decide afresh the question as to whether RIL v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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