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2012 (4) TMI 753

er 1. The appellant before us is aggrieved by the order dated March 31, 2011 passed by the whole time member of the Securities and Exchange Board of India (for short the Board) disposing of a complaint of the appellant. Allegation of the appellant before the Board was that respondent 2, its promoters and directors alongwith its subsidiary companies have played fraud on the shareholders of the company by issuing preferential warrants and underlying shares thereby contravening various regulatory provisions. The appellant claims to be the largest shareholder of respondent 2 in the category of public shareholders with current shareholding of the appellant said to be 24.98 per cent of the expanded issued and paid up capital. The Board looked int .....

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Exchange Board of India Act, 1992 and, therefore, the present appeal was not maintainable. We heard the counsel for the parties at some length on this objection. During the course of the arguments, it was put to Shri Shiraz Rustomjee learned counsel for respondent no. 1 whether the respondent Board would like to consider the memorandum of appeal and the response filed thereto by the respondents before this Tribunal as their respective representations and pass a reasoned order. This suggestion was made keeping in view the fact that the impugned communication does not contain reasons. The learned counsel for the respondent Board has sought instructions and states that, in the peculiar facts and circumstances of the present case, the responden .....

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erever violation of regulatory framework is noticed. The orders issued or decisions taken while disposing of such complaints and not affecting rights of the parties are not appealable under Section 15T of the Act. In support of his submission, learned counsel for the Board relied on the following decisions :- 1. Northern Projects Limited vs. Adjudicating Officer (Appeal no. 55 of 2011 decided on 29.8.2011). (SAT) 2. B.P. Kanani vs. SEBI (Appeal no. 6 of 2000 decided on 31.8.2000). (SAT) 3. Jassbhai Motibhai Desai vs. Roshan Kumar AIR 1976 SC 578. 4. Adi Pherozshah Gandhi vs. H.M. Seervai (1970) 2 SCC 484. 5. Harinarayan G. Bajaj vs. SAT (2003) 42 SCL 548 Bom. (HC) 3. Mr. P.N. Modi, learned counsel for respondent 2 supported the stand taken .....

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orum shopping, a practice that needs to be curbed. 4. Mr. E.P. Bharucha, learned senior counsel appearing for the appellant, strongly argued in favour of the maintenance of appeal stating that the appellant is holding as much as 24.9 per cent shares in the company and is substantially interested in the affairs of the company. The appellant is neither a busy body of meddlesome interloper nor acting in the name of pro bono publico. The impugned order is affecting the rights of the appellant. The Board has given its findings in the impugned order and thus, it becomes an appealable order. In support of his contention, learned senior counsel relied on the order passed by this Tribunal in the case of National Securities Depository Limited (Appeal .....

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ficer under this Act, may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter. (2) No appeal shall lie to the Securities Appellate Tribunal from an order made- (a) by the Board on and after the commencement of the Securities Laws (Second Amendment) Act, 1999; (b) by an adjudicating officer, with the consent of the parties. The words "an order" are not defined in the Act. Black's Law Dictionary (Sixth Edition) defines the word "order" to mean " a mandate; precept; command or direction authoritatively given; rule or regulation; direction of a court or judge made or entered in the writing, and not included in a judgment which determines some point or directs some step in proceeding .....

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dia Limited, referred to by the learned senior counsel for the appellant, are of no help to him. After the NSDL order, this Tribunal in the case of Bharat Jayantilal Patel vs. SEBI (Appeal no. 126 of 2010 decided on September 15, 2010) has categorically held that the words "an order" appearing in Section 15T are comprehensive enough to include every order or decision taken by the Board which adversely affect the rights of the parties (emphasis supplied). It has been categorically stated in the said order that procedural orders which do not affect the substantive rights of the parties are not appealable. Similarly, in case of Gammon India Limited the appeal was preferred not by the complainant but by the company against whom action .....

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r within the meaning of Section 15T of the Act. We have also noted that this is not a case where the appellant is without a remedy. The appellant is already pursuing its grievance on the same issue in its petition filed before the Company Law Board which is still under consideration. The appellant has approached Delhi High Court also on the same set of allegations and the suit filed by it against the respondents was dismissed by the Court. 7. We, therefore, uphold the preliminary objection raised by the respondents and hold that the appeal is not maintainable under Section 15T of the Act against the impugned order. Since we are rejecting the appeal on the preliminary objection raised by the respondents, we are not going into the merits of t .....

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