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TMI Blog2017 (11) TMI 1802X X X X Extracts X X X X X X X X Extracts X X X X ..... res from the Calcutta Stock Exchange. It had applied on October 7, 2016 for such purpose. He has referred to the various correspondence exchanged between the petitioners and the Calcutta Stock Exchange and has submitted that, the petitioners had answered every query raised by the Calcutta Stock Exchange. He has referred to the provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 and submitted that, a stock exchange cannot withhold grant of in principle approval, unfairly. He has submitted that, the Regulations of 2009 notices few grounds for refusal. None of such grounds are attracted in the facts of the present case. Therefore, the Calcutta Stock Exchange should have granted the in principle approval. He has referred to the grounds of refusal as contained in the impugned letter dated April 21, 2017. He has submitted that, such grounds are without any basis. He has contended that, the first petitioner is seeking to delist its equity shares from the Calcutta Stock Exchange. No outsider is acquiring or taking over the first petitioner. The provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia and Ors.). Relying upon 2011 Volume 4 Calcutta High Court Notes page 91 (Rose Valley Real Estates and Constructions Ltd v. Securities and Exchange Board of India and others) he has submitted that, the petitioners having statutory alternative remedy of an appeal, the writ petition should not be entertained. Referring to the merits of the matter, learned advocate for the respondents has submitted that, the first writ petitioner had applied to the Calcutta Stock Exchange identifying a legal entity as an acquirer. In such circumstances, the provisions of Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 as amended along with the provisions of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 as amended would apply. He has referred to the application made by the first writ petitioner to the Calcutta Stock Exchange and has submitted that, the first writ petitioner having identified a legal entity as an acquirer, and the first writ petitioner not having a promoter, the provisions of Regulation 5A of the Takeover Regulations and Regulation 8 of the Delisting Regulations applies. He has referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what reliefs, if any, are the parties entitled to? In the present case, the impugned decision of the Calcutta Stock Exchange in refusing to grant in principle approval to delist the equity shares of the first petitioner has been contended to be appealable under Section 21A of the Securities Contracts (Regulation) Act, 1956. Provisions of Section 23L of the Act of 1956 have also been relied upon to suggest that, appeal to the Security Appellate Tribunal would lie against such a decision of a Stock Exchange. The first petitioner had applied for delisting of its equity shares. The delisting process is, therefore, voluntary and it emanates from an entity when it seeks its shares to be delisted in contradiction to a Stock Exchange directing the entity to delist its shares. The second scenario is considered as compulsory delisting of shares. Delisting of shares is governed by the provisions of Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009. Chapter III of such Regulations of 2009 deals with voluntary delisting. Chapter V deals with compulsory delisting. It has been contended on behalf of the petitioners that, the provisions of Securities Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. (4) The Securities Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned adjudicating officer. (5) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of receipt of the appeal." Section 21A of the Act of 1956 does not distinguish between a voluntary and a compulsory delisting of securities. It empowers the Stock Exchange to delist the securities, after recording the reasons, on any of the ground as may be prescribed under the Act of 1956. Power to delist a share as provided in Section 21A encompasses both voluntary and compulsory. Voluntary and compulsory are two manners and methods of delisting. Both processes results in delisting of the shares. Once the power to delist is vested it cannot be gain said that, such a power is available only in respect of one of the manner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal against the decisions of the Stock Exchange taken in the delisting process. Such a decision would attract Section 21A(2) for the purpose of appeal. In the present case, the impugned writing of the Calcutta Stock Exchange contains its decision to refuse in principle approval of voluntary delisting of shares. The same is appealable under Section 21A(2). The first issue is answered in the affirmative by holding that, a decision of a Stock Exchange refusing to grant in principle approval to an application for voluntary delisting is appealable under Section 21A(2) of the Securities Contracts (Regulation) Act, 1956. Section 31 of the Act of 1956 empowers the Securities and Exchange Board of India to make regulations. In exercise of powers, inter alia, under Section 21A and Section 31of the Act of 1956, the Securities and Exchange Board of India has made the Delisting Regulations of 2009. Chapter III of the Delisting Regulations, 2009 deals with voluntary delisting while Chapter V deals with compulsory delisting. Regulation 5 of the Regulations of 2009 allows a company to delist its equity shares provided that, all public shareholders of such company are given an exit opportunity i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is maintainable notwithstanding the availability of an alternative remedy, where the writ petition seeks enforcement of any fundamental right, where there is failure of principles of natural justice, where the orders of proceedings are wholly without jurisdiction and where the vires of an Act is under challenge. Such view has been followed in Jaju Petrochemicals Pvt. Ltd. & Anr. (supra) and Balaji Polytex Industries Pvt. Ltd. (supra). It has been contended on behalf of the petitioners that, the impugned order of the Calcutta Stock Exchange is without jurisdiction as it had failed to act in accordance with the Delisting Regulations of 2009. Reliance has been placed on Ram Nath Mehra & Ors. (supra) in support of the contention that, where a statutory authority fails to proceed in accordance with the statutes or the regulations, such a failure is liable to be struck down as it was beyond jurisdiction. Failure to sanction a building plan after the claim of compliance of all formalities by owner of a portion of a premise was under consideration in Ram Nath Mehra & Ors. (supra) in the context of a requirement of Kolkata Municipal Corporation on the owner to submit No Objection Certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law. The impugned decision of the Calcutta Stock Exchange is amenable to appeal under Section 21A(2) of the Securities Contracts (Regulation) Act, 1956. The petitioners, therefore, have a statutory alternative remedy available to itself. The petitioners would be better placed to ventilate their grievance that, the materials produced before the Calcutta Stock Exchange were not appreciated correctly and that, a different view as that returned in the impugned decision is plausible and ought to be taken before the appellate authority. A Writ Court need not undertake the reappreciation of the evidence as an appellate authority and substitute the impugned decision with its own acting as an appellate authority. In view of the discussions above, the third issue is answered in the negative and against the petitioners. Since the impugned order is appealable and the petitioners have statutory alternative remedy available and since I am not minded to interfere in the present writ petition, the merits of the case and the rival contentions of the parties need not be entered into. It is clarified that, any observations made on the merits of the matter was for the purpose of adjudicating wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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