TMI Blog2017 (11) TMI 1802X X X X Extracts X X X X X X X X Extracts X X X X ..... ck 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. In the present case, there appears to be public shareholders and such shareholders are required to have an exit opportunity. In the facts of the present case, it appears that, the company has obtained the prior approval of the Board of Directors of the company in its meeting to apply for permission to delist from the Stock Exchange. It has received the prior approval of the shareholders of the company by special resolution passed through postal ballot, after disclosure of all material facts in the explanatory statement sent to the shareholders in relation to such resolution. The special resolution does not stand defeated by reason of the proviso to Regulation 8(1)(b) being satisfied. The company has made an application to the concerned Stock Exchange for in principle approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned decision with its own acting as an appellate authority. Third issue is answered in the negative and against the petitioners. - W.P. No. 523 of 2017 - - - Dated:- 16-11-2017 - Debangsu Basak, J. For the Petitioners: Mr. Anindya Kr. Mitra, Mr. Abhrajit Mitra, Mr. Reetobroto Mitra, Mr. Soumya Roy Chowdhury, Mr. Sarvapriya Mukherjee, Mr. Sandip Das Gupta, For the Respondents: Mr. Rupak Ghosh, Advocate Debangsu Basak, The writ petitioners have challenged the decision of the Calcutta Stock Exchange, refusing to grant in principle approval for delisting of the equity shares of the first petitioner, as contained in the writing dated April 21, 2017 issued by the Calcutta Stock Exchange. The writ petitioners have also sought in principle approval for delisting of the equity shares of the first petitioner as made in the application dated October 7, 2016. Learned Senior Advocate appearing for the writ petitioners has submitted that, the equity shares of the first writ petitioner is listed with the Calcutta Stock Exchange. Such shares are infrequently traded. The first petitioner has decided to delist its equity shares from the Calcutta Stock Exchange. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Customs (Port) Ors.) ) and the judgment and order dated August 16, 2017 passed in W.P. No. 21465 (W) of 2017 (Balaji Polytex Industries Pvt. Ltd. v. The Union of India Ors.) he has submitted that, exclusion of writ jurisdiction due to availability of alternative remedy is a rule of discretion and not one of compulsion. He has submitted that, therefore, the reliefs as sought for by the petitioners be granted. Learned Advocate appearing for the respondent has questioned the maintainability of the writ petition. He has submitted that, the petitioners have statutory alternative remedy available. He has referred to various provisions of the Securities Contracts (Regulation) Act, 1956 particularly Sections 31, 21A, 23L and 23F of the Act of 1956 in support of his contention that, the impugned order is appealable to Securities Appellate Tribunal. He has relied upon two unreported decisions of the Securities Appellate Tribunal being Appeal No. 126 of 2010 dated September 15, 2010 (Bharat Jayantilal Patel v. Securities and Exchange Board of India) and Appeal No. 86 of 2011 (HB Stockholdings Limited v. Securities and Exchange Board of India and Ors.). Relying upon 2011 Volu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d all the investor grievances, such claims are incorrect. He has referred to the redressal of investor grievance through SEBI Complaints Redress System (SCORES) platform. He has submitted that, there are a number of complaints pending in such platform against the first petitioner. He has referred to the correspondence exchanged between the parties in this regard. He has also submitted that, exemptions are provided in such provisions, such exemptions are not attracted in the facts of the present case. He has submitted that, in the event, the Court is pleased to find that the writ petition is maintainable, the Court should allow the respondents to file affidavits before disposing of the writ petition. The following issues have arisen for consideration in the present writ petition:- (i) Is a decision of a Stock Exchange refusing to grant in principle approval to an application for voluntary delisting of shares from such Stock Exchange appealable under the provisions of Securities Contracts (Regulation) Act, 1956? (ii) Is the writ petition maintainable? (iii) Is the impugned decision of the Calcutta Stock Exchange without jurisdiction? (iv) To what reliefs, if any, are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeding one month. Section 23L of the Act of 1956 provides for appeals to the Securities Appellate Tribunal. Section 23L is as follows:- 23L. Appeal to Securities Appellate Tribunal.-- (1) Any person aggrieved, by the order or decision of the recognised stock exchange or the adjudicating officer or any order made by the Securities and Exchange Board of India under section 4B [or sub-section (3) of section 23-I], may prefer an appeal before the Securities Appellate Tribunal and the provisions of sections 22B, 22C, 22D and 22E of this Act, shall apply, as far as may be, to such appeals. (2) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order or decision is received by the appellant and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the said period of forty- five days if it is satisfied that there was sufficient cause for not filing it within that period. (3) On receipt of an appeal under sub-section (1), the Securities Appellate Tribunal may, after giving the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant to a listed company or an aggrieved investor while there is no such limitation in Section 23L. Section 23L allows any person who can substantiate that it is aggrieved by the order or decision can prefer the appeal. The time limit to prefer the appeal in the two provisions is different. Section 21A(2) allows 15 days time to prefer the appeal with a provision for considering the delay for a further period not exceeding one month. Section 23L allows the appeal to be preferred within 45 days with the Securities Appellate Tribunal being empowered to condone any quantum of delay in filing the appeal on sufficient cause. Section 21A(2) relates to decisions of the recognized Stock Exchange taken in the process for delisting of the shares. It would include decisions taken in respect of voluntary as well as compulsory delisting. Section 23L on the other hand relates to an appeal in respect of an order or decision of a recognised Stock Exchange or an adjudicating officer or by SEBI passed or taken under Section 4B or Section 23I(3) of the Act of 1956. These differences allow one to infer that they operate on different fields. Provisions of Section 23L are not attracted to an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been contended on behalf of the petitioners that, the exit opportunity contemplated under Chapter IV will become applicable only after the receipt of the in principle approval for delisting. Therefore, the company cannot be said to have defaulted in complying with Chapter IV of the delisting Regulations of 2009, at the present moment in the facts of the present case. According to the petitioners, the Calcutta Stock Exchange has exercised jurisdiction erroneously and therefore, notwithstanding the statutory appeal, the writ petition should be entertained. Notwithstanding the availability of alternative remedy including a statutory alternative remedy of appeal, a writ petition has been held to be maintainable so long, the impugned action is substantiated to be without jurisdiction, non-speaking, or is perverse or tainted with mala fides. Simplicitor on the ground that there exists, an alternative remedy, a writ petition cannot be said to be not maintainable. Harbanslal Sahnia Anr. (supra) has held that, the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. It has recognized that, a writ pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statutes or regulations governing the process of delisting is under challenge. In the present case, the Stock Exchange is required by law to decide an application for voluntary delisting. A Stock Exchange has the jurisdiction to do so. It has taken a decision which is impugned in the present writ petition. The decision gives reasons. The Stock Exchange has claimed to have consulted with Securities and Exchange Board of India prior to the petitioners being informed with the impugned decision. It cannot be said that, the impugned decision is vitiated by the breach of the principles of natural justice. It is within the domain of the Calcutta Stock Exchange to decide on the application for grant of voluntary delisting. The petitioners may have a case to argue that, the decision returned in the impugned order cannot be sustained on a better appreciation of the materials produced for consideration by the Calcutta Stock Exchange. Such a scenario does not give rise to a lack of jurisdiction of the Calcutta Stock Exchange to have returned the impugned decision. In the facts of the present case, it cannot be said that, the Calcutta Stock Exchange has acted beyond the jurisdiction veste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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