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2022 (9) TMI 1580 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI.Eligibility to be a resolution applicant in view of Section 29A(f) of the Insolvency and Bankruptcy Code, 2016 - proceedings under Section 29-A(f) of the Code has been carried out against the Appellant on the basis of notice of BSE dated 28.03.2018 - falls under the scope of Section 11(4) of the SEBI Act, 1992 - opportunity of hearing not provided - violation of principle of natural justice (Audi alterm partem) and is also violation of Section 11(4) of the SEBI Act, 1992. HELD THAT:- Section 29(A)(f) of the Code provides that “A person not eligible to be resolution applicant: (f) is prohibited by the securities and exchange board of India from trading in securities or accessing the securities markets.” The Appellant in this case has been categorically debarred for the reasons that it failed to comply with the mandatory direction issued by the SEBI in the circular dated 10.10.2016 and 01.08.2017 by which the Appellant was repeatedly cautioned that in case, one of the option is not exercised within the time line prescribed, the necessary action shall be taken as prescribed in clause 6 of the circular dated 10.10.2016. The argument of Counsel for the Appellant not impressed upon that the SEBI was required to follow the provisions of Section 11(4) of the Act before initiating the action in terms of circular dated 10.10.2016 and 01.08.2017 as the said action has been taken in terms of Section 11(1) of the Act. Reference could be had to be the decision of the Hon’ble Supreme Court in the case of Sahara India Real Estate Corporation Limited & Ors. [2012 (9) TMI 374 - SUPREME COURT] in which it was held that sub-section (2) is subservient to sub-section (1) of section 11. Therefore both sub-sections (2A) and (4) will inferentially be subservient to sub-section (1) of section 11 of the SEBI Act. Therefore, the obligation cast on SEBI, to protect the interest of investors in securities, to promote the development of the securities market, and to regulate the securities market " by such measure as it thinks fit", remains undiluted even by subsections (2A) and (4) of Section 11 of the SEBI Act. Counsel for the Appellant has submitted that there is no delegation of power by SEBI to BSE which is required to be done in accordance with Section 19 of the Act but in this case, it is opined that BSE has passed on the information to the Appellant by the impugned notice that it had been declared as non-compliant of Section 29(A) (f) of the Code in view of its act and conduct considered by the SEBI in pursuance of the circulars dated 10.10.2016 and 01.08.2017 and has exercised power under Section 11(1) of the Act. It is also a fact that the Appellant had admitted that it is barred in the list of BSE from accessing the security market for 10 years and when the resolution plan was submitted on 28.01.2019 and the Appellant was ineligible in view of Section 29(A) (f) of the Code. The impugned order does not require any interference as there is no merit in these appeals and hence, the same are hereby dismissed.
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