2002 (7) TMI 567 - HC - Companies Law

Issues Involved:
1. Legality of the transfer of 9.76 lakh shares.
2. Maintainability of the writ petition.
3. Availability of an alternative remedy under section 111A of the Companies Act, 1956.
4. Delay and laches in filing the writ petition.
5. Abuse of process of law by the petitioner.
6. Jurisdiction of the High Court in contractual disputes between private individuals.
7. Involvement of SEBI and the applicability of SEBI Regulations.
8. Apology and withdrawal of certain grounds of appeal.

Detailed Analysis:

1. Legality of the Transfer of 9.76 Lakh Shares:
The appellant-writ petitioner challenged the transfer of 9.76 lakh shares to respondents 4 to 8, claiming it violated Regulation 10 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The respondents argued that SEBI had already verified the transfer's compliance with the regulations and found no violations. The court noted that the petitioner did not approach SEBI with any complaint, and SEBI had independently verified the transfer's legality.

2. Maintainability of the Writ Petition:
The respondents contended that the writ petition was not maintainable, suggesting that the petitioner should have initiated proceedings under section 111A of the Companies Act, 1956. The court agreed, noting that the petitioner had already filed C.P. No. 78 of 2000 before the CLB under sections 397 and 398 of the Act, which he later withdrew. The court emphasized that the appropriate forum for such disputes was the CLB, not a writ petition under Article 226 of the Constitution of India.

3. Availability of an Alternative Remedy Under Section 111A of the Companies Act, 1956:
The court highlighted that section 111A provides a specific remedy for rectification of the register of members. The petitioner had an effective alternative remedy available through the CLB, which he chose not to pursue. The court reiterated that the writ petition was not maintainable due to the availability of this alternative remedy.

4. Delay and Laches in Filing the Writ Petition:
The court observed that the transfer of shares occurred in 1997, but the petitioner did not take any action until 2000. The learned single judge dismissed the writ petition on the grounds of delay and laches, a recognized basis for refusing discretionary relief. The court found no justification for the petitioner's delay in seeking relief.

5. Abuse of Process of Law by the Petitioner:
The court noted that the petitioner had been involved in multiple litigations against the respondents, including filing complaints with SEBI, company petitions before the CLB, and criminal complaints. The court viewed the present writ petition as an abuse of process of law, aimed at harassing the respondents and prolonging the dispute.

6. Jurisdiction of the High Court in Contractual Disputes Between Private Individuals:
The court held that it would not interpret the terms and conditions of a private contract between the petitioner and respondents 4 to 8. The dispute involved questions of fact that were not suitable for resolution through a writ petition. The court emphasized that such matters should be resolved through the appropriate forums provided under the Companies Act.

7. Involvement of SEBI and the Applicability of SEBI Regulations:
The court noted that SEBI had already examined the transfer of shares and found no violations of the SEBI Regulations. The petitioner's failure to approach SEBI with any complaints further weakened his case. The court concluded that the respondents had complied with all relevant SEBI regulations.

8. Apology and Withdrawal of Certain Grounds of Appeal:
During the hearing, the appellant's counsel tendered an apology and requested the deletion of certain grounds of appeal that cast aspersions on the learned single judge. The court accepted the apology and deleted the grounds in question.

Conclusion:
The court dismissed the writ appeal, finding that the petitioner had an effective alternative remedy, was guilty of delay and laches, and had abused the process of law. The court refrained from awarding exemplary costs but cautioned the petitioner against engaging in frivolous and vexatious litigation in the future.

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