2003 (11) TMI 451 - HC - Companies Law

Issues Involved:
1. Maintainability of the writ petition against the Stock Exchange.
2. Territorial jurisdiction of the Madras High Court.
3. Alleged abdication of duty by the Madhya Pradesh Stock Exchange.
4. Disputed facts regarding the valuation and allotment of shares.
5. Alternative remedy available under Section 22A of the Securities Contracts (Regulation) Act, 1956.

Detailed Analysis:

1. Maintainability of the Writ Petition Against the Stock Exchange:
The petitioner argued that the Stock Exchange is an instrumentality of the State and thus amenable to writ jurisdiction under Article 226 of the Constitution of India. The respondent contended that the Stock Exchange is not a public body and does not discharge public duties, making it not amenable to writ jurisdiction. The court referred to various judgments, including Rajendra Rathor v. M.P. Stock Exchange and Mrs. Sejal Rikeeh Dalal v. Stock Exchange, Bombay, which held that Stock Exchanges are amenable to writ jurisdiction due to their public duties. The court concluded that the Stock Exchange falls within the definition of the State under Article 12 of the Constitution of India, making the writ petition maintainable.

2. Territorial Jurisdiction of the Madras High Court:
The respondent argued that the Madras High Court lacks territorial jurisdiction since the Stock Exchange operates in Madhya Pradesh and the appeal should be filed in the Bombay High Court. The petitioner claimed that part of the cause of action arose in Chennai, where the company's registered office is located. The court determined that the cause of action arose within the jurisdiction of the Bombay High Court due to the appeal presented to the Securities Appellate Tribunal in Mumbai. Consequently, the Madras High Court lacks territorial jurisdiction over the matter.

3. Alleged Abdication of Duty by the Madhya Pradesh Stock Exchange:
The petitioner argued that the Stock Exchange's failure to act within the statutory period amounts to abdication of its power, preventing it from passing any order subsequently. The court referred to the Supreme Court's decision in S. Ramanathan v. Union of India, which held that failure to act within the stipulated period does not prohibit the authority from exercising its power. The court concluded that it could only direct the Stock Exchange to consider the petitioner's application on its merits, not grant the writ of mandamus as requested.

4. Disputed Facts Regarding the Valuation and Allotment of Shares:
The respondent raised concerns about discrepancies in the valuation and allotment of shares, claiming that the petitioner adopted unfair means detrimental to shareholders' interests. The court noted that such issues involve complicated questions of fact that can only be resolved by the concerned authorities with the necessary expertise. Therefore, the court held that a writ of mandamus for listing of shares cannot be issued in this case.

5. Alternative Remedy Available Under Section 22A of the Securities Contracts (Regulation) Act, 1956:
The respondent argued that the petitioner should have exhausted the alternative remedy available under Section 22A by approaching the Bombay High Court after the Securities Appellate Tribunal returned the appeal papers. The petitioner contended that the return of papers does not amount to an order or decision, and thus approached the Madras High Court. The court held that the petitioner should have approached the Bombay High Court, as the cause of action arose there due to the appeal presented to the Tribunal.

Conclusion:
The court dismissed the writ petition, stating that it lacked territorial jurisdiction and that the petitioner should have approached the appropriate forum. The court also emphasized that the Stock Exchange must consider the petitioner's application if the necessary particulars are provided. If the Stock Exchange fails to act after receiving the required information, the petitioner can approach the appropriate forum for redressal.

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