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2013 (1) TMI 360 - HC - Companies LawWrit filed in public interest by an Advocate practicing in this Court - questioning the functioning of the Tribunal without the Presiding Officer - Held that - Public interest litigation affecting the administration of justice, at the instance of the Advocates practicing in the court/fora and representing litigants before that court/fora can be entertained in as much as those lawyers would have locus to the extent of being directly affected by the functioning of the said courts/foras. However the petitioner herein who is represented through another counsel who is registered with the Bar Council of Rajasthan and has given the address of his Jaipur office also are indeed strangers and not concerned with the Tribunal qua functioning whereof grievance has been made. Therfore not inclined to entertain the present petition, which appears to be for the benefit of persons interested in delaying the proceedings before the Tribunal, rather than in public interest. The reliefs claimed in this petition, aimed at bringing the functioning of the Tribunal to a standstill to be in public interest. Thus following guidelines in relation to public interest litigations as stated in Guruvayoor Devaswom Managing Committee v. C.K. Rajan 2003 (8) TMI 470 - SUPREME COURT the present is not a fit case for being entertained any further, in public interest.
Issues Involved:
1. Legality of the functioning of the Securities Appellate Tribunal without a Presiding Officer. 2. Validity of the Ministry of Finance's order dated 5th December 2011. 3. Qualifications and experience required for adjudicating intricate questions of law. 4. Timeliness and inaction in the appointment of the Presiding Officer. 5. Validity of the selection process of a Tribunal member in the absence of a Presiding Officer. 6. Alleged illegal preference towards civil servants in Tribunal appointments. 7. Locus standi of the petitioner to file the writ petition. Issue-wise Detailed Analysis: 1. Legality of the functioning of the Securities Appellate Tribunal without a Presiding Officer: The petitioner argued that the Securities Appellate Tribunal (SAT) has been functioning without a Presiding Officer since 28th November 2011, which is illegal. The Ministry of Finance, treating the absence as temporary, allowed the Tribunal to be presided over by one of the technical members. The petitioner contended that this arrangement is not in accordance with the SEBI Act and cited various judgments to support this claim. 2. Validity of the Ministry of Finance's order dated 5th December 2011: The petitioner challenged the Ministry of Finance's order dated 5th December 2011, which allowed the Tribunal to function without a Presiding Officer, arguing that it is ultra vires the SEBI Act. The petitioner sought the quashing of this order and the declaration of Rule 5(2) of the Securities Appellate Tribunal (Procedure) Rules, 2000 as unconstitutional. 3. Qualifications and experience required for adjudicating intricate questions of law: The petitioner asserted that the cases before the Tribunal involve intricate questions of law that require adjudication by a person with wide adjudicatory experience and qualifications, which the current members of the Tribunal lack. This emphasizes the need for a Presiding Officer with the requisite legal expertise. 4. Timeliness and inaction in the appointment of the Presiding Officer: The petitioner argued that the search for a new Presiding Officer should have been initiated well in advance of the previous officer's retirement to avoid the current situation. The petition criticized the ongoing inaction in appointing a new Presiding Officer. 5. Validity of the selection process of a Tribunal member in the absence of a Presiding Officer: The petitioner contended that the absence of a Presiding Officer vitiates the process of selecting a new member for the Tribunal. The petitioner argued that an officiating Presiding Officer cannot replace the role of a Presiding Officer in the Selection Committee, rendering the selection process invalid. 6. Alleged illegal preference towards civil servants in Tribunal appointments: The petitioner alleged that civil servants are being given illegal preference in the appointment as members of the Tribunal, citing the case of R. Gandhi to support this claim. 7. Locus standi of the petitioner to file the writ petition: The court questioned the locus standi of the petitioner, an Advocate practicing in the Delhi High Court, to file a public interest litigation concerning the functioning of a Tribunal in Mumbai. The petitioner admitted not practicing before the Tribunal but argued that as an Advocate, she is entitled to challenge statutory provisions in public interest. The court, however, found that the petitioner did not have a direct interest in the matter and suspected the motives behind filing the petition, suggesting it might be intended to delay the Tribunal's proceedings rather than serve public interest. Conclusion: The court directed the Government to ensure that the proposed amendment to the SEBI Act, allowing a sitting or retired Judge of the High Court to be appointed as the Presiding Officer, is moved within the current Parliamentary session. The court dismissed the petition, emphasizing that the reliefs sought aimed at bringing the Tribunal's functioning to a standstill were not in public interest. The court also highlighted that the petitioner lacked the locus standi to maintain the petition and cautioned against entertaining public interest litigations filed by individuals without a genuine stake in the matter.
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