2009 (9) TMI 1041 - AT - SEBI

Summary

Issues involved: Challenge to acquisition under Regulation 23(3) of the takeover code, Inaction of the Board regarding Regulation 12 violation, Maintainability of appeal u/s 15T of SEBI Act.

Challenge to acquisition under Regulation 23(3) of the takeover code:
The appellant challenged the acquisition by the second respondent, alleging a violation of Regulation 23(3) of the takeover code. The Tribunal dismissed the appeal, stating that the appellant had suppressed material facts from the Supreme Court by not disclosing that his earlier appeal on the same ground had already been dismissed. The appellant failed to raise the plea of violation of Regulation 12 in the earlier appeal, which led to the dismissal of the present appeal on the grounds of constructive res judicata and Order 2 Rule 2 of the Code of Civil Procedure. The High Court's observations limited the appellant's scope of challenge, further weakening his case.

Inaction of the Board regarding Regulation 12 violation:
The appellant sought to challenge the inaction of the Securities and Exchange Board of India (SEBI) in adjudicating on the alleged violation of Regulation 12 of the Takeover Code. However, the Tribunal noted that an appeal lies u/s 15T of the SEBI Act only against an order of the Board, not against its inaction. The appellant's grievance was based on the Board's failure to act on his complaints, rather than any adverse order passed by the Board. The Tribunal emphasized that challenging inaction is not permissible under the current legal framework, citing a previous case to support this position.

Maintainability of appeal u/s 15T of SEBI Act:
The Tribunal clarified that for an appeal to be maintainable u/s 15T of the SEBI Act, there must be an order passed by the Board that is being challenged. In this case, the appellant was contesting the Board's inaction rather than any specific order issued by the Board. The Tribunal rejected the argument that certain paragraphs of the Board's affidavit in the High Court should be treated as an order for the purpose of the appeal. The lack of a formal order or direction from the Board rendered the appeal non-maintainable under the provisions of the SEBI Act.

Conclusion:
The appeal challenging the acquisition under Regulation 23(3) was dismissed due to the appellant's failure to disclose relevant information and the limited scope of challenge set by the High Court. Additionally, the appeal based on the Board's inaction regarding Regulation 12 violation was deemed non-maintainable under the SEBI Act. The appellant was directed to bear the costs of the respondents and the application to raise additional grounds in the appeal was also dismissed.