2019 (11) TMI 1553 - AT - SEBI

Condonation of delay - Appeal against order of delisting - delay of 316 days in filing the present appeal - HELD THAT - Against an order of delisting, an appeal is required to be filed within 15 days under section 21A of the Securities and Exchange Board of India Act, 1992 or within 45 days under section 23L. We find from the record that the trading of the shares of the Company was suspended in August, 2016 and, therefore, it is apparently clear that that the appellant was not interested in the delisting order as it did not prefer to file an appeal within 15 days under section 21A or within 45 days under section 23L. For the appellants it was not a case of urgency. Contention that the impugned order was never served upon the appellant is misconceived. According to the appellant they came to know of the order on 2nd June, 2018 and received the requisite documents which they applied on 4th July, 2018. The appeal could have been filed immediately thereafter but they did not do so and only filed after an inordinate delay of 316 days. In the additional affidavit no proof has been filed to show that the officer who was in charge had gone on leave or that the Company was in correspondence with the stock exchange throughout. In the absence of any documentary proof, the ground urged in the additional affidavit is devoid of any merit and is an afterthought. On a perusal of the affidavit we do not find any sufficient cause or plausible cause show by the appellant. The ground given by the appellant is patently vague and does not imply the presence of any legal and/or adequate reasons. No doubt the Tribunal is possessed with exercise of judicial discretion in condoning the delay after sufficient cause and/or adequate reason is given. In the instant case, we find that no bona fide reasons had been given for condoning the inordinate delay.

Summary

Issues:
1. Delay in filing the appeal against delisting under Regulation 22(2) of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009.
2. Justification for condoning the delay in filing the appeal.
3. Legal principles governing the condonation of delay.

Analysis:

Issue 1:
The appeal was filed against the delisting order dated 11th May, 2018, with a delay of 316 days. The appellant sought condonation of the delay citing reasons such as delayed receipt of documents, difficulty in finding a specialized Advocate in Mumbai, and correspondence with stock exchanges. However, it was noted that the trading of the shares was suspended in August 2016, indicating a lack of urgency on the part of the appellant to challenge the delisting order promptly.

Issue 2:
The appellant contended that the impugned order was not served promptly, causing a delay in filing the appeal. The tribunal found this contention to be misconceived as the appellant had received the necessary documents in July 2018 but failed to file the appeal promptly. The additional affidavit submitted lacked documentary proof to support claims of correspondence with stock exchanges or the absence of the officer in charge, leading the tribunal to conclude that the grounds presented were devoid of merit and appeared to be an afterthought.

Issue 3:
In considering the application for condonation of delay, the tribunal referred to legal precedents such as Balwant Singh (Dead) v. Jagdish Singh and Ram Nath Sao v. Gobardhan Sao to define the term 'sufficient cause.' It was emphasized that 'sufficient cause' should involve legal and adequate reasons, and a liberal construction should be applied to advance substantial justice. Despite possessing judicial discretion in condoning delays, the tribunal found the appellant's reasons to be vague and lacking in legal or adequate justification. Consequently, the application for condonation of delay was rejected, leading to the dismissal of the appeal.

In conclusion, the tribunal's decision to reject the application for condonation of delay was based on the lack of sufficient cause presented by the appellant, highlighting the importance of providing valid legal reasons to justify delays in legal proceedings.