2009 (12) TMI 1068 - HC - SEBI

Summary

Issues:
- Maintainability of the writ petition challenging SEBI clearance for an IPO
- Ownership of 'Dainik Bhaskar' and its relevance to SEBI clearance
- Allegations of incorrect or misleading information provided to SEBI
- Jurisdiction of the High Court in entertaining the petition
- Applicability of SEBI Act for addressing grievances against SEBI decisions

Analysis:
The writ petition filed as a Public Interest Litigation sought various reliefs against SEBI and a company (respondent no. 6) regarding the issuance of securities and the ownership of 'Dainik Bhaskar.' A preliminary objection was raised on the maintainability of the petition by respondent no. 7, arguing that the petitioners lacked standing as aggrieved parties and that SEBI had already cleared the public issue after scrutiny by regulatory bodies. The petitioners contended that SEBI's clearance was conditional and not fully complied with by the company, preventing the IPO from opening. Additionally, doubts were raised regarding the ownership of 'Dainik Bhaskar' by respondent no. 6, questioning the accuracy of information provided to SEBI.

The respondent defended SEBI's clearance process, emphasizing that all necessary information was disclosed, and risk factors were addressed as per SEBI's directives. The respondent argued that the petitioners should have approached SEBI directly if they believed any information was misrepresented, rather than seeking a writ from the High Court. The Court acknowledged both parties' arguments but sided with the respondent, stating that the petitioners should address their grievances with SEBI through appropriate channels, such as filing an appeal under the Securities & Exchange Board of India Act, 1992.

The Court concluded that the writ petition challenging SEBI's clearance could not be entertained directly and advised the petitioners to approach SEBI with their concerns. Given the imminent opening of the IPO, the Court declined to entertain the petition but granted the petitioners the liberty to pursue their grievances with SEBI or file an appeal under the Act. The Court highlighted that SEBI should consider the issues raised if approached by the petitioners, indicating that the appropriate forum for addressing SEBI-related matters is through the regulatory authority rather than the High Court.

In summary, the High Court dismissed the writ petition, directing the petitioners to address their concerns regarding SEBI's clearance and the IPO process directly with SEBI or through the appeal process under the Securities & Exchange Board of India Act, 1992. The judgment emphasized the importance of utilizing the statutory remedies available under the Act for challenging regulatory decisions, rather than seeking immediate relief through writ jurisdiction in the High Court.