2013 (7) TMI 309 - Tri - Companies Law

Decision of NSE in granting listing and trading approval of the equity shares pursuant to its rights issue - circular dated October 15, 2012 challenged - Held that - The appellants have failed to show how the listing permission granted by NSE by the impugned circular has affected their legal rights or caused legal wrong or injury to the appellants. The appellants grievance does not flow from the impugned circular of NSE. As it is not a case where the various representations addressed by the appellants to the SEBI or to the intermediaries with regard to said issue were not considered. It is a matter of record that said representations were examined and appropriate response given to the appellants. In case the appellants were not satisfied with the response/reply received by them to their representations, it may have been a cause of grievance and the appellants could have availed appropriate remedy against those responses. In the garb of challenging the circular dated October 15, 2012 of NSE granting listing permission of rights issue of respondent no. 4, the appellants are in effect challenging decision of some of the respondents on its various representations which were duly considered and response sent to the appellants. The appellants are now seeking multiple reliefs against various respondents which are in the nature of a direction not covered within the scope of Section 23L of the Act. Appeal dismissed.

Summary

Issues:
Maintainability of the appeal under Section 23L of the Securities Contracts (Regulation) Act, 1956.

Analysis:
1. The appellants, investors and shareholders of a company, challenged the decision of the National Stock Exchange of India Ltd. (NSE) granting listing and trading approval of equity shares issued by the company. They alleged corporate governance failures, inadequate disclosures, and non-compliance with regulations. The appellants made multiple representations to regulatory entities, but no action was taken. The appeal focused on the maintainability issue concerning the relief sought in relation to the NSE's decision.

2. The respondent's counsel argued against the maintainability of the appeal, stating that the grievance of the appellants was not directly related to the NSE's decision on listing approval. They contended that the relief sought went beyond the jurisdiction of the Tribunal, as it included restrictions on business activities not linked to the impugned order. The appellants did not request the cancellation of the rights issue, raising questions about their status as 'person aggrieved' under Section 23L of the Act.

3. The appellants argued that the appeal fell within the ambit of Section 23L as the issuer allegedly violated securities laws, and their concerns were not independently examined. They claimed that the appeal was maintainable and requested the Tribunal to hear the case on its merits. The Tribunal examined the provisions of Section 23L and the appellants' contentions to determine the maintainability of the appeal.

4. The Tribunal referred to the Supreme Court's test to determine if a person is 'aggrieved,' emphasizing the need for a legal right to be infringed or a legal wrong suffered directly. It noted that the appellants did not challenge the permission granted by NSE for listing the rights issue, which they benefited from. The Tribunal highlighted that the appellants' grievances did not stem from the NSE's circular and that their representations were duly considered by regulatory bodies, indicating a lack of legal injury caused by the listing approval.

5. Considering the arguments and precedents, the Tribunal concluded that the appeal was not maintainable under Section 23L of the Act. As the appellants' grievances did not arise from the NSE's decision on listing approval, seeking multiple reliefs against various respondents exceeded the scope of the Act. Therefore, the Tribunal dismissed the appeal on grounds of maintainability without delving into the case's merits. No costs were awarded in the judgment.